There are several reasons why a hiring manager may choose to work with a search firm when looking to fill a position within their company. One of the main reasons is that search firms have access to a wide network of qualified candidates that may not be reachable through traditional job postings or recruitment methods. In addition, search firms specialize in finding and screening candidates for specific roles, saving the hiring manager time and resources in the recruitment process. Search firms can also provide a high level of expertise and experience in the recruitment process as they often have industry knowledge and contacts that can help them identify and attract top talent for a particular position.
Did You Know There are Different Types of Search Firms?
Working with a search firm can be a valuable investment if you’re a hiring manager. While there may not be many “differences” since they’re all technically considered “Headhunters,” it’s still important to define them so you know exactly what to expect.
Retained Search Firms
A retained search firm helps companies fill executive-level positions with top-tier talent. Unlike contingency firms, which only get paid if they successfully place a candidate, retained search firms are paid upfront to conduct a thorough search for candidates and present the best options to the hiring manager. These firms have extensive experience and a vast network of connections, so they are well-equipped to find top talent for executive-level positions.
One of the key differences between working with a retained search firm rather than a contingency search firm is that retained search firms offer a one-year guarantee while contingency search firms offer 90 days.
Hiring managers who work with a retained search firm need to understand a few key things:
- Be prepared to invest both time and resources into the search process.
- Be prepared to pay a higher upfront fee, which means being fully committed to finding the right candidate for the job.
- Be prepared to work closely with the retained search firm to define the criteria for the position and provide any necessary information about the company culture and expectations for the role.
- Be open to considering candidates recommended by the search firm, even if they may be “outside the box.”
Overall, working with a retained search firm can be a highly effective way for hiring managers to find qualified candidates for executive positions. By understanding the role of a retained search firm and being willing to invest time and resources into the search process, hiring managers can increase their chances of finding the perfect candidate for their organization.
Contingency Search Firms
A contingency search firm is a recruiting agency that works on a “no win, no fee” basis. This means they only get paid if they successfully place a candidate in a job. However, unlike having a year-long guarantee with a retained search firm, contingency recruitment firms typically only offer a 90-day guarantee, so sometimes it may feel like the position was filled too quickly, leading to a low-quality match. This contrasts with retained search firms, which are paid when commencing a search and may take longer to find the right fit but with a reduced risk of hiring incorrectly. Contingency search firms also typically work on a volume basis, meaning they may have multiple clients and candidates they are working with at any given time and potentially the exact search, which could cause conflicts of interest while they parallel process candidates with multiple clients.
Hiring managers who work with a contingency search firm need to understand a few key things:
- Be prepared to respond and make decisions promptly to secure the best candidates.
- Be diligent in the screening process to ensure that the candidates they are presented with are truly the best fit for the role.
- Be aware that contingency search firms may not have the same level of commitment and investment in the search process as retained search firms (while they are still motivated to make a placement, their focus may be more on quantity rather than quality).
- Remember, they only get paid if you hire one of their candidates, so think about the behavior that drives when communicating with a contingency recruiter.
Overall, when working with a contingency search firm, hiring managers must communicate their expectations clearly and be actively involved in the search process to ensure the best possible outcome.
Headhunters
Those who advertise as “headhunters” are also professional recruiters and specialize in searching and identifying candidates with the skills and experience that match the job requirements of their clients. Headhunters typically work on commission, receiving a fee from the hiring company for successfully placing a candidate, so they work very similarly to contingency firms. They also offer a 90-day guarantee compared to a year-long guarantee like retained search firms. Headhunters often have access to exclusive job openings and can help their clients navigate the job search process more efficiently. They can provide valuable insight into the hiring process and offer personalized guidance on resumes, interviews, and negotiating salary offers.
Hiring managers who work with a headhunter need to understand a few key things:
- Be prepared to provide headhunters with a detailed job description outlining the skills, experience, and qualifications required for the position so they can find the most suitable candidates.
- Be prepared to communicate their expectations regarding the recruitment process, including timelines, salary range, and any other relevant information.
- Be prepared to communicate openly and frequently with headhunters, providing feedback and guidance as needed.
- Be aware of the fee structure of the headhunter they are working with, including commission rates and payment terms, before proceeding with the recruitment process.
Overall, headhunters are valuable in helping hiring managers find top talent for their clients. However, working with a headhunter is a partnership that requires clear communication and mutual respect. Hiring managers should provide detailed job descriptions, specific requirements, and timely feedback to help headhunters identify the most suitable candidates. Additionally, hiring managers should be open to feedback and suggestions from the headhunter on how to attract top talent and make the hiring process more efficient.
Before Hiring a Search Firm, Identify Your Specific Hiring Goals & Requirements
When deciding between hiring a retained search firm, contingency search firm, or headhunter, you may notice many similarities. Many firms refer to themselves as “headhunters,” so the primary key difference is the guarantee and how the fee is charged. Retained search firms typically work on exclusive contracts. They are best suited for executive and mid-level positions where confidentiality and specialized industry knowledge are crucial. They will ensure they fill your position with the right candidate, even if it takes longer. Contingency search firms, on the other hand, operate on a “no win, no fee” basis and are often used for mid-level to lower-level positions that require a quicker turnaround, which is why they typically offer a 90-day guarantee for filling the position. Headhunters and independent recruiters can be cost-effective for filling entry-level or specialized technical roles. Ultimately, the decision should be based on the complexity of the role, the timeline for filling the position, and the budget available for recruitment services.
Partner with Sheer Velocity, the retained search firm that excels in finding top-tier talent. With personalized strategies, deep industry expertise, and a commitment to excellence, we’ll connect you with the perfect candidate to drive success.