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|Retained vs. Contingency - A Primer|
When companies seek to hire high-performing talent, they have three basic options:
Using the first option, the hiring manager or an internal recruiter makes an effort to source potential applicants, typically by advertising the position, and then screens responses over the phone, interviews candidates, and selects a finalist for an offer. The advantage here is that the company maintains full control of the process, and appears to minimize recruitment costs. However, there are important disadvantages: (1) the most highly qualified candidates (“A-players”) are typically employed elsewhere and not job hunting, and are less likely to see or respond to an advertisement; (2) a great many highly unqualified applicants must be screened by the internal recruiter before he can present a subset to the hiring manager who must begin the lengthy process of actual qualifying through live interviews; and (3) internal recruiters often risk their political capital with the hiring manager/team when unexpected flaws emerge during interviews, because the overworked internal recruiters neither had the time nor experience level to properly vet candidates, particularly senior leaders.
Therefore, for resource and quality reasons, many organizations prefer to utilize the services of external recruiters. But, how do they decide whether to use multiple, competing contingency recruiters, or a single retained search consultant?