We’re answering another common question today about whether a contingent search model or a retained search model is better. Here are the pros and cons of each method.
Should you use a contingent search model or more of a retained search model? Many of our clients have this very question when they start a search, so we want to help answer it by taking a closer look at the pros and cons of each method.
As far as a contingent search is concerned, obviously there is no upfront investment required, which makes it easier to start the search. At the same time, it’s important to understand where the contingent model comes from. In a candidate-driven marketplace, a financial advisor with a $50 million portable book of business can go anywhere they want.
When a recruiter has a relationship with that kind of person, they want to open as many doors as possible. They may be easily presenting that person to 10 different companies. If there is someone right in your backyard who might be a good cultural fit, you want to be on that list of companies. In these types of searches, you want everybody to know what your company is about and what might be a good fit for you.
The big disadvantage of a contingent search is that everyone is only letting you know what they’re seeing in the marketplace on a surface level. You don’t have anyone doing a deep dive or circling your market, going into every competitor and company, and finding every possible person. You may be missing a lot of people, but at least you won’t be missing active prospects.
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We have a firm that is always looking for a new business development officer. They’re a multi-billion dollar investment management firm. It’s not a book of business, but a pure business-development role. It’s a very difficult role to fill. Typically, they work with 10 search firms for any particular office and they will have 50 interviews before they hire one person. We have filled that role a few times for them, but we would not want to be retained on that.
Speaking of the retained search model, this is a strategy where you’re making a commitment to a firm that’s going to make a commitment to you. Typically, they will contact 125 people at least seven to 10 times in a 22 to 45 business day period. They will put out several thousand messages to the ideal list to find out who is the right fit for you. You don’t typically receive this kind of commitment on a contingent basis. It’s like hiring a lawyer or an accountant. They’re as invested in your success as you are.
Right now, we’re working with a $1 billion-plus RIA who is looking for a CIO. Within 22 business days, we’ve combed the market, talked to over 100 people, interviewed 20, and presented them with four candidates that they are moving through the process.
If you have any questions about which model might be the right choice for your search, don’t hesitate to give me a call or send me an email today. I look forward to hearing from you soon.
