How Employers Can Select the Right Recruiter

When an organization has a key position that it needs to fill, either because of additional needs or to replace someone who has left, they often enlist the services of an outside recruiter.  The reason that this is so common is that finding great talent takes a lot of time and can be incredibly tedious, and most hiring managers understand that it is more cost effective to hire someone who can do most of the legwork for them than it is to stop doing their own jobs that produce revenue and take on the task themselves.

However, even when they do decide to use a recruiter, they still have choose the right one that can best fill their needs, and there are a few considerations that are very important in making that choice.  You can waste a lot of time and money if you make the wrong choice, so it pays to understand the basic criteria that you should consider.

First, understand that outside recruiters fall into two basic categories, and those two categories are retained search and contingency search.  I have done both, and both have their place, but the type of job you need to fill really dictates which one you should choose.  Contingency recruiters are the most common type and comprise the great majority of most outside recruiters.  That is the business model that most recruiters use when they start in the industry and it is the model that is the best fit for most positions that companies need to fill. 

When you engage a contingency recruiter, there is no contract or signed agreement in place.  You and the recruiter have a simple agreement that if they find a candidate and present that candidate to you, they earn a placement fee if you hire that candidate.  Unless you hire someone that they bring to your attention, you owe them nothing.  Many hiring managers prefer this arrangement because they figure that they can engage several of them at the same time, thereby increasing the odds that they will quickly get several good candidates to choose from in filling the position.

What the employer often does not realize is that the recruiter sees the arrangement from an entirely different perspective.  They know that if you are contacting them, you are probably contacting other contingency recruiters as well.  That means that everyone is hunting the same candidates, and that they have a lot of competition in filling the position.  Contingency recruiters have to consider whether it is worth their time, effort, and money to launch an effective search when they know that someone else could very easily find the right candidate before they do, which would make all their efforts go for naught.  Contingency recruiters typically pick the “low hanging fruit.”  Because all the other recruiters understand these conditions as well, if they do not find success early in the process, they quickly lose interest and move on to another engagement that shows more potential for success.  The employer is probably thinking that he/she has raised the odds on finding great candidates by engaging several recruiters, but the truth is that probably very few of them are actually drilling very deeply into the potential talent pool, and are unlikely to do so if it will cost them considerable time and/or money.  The reason?  They are not going to risk a large outlay of time, effort, or money if there is no reasonable expectation of a payoff.

When should you use a contingency recruiter?  Use them when the position is one that should have a relatively large pool of potential talent that is readily available for those who know how to access it. This usually applies to positions that are on the lower end of the pay scale.  That is why there are far more contingency recruiters than retained recruiters.  There are a lot more positions at the lower end of the pay scale than at the top end.  Generally, and there are exceptions to every case, open positions that will pay less than a six-figure income are the best fit for contingency recruiters.

When you need to fill a position where the standards are higher (even in positions that are less than six figures), when the specific required talents or experience are not common, or when you need a third party to act as a go-between to contact and persuade a talented executive to consider a new opportunity and often to negotiate the terms of the new deal, a retained search is usually in your best interests.  Retained search recruiters require an initial investment in the process from the employer.  The size of the retainer can vary considerably from one recruiter to another, but the recruiter knows that to find someone for a position for which the pool of talent is small and specialized will require extensive time, effort, and sometimes a large outlay of money, and if they are going to be investing serious time and money, they want the client to be invested as well.  The retainer paid to the recruiter at the beginning of the search is credited to the employer when the search is completed.  The net fee is the total fee less the retainer.

What are the advantages of a retained search?  You have a recruiter who is willing to invest the time, effort, and money that will be required to find not just qualified candidates, but the best candidates.  These candidates are rarely listed on job boards that most contingency recruiters use.  Most of them are happy where they are, not actively looking for another job, and are well-compensated.  One focused and dedicated recruiter who is retained knows where to look will not hesitate to take whatever steps are necessary to find the right person.  The retained recruiter wants to earn the balance of the fee and will stay on the search until it is successfully completed. That same position in the hands of a contingency recruiter may be treated entirely differently.  That recruiter may know where to look, but more often than not is not willing to make the necessary investment without some assurances that he or she will not be wasting time and money.  You will most often get better candidates with a retained search than with a contingency search.

Whether you decide to use a contingency recruiter or a retained recruiter, choose one who has experience in your industry or in finding the type of position you need to fill.  There are exceptions to every rule, but in my experience the best recruiters are those who have worked in the fields where they recruit.  They know the people, the language of the industry, and perhaps most importantly, they “know people who know people,” which can be a priceless advantage in the search process.

Ken Murdock is the owner of Murdock and Associates Recruiters and New Wave Resumes. He recruits top talent in sales, project management, accounting/finance, manufacturing operations, and engineering for the manufacturing sector, oil & gas, construction, and the packaging industry. New Wave Résumés offers professional résumés and interview coaching for executives, mid-level professionals, recent graduates, and anyone seeking to take their skills and talents to a higher level.