When you hear a recruiter say they are working on a retained search, what does that mean?
Have you ever received a phone call or read on LinkedIn that a recruiter is working on a “retained” job opportunity? Many people will already know, but some may not.
A retained search is where the company has paid a third of the total fee for finding a successful candidate to the recruiter up front to commence the search. In Japan, the typical fee for completing a search is 35% of the successful candidate’s first year take home compensation.
So let’s assume the successful candidate receives a salary of $200,000 USD, our total fee is $70,000, of which a third is paid to the recruiter to commence the search. The second part of this fee is paid upon presentation of the shortlist and the final third is paid once the successful person accepts the offer and joins the company.
“In a retained search only one recruiter is engaged, no others“
Why is this important? It is important for several reasons. In this case the recruiter is handling all applications, often including internal applicants. There may be situations where the headhunter has been retained to replace an existing incumbent and therefore secrecy is a top priority. Whatever the reason for hiring, a thorough search will be conducted using a wide variety of channels in order to introduce a at least 5 highly qualified people to the client.
The recruiter entrusted to source and screen for such important candidates therefore clearly holds a lot of trust with the hiring company, usually has known the hiring manager for many years and typically has a track record of finding suitable people.
Therefore this is likely to be a recruiter worth staying close to. If she or he has such strong relationships with with one company, you can guarantee that this person also does with other companies.
Contingent Searches
You may be more familiar with contingent searches. These are searches where the fee is paid upon successfully filling the role with a great person. In this case, speed is essential and the headhunter will need to speak with her network asap and send CVs to the client within 24-48 hours ideally. Then conduct a wider search over the next few days.
Why Is This Important?
When briefed on a role ask your recruiter how many other agents are working on the role. This will give you an idea about the company’s approach to hiring. If they have gone with a lot of agencies, you may not receive any feedback due to the large volume of applicants they have received. Also, the more agents working on a role, the quicker they will all lose interest and move on to another position. Whereas, if a Company chooses one agent to source candidates on a “retained” basis, that agent is going nowhere until it is filled! Therefore you will get a very detailed explanation of the company, management team and position as it stands as well as the future plan. You can then prepare thoroughly before the interview and have a significantly higher chance of getting the role. Even if you do not, the feedback you receive will be thorough and helpful for the rest of your search!
