Retained recruitment: more effective… and cheaper!

The commonly accepted employer view that “agency” or “contingency” recruitment is less costly is flawed. In fact, retained recruitment can be cheaper and more effective.

Not all recruitment requires the best available candidate in the market: indeed that would be unrealistic for junior to mid level roles.

However more senior roles which may have significant strategic impact both in terms of revenue growth and the organisation undoubtedly should be approached differently. In particular this will almost certainly require a structured process to ensure that the broadest range of applicant sources have been considered to enable the optimum selection of candidates. It will also need a well managed process to ensure that the candidates are both evaluated effectively and, equally importantly, impressed and excited by the opportunity and the employer.

The alternative, almost by definition, might be a sub optimal hire or wasted time: the effect of either or both of these could be costly.

It is tempting to think that using a few recruiters on a contingency basis to find candidates is an ideal solution: several agencies means a broad spread of candidates and they will try harder because they know they are in competition.

Alas this is to misunderstand the commercial realities for the agent: they expend most of their time on roles with the greatest likelihood of a fee or where a fee has been paid. Multi agency “success only” roles, especially if the employer has been cunning enough to get a reduced fee, are always bottom of the recruiters’ priority list.

So the result is a modest amount of effort sourcing the easiest to find candidates with a limited amount of value added to the screening or process.

That’s the reason why more senior roles often use a retained recruiter.

Why is retained recruitment more effective?

Priority and speed

The recruiter will give your role top priority, much more of their time and their resourcers’ and an accelerated process if required by your timescales

More screening

Usually part of the agreement is in-depth interviewing (telephone or “face to face”). This means that you only see CVs and meet candidates the recruiter believes to be suitable. This differs from contingency hiring where they may believe they have no choice but to shortlist marginal candidates. Because if they don’t, another recruiter might, and they might get the fee.

More responsive and better service

You’ve paid a fee which means that you have the recruiter’s attention.

More candidate mining and sourcing

Better candidates and better choice. The recruiter will know that you definitely want to hire otherwise you wouldn’t have retained them. They’ll also know that if they put time into finding good candidates they will definitely get the rest of their fee. The result is they devote time to unearthing “difficult to find” and less active candidates. In practice this will involve a wide variety of sources that simply wouldn’t be worth considering via the contingency route.


There will be a much much greater likelihood of a successful conclusion from a retained recruiter.  A good recruiter, operating in their core markets,  will have a success rate well above 90%

Market knowledge and integrity

You are working with a trusted partner (if you don’t trust them don’t use them) who will be deserving of the term “consultant”. They can guide you through the entire process from job specification to offer with objective and informed advice. They are as keen as you are to find a great candidate who does well in the job.

Why may retained recruitment be cheaper?

1. Lower fee

If a recruiter has a near guarantee of a fee they can afford to reduce that fee depending upon the services expected. Traditionally this hasn’t been the case but many recruiters are re-evaluating their cost model to be more attractive.

2. Quicker placement

While retained recruitment isn’t necessarily faster, especially if  a lot of searching and approaching inactive candidates is involved, the recruiter’s focus can often accelerate timescales.  In management consultancy this means someone joining a firm sooner and therefore earning fees quicker.

3. Less client time expended unproductively

Because they are paying for proper screening key people in the business can be earning fees. Instead of reviewing unsuitable CVs and interviewing unsuitable candidates.

4. Better rebate or guarantee period

While everyone hopes for success there is inevitably the a concern that a hire might leave and a recruitment fee has gone down the drain. Because they have banked at least some fee for their efforts a retained agent can often be persuaded to offer better rebate terms and reduce the risk of your paying for a candidate that doesn’t work out.

In summary

Conventional wisdom is that “agency” or “contingency” recruitment is always a lower fee than retained recruitment. The many advantages of retained recruitment suggest that this is not inevitably true.

From a recruiter’s perspective, “contingency” is a lottery and they will fill a small minority of the roles they fill. The success rate is generally around 20%.  A good recruiter will fill nearly 100% of retained roles (unless they are cancelled).

It means that they can afford to spend at least 5 times more time on retained roles, often more. And as suggested above if they have retained work then contingency roles are bottom of the priority list.

Contingency can be a false economy. Employers may be lured by the prospect of only paying a fee if they hire, but the risk is poorer service, weaker candidates and greater cost.

If you would like to discuss how Prism Executive Recruitment can help with your talent acquisition strategy please contact Chris Sale, Managing Director, on 01344 636426 email  [email protected] or use our Contact Us form.

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