When organizations consider engaging an external firm to assist with finding and placing new executive talent, they must decide between retained executive search and contingency recruiting. There are distinct advantages in utilizing a retained executive search firm.
A retained executive search firm is engaged in all aspects of the search process, starting with defining a tailor-made search strategy all the way through to candidate onboarding. Retained executive search firms often continue consultation and follow-up months after the hire, since their success is based on the impact and long-term commitment of the executive hired.
These firms conduct the search exclusively – no other recruitment agencies will take part – so that it will be very client-focused with intense investment of resources to find the right candidate. Retained search firms work very closely with each client, and will take their time and use an agreed-upon methodology to find the best person for the job. The process is rigorous with a shortlist from 4 to 6 quality prospects developed after an exhaustive national sourcing process, beginning with upwards of 300 initial targets.
While retained search may be perceived as expensive, it provides a better ROI in the long run. On average, a retained placement ends up being a better fit in their position and ultimately stays in the role longer than with any other type of recruiting scenario. Companies will most often request a retained search when they are looking to fill an executive level position, and sometimes when all other less expensive – and ineffective – search options have been exhausted.
It is also important to note that 75% of professionals are called passive candidates – those that may be open to switching jobs, but are not actively looking. Only about 25% of the total workforce is actively looking for a new career opportunity. Most forms of recruiting are searching that smaller pool of candidates, while retained search firms aggressively seek out the ideal candidate for the role that must be filled, and utilize their skills, abilities, and methodologies to identify candidates in the much larger 75% passive pool who may not be looking but are open.
A report conducted by the AESC, a professional association representing retained executive search consulting firms worldwide, shows that the executive search profession is in high demand and increasing every year. This 2014 State of the Retained Executive Search Industry report states, “in recent years, in spite of adverse economic forces following the world financial crisis, demand for high level executive search has remained resilient, and demand is roughly back to the all-time peak of 2008. While statistics on the industry are hard to assemble because of its very fragmented nature, estimates suggest that, at its peak, the search profession worldwide generated around $11 billion in revenues. As of December 2013, revenues are estimated at around $10.57 billion.”