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Contingency vs Retained Recruitment - What is the Difference?

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Most recruitment agencies work in two ways – contingency and retained.

If you are looking to hire new talent, working with a recruitment agency may be the best option to find the right candidate for the job.

Most recruitment agencies work in two ways – contingency and retained. You may ask, what is the difference between the two?

Let’s take a look at what contingency and retained recruitment is and the benefits and challenges of both. 

What is Contingency Recruitment?

Contingency recruitment refers to a type of recruitment in which the agency only collects a fee once a candidate that they have qualified is successfully placed in the role.

Benefits of Contingency Recruitment

  • Full Control - The client has full control of the recruitment process, deciding on whether the candidate referred by the agency is qualified enough for the role.
  • No Risk - No fee is paid unless a candidate is placed at the company.
  • No Upfront Cost - There’s no pressure to hire a candidate on the basis that money has been spent.

Challenges of Contingency Recruitment

  • Less Resources - Agencies conduct a less thorough search as resources are shared evenly across all jobs.
  • Anonymity  - An anonymous job specification is not detailed enough to best promote the company to the candidate.
  • No Exclusivity - The best candidates will also be offered to other clients with similar job roles.

What is Retained Recruitment?

Retained recruitment refers to a type of recruitment in which the agency collects a partial fee from clients before the recruitment process begins. The remainder of the fee is paid between the recruitment search and the successful placement of the candidate. The agency will work on an exclusive basis meaning the job will only be filled through this recruitment company.

Benefits of Retained Recruitment

  • Premium Job Listings - The job role is of high priority so great agencies will spend more on premium job listings.
  • Prioritised Job Searches - Agencies will use their resources to prioritise job searches for your role.
  • Detailed/Specific Job Specifications - Working exclusively gives the agency more freedom to be specific and add further details about the company and its culture with candidates.
  • 100% Commitment  - As a fee is guaranteed, the agency has more incentive to fill the position.
  • Build Long-Term Relationships - As you will be working closely with the agency, you will build a strong relationship and eventually work together on a number of projects.
  • Cash Flow Management - The client can better prepare for the future as it is easier to keep track of how much and when money is coming out of the business.

Challenges of Retained Recruitment

  •  Upfront Retainer - The client will have to pay a sum of money before any work from the recruitment agency has taken place.
  • Risk - You can end up losing money if you are not happy with the shortlist of candidates the recruitment agency has chosen. This is why it is important to work with a great recruitment agency with a great reputation. Check out the testimonials page on their website and see what others have said about them.
  • Higher Fees - Most agencies charge more if you decide to work under a retained agreement in comparison to a contingency. Find a recruitment agency that offers great rates for both contingency and retained agreements.
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