Why are more Recruiting Companies starting to ask for money up-front?

There will always be a place for contingency recruiting – the quick fix to your just-in-time staffing needs. A race to fill the job quickly pitting firms against one another and hoping to get the best talent fastest. The model has been around for ages, even before Corporate, in-house Recruiting was a career option. You pay a % of the new hire’s salary and receive a 30-90 day guarantee that they’ll stay before you pay a large fee. On a 100K hire, at an average fee of 20%, you’re looking at a 20K investment if you find the right person.  

When I started my firm and shared with my potential clients that I required a retainer to begin a search, I heard all of the objections you’d expect. Walking through the WHY often slowed them down to consider whether contingency was the best route for this important investment. I should also point out that the Recruiting Experiences’ model of flat-fee, partnership recruiting is incredibly unique in the marketplace (more similar to an RPO) and actually costs less than many retained or contingent models, so I was also selling against a ‘too good to be true’ myth also. Traditional retained models are generally the same cost as contingency models – the results and benefits, however, are vastly different.  

Before we jump into those benefits, let’s take a quick peek at the numbers. Did you know that the staffing industry generates billions of dollars in revenue annually? According to the American Staffing Association, the staffing industry contributed a whopping $122.6 billion to the U.S. economy in 2020 alone. 💰 Clients are spending Billions, with a B, on finding the right talent to drive their visions forward. It’s a critical decision to find the best model and the right firm to support such an important part of your business strategy. 

Benefits of Retained Recruiting: 

🎯 Dedicated Time & Focus: 

Retained recruiting is like signing up for an elite personal trainer—it’s an investment in quality. By engaging in a partnership with a retained recruiting firm, you’re essentially saying, “We’re committed to finding the absolute best talent for our team, no compromises.” This dedication often leads to game-changing hires that elevate your business. Retained Recruiters generally carry 6-12 active requisitions for their clients at a time meaning you have more dedicated time spent on your search. Comparatively, contingent recruiters carry 20-40 requisitions at a time. Contingent recruiters follow the money – they will fill the fastest, highest-earning roles first. Difficult searches or those with discounting often get left behind.  

🎯 Recruiter On-Call 

Ever felt like your recruitment process is spread thin across multiple agencies? With retained recruiting, you’re the star client, and the recruiting team is all yours. They dive deep into understanding your company culture, industry nuances, and the precise skills required for each role. Your success becomes their primary goal – you’ve paid up-front for a portion of their time to be dedicated to you. They are contracted to stick with you until the role is successfully filled. 

🎯 Outbound vs Inbound 

Not 100% of the time but generally… because there is a partnership approach to finding specific talent to fill your need, your retained recruiter will focus on an outbound search to go and find the passive talent you want on your team. Contingent recruiters will start with the low-hanging fruit – active candidates or those in their database of past candidates. There are great candidates inbound too. However, if you are filling a niche need requiring the help of an external recruiter, you want to have a combination of inbound and outbound efforts even if it lengthens the search timeline.  

🎯 Consultative Partnership: 

Retained recruiters aren’t just matchmakers; they are strategic advisors. They work closely with you to design tailor-made solutions, offering insights into market trends, compensation benchmarks, and candidate expectations. This collaborative approach ensures your hiring strategy is aligned with your long-term business goals. Additionally, because accepting an upfront payment is a contract to fulfill the need, retained recruiters will tell you when a role is “unfillable” and share how to tweak requirements to find the best talent available in the marketplace to meet the needs of your business.  

🎯 Time Efficiency: 

Time is money. Retained recruiters respect that. With contingency recruiting, you might spend countless hours sifting through resumes and conducting multiple rounds of interviews. Retained recruiting streamlines the process, presenting you with a curated pool of top contenders, saving you both time and energy. I don’t work for free, and you don’t either. With a retained search, both sides have a vested interest in filling the role efficiently.   

If you have been using contingency recruiting exclusively, are you ready to embrace a recruitment approach that doesn’t just fill roles but offers you a partnership approach to securing top talent? It’s a myth that Retained Recruiting costs more – usually, it’s the same. In my firm, it’s generally less.  

If you visit the homepage of the Recruiting Experiences website, you’ll see our tagline – the world doesn’t need another recruiting firm. It’s true – there are plenty – some good and some not so good. We exist to create great experiences and we offer unique pricing models that reflect the dedicated work we do on behalf of our clients. Whether you consider our services or not, I encourage you to consider options outside of traditional contingency especially when you are seeking talent unique to your organization’s needs. The benefits of having dedicated time, focus, outbound search capabilities, efficiency, and a consultative partnership are well worth your initial investment in finding top talent.  

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