Q. I am the vice president of human resources for a 150-person, $50 million wholesale distribution company. Our CFO has voluntarily terminated his employment, and we need to backfill his position. What is the value of using a retained search firm versus a contingency search firm versus filling the position through our own efforts?

A. The main differences are how they search for candidates, the process and how they get paid. The most important thing to realize is that recruiting is sales. Recruiters are professional networkers and are able to locate people who might not otherwise be looking for a new opportunity.

To be truly effective requires selling the position, the company and a compelling reason why someone should consider your opportunity versus their current job or other positions. This requires a strong understanding of the problem (the position) and the ability to locate a solution (qualified candidates). You only get one chance to hit a home run!

Retained search firms are consulting-oriented, and their recruiters are business professionals. Retained search firms take the time to get to know your team and to understand the company’s history, milestones and challenges. They are knowledgeable about your products and services, your culture and plans for the future. They focus on finding candidates with the education, skills and experience you’re searching for. They consider themselves an extension of the client.

Retained consultants tend to consider candidates identified through their own network or referred to them by a trusted source. They are best suited for senior-level positions where there are fewer qualified candidates, and the challenge often times is recruiting the talent from the competition.

Retained search firms may undertake significant screening, assessments and background checks, usually narrowing down the search to three to five candidates. Fees range from 25 percent to 35 percent of the total compensation package and are typically paid in increments. Some firms work on an hourly rate. Guarantees range from three to six months or longer.

Most companies who decide to use a retained search firm are facing the following challenges:

A senior-level role is open, and the organization must be represented in a professional, courteous and discreet manner.

A confidential replacement search must be conducted in a timely and discreet manner.

A targeted search is needed with a comprehensive investigation of the talent pool from your competition.

A talent search is required to supplement succession planning and growth strategies.

A new position requires extensive research and market penetration to provide the selection committee with adequate information to define a profile and promote a role.

A high-level executive will most likely explore an opportunity if a company is represented by a firm with an exclusive retained search arrangement. An executive should feel confident that any dialogue with a retained search firm will be discreet, confidential and efficient.

Contingency firms maintain relationships with various companies and candidates and have the freedom to cross-present to multiple companies. If you’re seeking a broad pool of talent, and there is no sense of urgency, contingency can be the way to go.

Most companies that approach filling a position through their own efforts will turn this over to their internal recruiter or human resources department.

If recruiting is sales, is the internal team qualified at pitching a home-run opportunity? Because of rising unemployment, the average job ad will result in 500 or more applicants. Are you prepared to review and pre-qualify all of these applicants?

Whomever you decide to work with, one rule remains the same: You need a professional who is qualified to get the job done.


Jennifer Laxton is a senior partner with Executive Search Associates in Santa Rosa, www.esa.com. ESA is an executive search and consulting company. You can reach her at 707-525-1010 ext. 101 or jklaxton@esa.com. If you have questions with regards to your situation, send an e-mail to askjen@esa.com.