Recently we have had more conversations than usual with organizations who have are trying to decide if they should utilize a retained or contingent search firm to recruit senior-level diverse candidates. This is, of course, unsurprising in a pandemic driven hiring downturn, given the perception that contingency firms are less expensive and that there a lot of candidates looking for new roles. What we share during those conversations is that the deliverables are not the same.
The executive search industry broadly falls into two categories: contingent recruiters and retained executive search consultants. Their business models and approaches to recruitment are different and there are pros and cons to each model. Of course, as a retained search firm, we are not entirely objective but here are a few things to keep in mind, specifically as it relates to the recruitment of senior-level diverse candidates.
A contingency firm is typically focused on volume and speed – they are not given exclusivity, so recruiters are in competition with their teammates and other firms. For some roles – such as high-volume hires or at less senior levels – that is the best solution.
At contingency firms, recruiters are often required to interview 10 active job seekers per week, many of who they will never place. Weekly volume metrics are tracked but there is rarely a purposeful effort to ensure a diverse pool of candidates. Potential candidates are lightly vetted and interviewed but minimal time is spent with the client to discuss the position responsibilities and to fully understand their culture. Often, if there is not an offer from the first group of candidates sent to a client, a contingency firm will move its attention to another search opportunity.
There are benefits to this lighter-touch process – the fee for services is usually 15-25% of the candidate’s base salary – but the hire is typically only guaranteed for 90 days.
By contrast, as a retained executive search firm Bridge Partners follows a clear and proven methodology. First, we give each search the attention it deserves by partnering on no more than 5 searches at a time. At the outset of a search, we meet with all key stakeholders to understand culture and craft an inclusive job description. In parallel, our research team strategically identifies a diverse group of highly-targeted potential candidates, some of whom are in our database, some of whom are newly-identified for the specific search – most of whom are not active job seekers.
Our Partners proactively reach out to these potential candidates to tell an authentic story about how the role will impact an organization, as well as how it will help them achieve their own career goals and objectives.
Then we interview those who express an interest – at least twice. Throughout the search, detailed progress reports are provided and we guide the client interview process to the point of an offer being accepted. On the rare occasion that an offer is not accepted from the first group of candidates, we revisit the search and present more.
Retained search is indeed more expensive – the fee for a retained search is typically 33% of the placement’s first year total cash compensation and it is paid on specific dates, rather than on offer acceptance – but we guarantee placed candidates for one year, and our rate of retention is unmatched.
How does the retained model allow us to deliver a diverse shortlist? As diversity, equity and inclusion is at the heart of what we do, attention is given to an inclusive search process that purposefully brings diverse leaders to the table, from start to finish. As part of the proactive outreach, we help diverse candidates to understand that inclusion is valued within the culture of our clients and that they should consider this role above others. As our own team is diverse, we each have different networks and are able to tap those networks for every new search.
The competition for diverse candidates is particularly fierce. How your search is managed and by whom is important. Put simply, if identification of the “right candidate” and long-term retention of diverse talent is desired, a retained executive search is your best investment. Ultimately, our success is defined by the quality, long-term commitment and impact of the person hired.
