When to Use Contingency Recruitment, Retained Search, and Recruitment Outsourcing
Recruitment is a complex and dynamic process that goes beyond simply filling vacancies. It’s about finding the right talent to drive your organisation forward, ensuring that each hire aligns with your strategic goals and company culture.
However, with various recruitment models available, knowing which one to choose can be challenging. In this blog, we’ll break down three primary recruitment models: contingency recruitment, retained search, and recruitment outsourcing. By the end, you’ll have a clearer understanding of when to use each approach, helping you optimise your hiring strategy.
Contingency Recruitment: Quick and Efficient
Contingency recruitment is often likened to a race. Multiple recruiters may compete to find candidates for a position, and you only pay the recruiter who successfully places a candidate. This model is particularly useful when you need to fill positions quickly and are open to considering a wide pool of candidates. But how does it work, and when should you consider it?
How Contingency Recruitment Works
In contingency recruitment, recruiters are incentivised by the potential to earn a commission upon successfully placing a candidate. Because there is no upfront fee, this model can be attractive for organisations looking to minimise initial costs. Recruiters typically source a large number of candidates, casting a wide net to ensure they find someone who fits the basic requirements of the role.
When to Use It
Contingency recruitment is best suited for roles that do not require highly specialised skills or for filling multiple positions quickly. It’s also an excellent choice when you want to compare candidates from different agencies and select the best from a larger pool. However, it’s worth noting that because recruiters work on a commission basis, they might prioritise speed over quality, which could lead to a higher volume of candidates but potentially less thorough vetting.
An Example of Contingency Recruitment
Imagine you’re the HR manager of a retail chain that’s expanding rapidly. You need to hire several store managers and sales associates across multiple locations. With contingency recruitment, you can engage several recruiters to help you fill these roles quickly, ensuring your new stores are staffed on time.
Retained Search: Precision and Exclusivity
Retained search, also known as executive search or ‘headhunting’, is a more specialised and exclusive approach. This model involves paying a recruiter an upfront fee to conduct a thorough search for candidates who meet very specific criteria. Retained search is typically used for high-level or niche positions where finding the right fit is critical.
How Retained Search Works
When you opt for retained search, you’re engaging a recruiter or recruitment agency to dedicate significant time and resources to finding the perfect candidate. This process often involves extensive market research, in-depth interviews, and a high level of discretion. Because you’re paying upfront, the recruiter is committed to delivering quality over quantity, focusing on candidates who not only have the required skills but also align with your organisation’s culture and long-term goals.
When to Use It
Retained search is ideal for filling senior executive positions, specialised roles, or when the stakes are high, and you need to ensure a perfect fit. If you’re looking for a CEO, CFO, or another key leader who will shape the future of your organisation, this model provides the thoroughness and attention to detail required to make the right choice.
Examples of Retained Search
Consider a multinational corporation looking to hire a new Chief Technology Officer (CTO). The role requires not only technical expertise but also a visionary leader who can guide the company’s digital transformation. By engaging in a retained search, the company can ensure that the recruiter conducts a meticulous search, identifying and attracting candidates who possess the unique blend of skills and leadership qualities needed for this critical position.
Alternatively, consider an engineering company looking to hire a Senior Civil Engineer with very specific skills. The role is critical for meeting the company’s strategic objectives. However, there is a critical shortage of that type of engineering speciality. Using a retained search approach, the selected recruitment agency will be focused on very carefully searching among candidates, who are not active in the job market and will position the opportunity favourably for potential candidates.
Recruitment Outsourcing: Comprehensive and Scalable
Recruitment outsourcing or recruitment process outsourcing (RPO) takes a holistic approach by handing over all or part of your recruitment process to an external provider. This model is particularly beneficial for organisations that need to scale rapidly or those that lack a dedicated HR team. Recruitment outsourcing allows you to leverage the expertise of external professionals while freeing up your internal resources for other strategic initiatives.
How Recruitment Outsourcing Works
With recruitment outsourcing, you partner with a third-party provider who manages the entire recruitment process—or specific aspects of it—on your behalf. This can include everything from sourcing and screening candidates to conducting interviews and managing the onboarding process. The provider operates as an extension of your HR department, ensuring that recruitment efforts are aligned with your company’s goals and values.
When to Use It
Recruitment outsourcing is an excellent option for companies undergoing rapid growth, entering new markets, or dealing with high-volume hiring needs. It’s also ideal for organisations that want to streamline their recruitment process and ensure consistency in hiring practices across different locations or departments.
An Example of Recruitment Outsourcing
A renewable energy company is scaling its operations to meet the growing demand for sustainable energy solutions. With limited internal HR resources and a need to hire hundreds of engineers, technicians, and project managers, the company opts for recruitment outsourcing. This allows them to tap into the expertise of an external provider who can manage the recruitment process efficiently, ensuring that they meet their hiring goals without compromising quality.
Conclusion: Choosing the Right Recruitment Model for Your Needs
Each recruitment model—contingency recruitment, retained search, and recruitment outsourcing—offers unique benefits depending on your organisation’s needs and hiring goals.
- Contingency recruitment is your go-to model for quick, high-volume hiring when you need to fill positions fast without an upfront investment.
- Retained search is the ideal choice for high-level, specialised roles where the right fit is crucial, and a thorough, focused search is required.
- Recruitment outsourcing offers a comprehensive solution for organisations that need to scale rapidly or streamline their hiring process.
By understanding the strengths and applications of each model, you can make informed decisions that enhance your recruitment strategy and help you build a talented, high-performing team. Whether you’re filling a single executive role or scaling your workforce, choosing the right recruitment model is key to securing the talent that will drive your organisation’s success.
Contact Competence SA if you wish to choose any of these 3 recruitment models to meet your staffing needs.
About Competence SA
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