Why We Love Retained Search (And You Should Too!)

Image: Why We Love Retained Search (And You Should Too!)

What percentage of your business is contingency, versus retained search?

If you answered “all” or “mostly contingency” then you’re missing out. Because for permanent, mid to senior level positions then there’s no reason you shouldn’t receive part of your fee up front.

It always surprizes me how few recruiters pitch for a retainer. Usually it’s due to either a lack of awareness (“I never thought about it before”), a limiting belief (“I don’t think my clients would agree”) and/or lack of training (“I’ve never been taught how to do it”).

That’s a shame because for the recruiters who have the skills and confidence to win retained search assignments, the benefits are substantial:

  • A retainer is the highest form of client commitment, and sends a clear signal that they’re serious about filling the position.
  • More commitment usually leads to improved communication and co-operation throughout the placement process.  Many of the roadblocks that contingency recruiters come up against are removed.
  • Your client works with you exclusively, so you eliminate the competition.
  • Your chances of filling the job increase dramatically, so you’ll make more placements.
  • More placements equal increased billings, so you make more money for the same (or less) effort.
  • You avoid wasting time on dead-end searches, so you experience less frustration.
  • Your clients perceive you as a true “consultant” rather than just a salesperson, so you get treated with more respect.
  • Your clients are happy to receive and return your calls, so you waste less time chasing them for feedback.
  • Your clients are receptive to your advice, so you gain greater influence over the hiring process.  That often translates into faster decisions and fewer deal-breakers.
  • You can predict your pipeline with greater accuracy, achieve improved cash-flow, and feel a greater sense of security.
  • Because you’re not in a “race” against other agencies, you can do the job properly – and enjoy greater job satisfaction. You have an opportunity to add real value to the recruitment process and feel an increased sense of pride in what you do.
  • When you re-position yourself as a retained search consultant / firm, you gain prestige with both clients and candidates. The assumption is that if you’re a retained recruiter, you must be good.
  • Once your clients are accustomed to working with you this way, you can win repeat business on a retained basis, again and again.
  • The more retained business you win, the more retained opportunities you will attract. Thus begins a “Virtuous Cycle” of success which snowballs and gains momentum.
  • Best of all, you are assured of getting paid. Even if the client cancels the order before you complete the assignment — for example due to a merger, acquisition or internal re-structure — then at least you will have received 1/3 (or more) of your fee, which is better than nothing!

Retained business can be extremely rewarding, not just financially but also in terms of achieving self-actualization. If you desire to serve your clients at the highest level, and receive the maximum client commitment in return, then resolve to increase percentage of retained work you win – starting now.

Let Mark train your team! He offers a course called “Secrets of Selling Retained Assignments.” A few of his clients have won their first retainer within 7 days of attending the course! For a free course outline, with no obligation, please contact us.

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  1. I work mostly retained with a bit of contingency which I keep promising myself to stop (and then I succeed in making a contingency placement and re-think it).

    From my experience, some industries are open to retainers if you can prove value. In other industries – I don’t care what you do – they will never pay a retainer and rarely even work exclusive. The key is to find the industries where retainers make sense to decision makers.

    One hint – speak to decision makers only. If you are speaking to HR, you have already lost.

    1. Thanks Chuck! Agree with your point about speaking with decision makers only. I have once sold a retainer to HR, but it’s WAY harder because they usually don’t have the authority. Plus you want to sell to the person who’s feeling the pain. Regarding industry sector, I take your point that some industries are more used to retainers and accept them more easily. But having now taught hundreds of recruiters in every conceiveable industry to sell retainers, I’m certain that it will work in every sector — IF you do it the right way.

  2. Mark, Chuck – Would you mind sharing with us the industries where you have found it more likely to be able to win retained searches. Thanks

    1. Hi Sef – Honestly, which industry is less important than how urgent/critical the client regards the position to be. If it’s a critical hiring need – one they can’t afford to get wrong – and if there is URGENCY, then that’s a good prospect for a retainer or engagement fee.

  3. Agree with all you have written. Your article is clear on the benefit to the recruiter, however what most people struggle with is; What the key benefits are for the client in order to get their buy in to retain.

    1. Hi Dave,

      The short answer is that by paying a retainer or engagement fee, the client secures your full commitment. You give their project your priortiy attention, and allocate the maximum resources to completing the search successfully. They might believe that by using 5 recruiters, they increase their chances of filling the job. You need to politely point out that since each of those recruiters only has a 20% chance of success, how motivated are they to fill the job? You need to educate them that in contingency recruiting, they are competing with their recruiter(s). Contingency recruiters must send the best candidates to multiple employers to increase the chances of making a placement. Only the retained clients get first refusal on all candidates. There’s a LOT more to it obviously, too much to give you a satisfactory answer here. If you are really motivated to win retainers, call me and I’ll do my best to help you.

      Take care


  4. Hi all

    I can understand the benefits of Retainer fees, upfront capital, to use premium job adverts, to build trust and commitment. The difficulty I find is selling this option to clients. Can I ask is is in everyones opinion is Catering and Hospitality a sector that retainer fees work.

    1. Hi Andy,

      You can sell retained recruitment solutions in every market sector. As I mentioned above, it’s more traditional in some sectors than others and therefore they’re accustomed to it and you might find higher acceptance of it. In Catering and Hospitality, you could certainly sell a retained search for senior management roles, e.g. General Manager, Executive Chef. However for Chef or Front of House staff, I imagine you would encounter resistance. Rather than pitch a full retainer (paid in 3 equal stages), I would ask for an Engagement Fee (even £500 – £1500 for lower salary roles), which would be deducted from the final invoice. The actual amount is less important than just getting something up front as a sign of good faith that they’re serious about filling the role.