Retained search

Key Takeaways

• Retained search is an exclusive partnership between a client and a recruitment firm.
• You pay an upfront fee to secure the time and resources of the search firm.
• This model is most common for executive, board-level, or very specialized roles.
• The process is detailed and focuses on finding the best fit rather than the fastest hire.
• It offers a high level of service and a guarantee that the role will be filled.

Quick Definition

Retained search is a recruitment service where you hire a search firm exclusively to fill a specific high-level position. You pay the firm a portion of the total fee upfront to manage the entire process from start to finish.

Detailed Explanation of the Retained Model

When you use a retained search, you are hiring a consultant to act as an extension of your company. Unlike other hiring methods where multiple agencies might compete to find a candidate, this model is based on a dedicated partnership. You give the project to one firm, and they commit their full resources to finding the right person for you.

The fee structure is one of the most distinct parts of this model. Most firms use a "retained" payment schedule, which usually breaks down into three parts:

1. The Initial Retainer: You pay this when the search begins. It covers the costs of research and the time needed to start the project.
2. The Shortlist Fee: You pay this when the firm presents a group of qualified candidates that meet your specific needs.
3. The Completion Fee: You pay the final amount once the candidate signs their contract and starts the job.

The process involves deep research. The firm does not just look at people who are looking for work. They look for "passive candidates" who are currently successful in other roles. The search firm will:

• Study your company culture and the goals of the role.
• Create a list of target companies and industries.
• Reach out to potential candidates directly.
• Conduct deep interviews to check for skills and cultural fit.
• Perform background checks and check references.

This method is thorough. It is designed to find the best possible person for a role that is hard to fill or very important to the future of the company.

Why Retained Search Matters for Your Business

Choosing the right leadership is one of the most important things you will do. A bad hire at the executive level can cost a company a lot of money and cause problems for the rest of the team. This is why many businesses choose a retained search for their most important roles.

Here are some reasons why this model is important:

• Access to Passive Talent: Many of the best people for high-level roles are not looking at job boards. They are busy doing a great job elsewhere. A retained firm has the time and skill to find these people and talk to them about your opportunity.
• Confidentiality: Sometimes you need to replace a leader without the public or your competitors knowing. A retained firm can conduct a search quietly. They only share details with candidates who have been vetted and have signed a non-disclosure agreement.
• High Priority: Because you have paid an upfront fee, your project is a priority for the firm. They will stay on the job until it is finished. They do not move on to other projects if the search becomes difficult.
• Quality Control: The firm spends more time with each candidate. They look at more than just a resume. They look at leadership style, personality, and long-term potential. This helps make sure the person you hire will stay with you for a long time.
• Market Insights: During the search, the firm gathers a lot of data. They can tell you what competitors are paying and how people perceive your brand. This information is very helpful for your future planning.

Common Usage and Examples

You will most likely see this model used for positions that have a big impact on the company. These are not roles you fill every day.

• C-Suite Executives: When a company needs a new Chief Executive Officer (CEO), Chief Financial Officer (CFO), or Chief Operating Officer (COO), they often use a retained firm. These roles require a very specific set of skills.
• Board Members: Finding people to sit on a Board of Directors requires a high level of professional networking.
• Niche Technical Roles: If you need a lead scientist or a specialized engineer in a field where very few people have the required skills, a retained search is a good choice.
• New Market Entry: If your company is moving into a new country, you might use this service to find a General Manager who knows that specific market.

Synonyms and Antonyms

Synonyms

• Executive search
• Headhunting
• Search and selection
• Direct hire search

Antonyms

• Contingency search: A model where the agency is only paid if they find the person you hire.
• General recruitment: High-volume hiring for entry-level or mid-level roles.
• Internal hiring: Using your own HR team to find candidates without outside help.

Related Concepts

• Talent Mapping: The process of identifying all potential candidates in a specific industry or region.
• Succession Planning: A strategy for passing leadership roles down to others within the company.
• Executive Compensation: The total package of salary, bonuses, and benefits given to high-level employees.
• Candidate Experience: How a person feels about your company during the hiring process.

Frequently Asked Questions

How much does a retained search cost?

The cost is usually a percentage of the candidate's first-year total compensation. This often ranges from 25% to 33%. Some firms may charge a flat fee instead.

How long does the process take?

Because the search is so detailed, it usually takes between 90 and 120 days. This includes the time for research, interviews, and the notice period for the new hire.

What is the difference between retained and contingency search?

In a contingency search, the agency only gets paid if you hire their candidate. They often work on many roles at once and move quickly. In a retained search, you pay the firm to manage the whole project. They work on fewer roles and spend more time on each one to find the best fit.

Do I get a guarantee?

Yes, most retained firms offer a replacement guarantee. If the new hire leaves or is let go within a certain time (usually 6 to 12 months), the firm will do the search again for no extra cost.

Can I use more than one firm for a retained search?

No. This model requires exclusivity. You work with one firm so they can represent your brand consistently and avoid reaching out to the same candidates multiple times.

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