Engaged Search – The Best of Both Worlds
There are three types of agreements commonly used in the recruiting world – Contingent, Engaged and Retained. Contingent is by far the most widely used and favored by companies needing recruitment services. Retained is normally reserved for higher-end executive searches.
But why isn’t Engaged search more widely utilized?
When I started my company in 2009, I relied heavily on the contingent search because it was familiar to my clients and, quite honestly, I needed the business! I used this approach for many years, until I realized the disadvantages: clients using me to build a bench, impossible to forecast a result because there’s no commitment from the client, the need for dozens and dozens of open job orders to get a placement. I spent a lot of years throwing the dice up and hoping for a good result.
Then I discovered the best of both worlds – The Engaged search model!
In a nutshell it’s a hybrid model: An up-front fee to start the search with the remainder of the fee being contingent on filling the role. It’s like engaging a contractor to do work on your home, where an initial deposit is required so they can buy supplies, later deducted from the final invoice.
This is SUCH an advantage for both parties. It eliminates the recruiter’s problems mentioned before (use and abuse, lack of forecasting and tons of open jobs) and, at least in my case, provides our client with an immediate list of 7 guaranteed services. In addition, engaged search placement rates can be as high as 80-90% as opposed to 10-20% for contingency.
FYI – your recruiter now has a decision to make.
Do I work hard for a client that has made no commitment and has 10 other companies working on the same job? OR, Do I kick ass for a client that has made a financial commitment, will likely be more responsive to me and my candidates, and is treating me like a partner?
The engaged search makes for a true business relationship, a partnership.
One where the recruiter is now encouraged to provide a better, more consultative service. And the client is confident that their search is taking priority and holds higher status than any contingent search that may cross the recruiter’s path.
Making the financial commitment is a significant decision, but it’s a small investment to get the right candidate as quickly and efficiently as possible. Consider this when looking at the numbers from Society of Human Resource Management (SHRM):
Research by SHRM suggests that employee replacement costs can be as high as 50%-60% with overall costs ranging anywhere from 90%-200%. Example: If an employee makes $60,000 per year, then it costs an average of $30,000 – $45,000 just to replace that employee and roughly $54,000 – $120,000 in overall losses to the company. Those numbers are staggering and underscore the importance of working with a recruiter that gets it right!
At Tech2 Resources, 99% of our permanent placements remain in their roles beyond the guarantee period; if not, we replace the candidate at no additional cost. In addition, 85% of the candidates we place have a 3+ year retention rate.
If you have any questions or want to find out what your 7 guaranteed services are please reach out to me!
