When a top executive hears the term "professional recruiter", he or she will likely only think of retained search. When managers who hire entry level and lower level professionals hear that same term, "professional recruiter", they may only be familiar with contingency search. As a professional recruiter with a career in both, let me eliminate some of the confusion by explaining those terms, as well as some variations. I will also express my opinion as to when each should be used

CONTINGENCY SEARCH

A Contingency Search Assignment is most commonly used when you, as a hiring official, want to recruit on the position yourself and have a fair chance of avoiding paying an agency fee. For an easy assignment, a contingency search notice will get many agencies actively working on your assignment. You pay only the search firm that provides the candidate you actually hire.

Unfortunately, you are often flooded with inadequately screened resumes because the agencies are in competition with each other to be first to get each candidate's resume to you. Many agencies may each put forth a little effort, with the hope of winning your fee. Some search firms may not tell you this, but for a difficult assignment, or a discounted fee, you may find that none of the agencies will put forth the required effort. This may lead to a selection from relatively unqualified candidates or lead to having months pass without success in filling your open position.

Our recommendation is to work with a very limited number of firms that you trust, and give them the necessary communication links and details required to do their jobs effectively. Build relationships of honesty and cooperation.

EXCLUSIVE SEARCH

An Exclusive Search Assignment is a contingency search assignment given to only one search firm. You must have confidence that the firm can and will produce for you. The promise of exclusivity is generally an effective method to gain a search firm's commitment to work a moderately difficult job assignment, on a contingency basis. It only works if the search firm has never been told that they had an exclusive search assignment when they did not. If that happens, they are not likely to accept another search assignment from you, or worse yet, your company is now possibly a 'source company' for them rather than a client.

RETAINED SEARCH

A Retained Search Assignment can be used anytime you can assume that you will need to pay a service charge to fill a particular position. A retained search costs about the same as a contingency assignment, with the addition of expenses if you require the consultant to travel to interview candidates. You pay one-third of the estimated service charge to begin the search and the remainder over the next two months. A retained search can also be used when you need to maintain a degree of confidentiality, such as when there is an incumbent to be replaced, or if you have concern about any public impression of high turnover within your company. A retained search is a good way to know that someone is actually working on a difficult assignment and that it is likely to be filled. A retained search will also minimize the number of recruiting contacts you must maintain and frequently will include additional services such as salary surveys or interviewer training.

Any reputable search firm will work diligently to complete the assignment. To ensure success, share your organizational data and your complete selection criteria and avoid changing the job specifications or reporting relationship once the search has begun.

PREFERRED SEARCH (OR MODIFIED CONTINGENCY)

My firm calls any assignment we take that is a combination of the retained and contingency relationships, a Preferred Search. The client pays a portion of the estimated service charge up front in exchange for the search firm's commitment to work diligently on the assignment. This may be appropriate when just a review of their currently active resumes and normal recruiting may not turn up the necessary degree of expertise or desired quality of candidates. The remaining one-third, or two-thirds, of the fee may be paid contingent upon the search firm providing the candidate who is hired.

In addition to use with difficult assignments and periods of extremely tight market conditions, this option may be advantageous for a client who is in a state of reorganization and whose requirements are subject to change. If your company changes the requirements or cancels the search before it is completed, you will have paid only a portion of a total service charge.

CONTRACT RECRUITING

The term contract recruiting is used for two different kinds of assignments; ones in which you pay at a fixed rate per placement, or ones in which you pay an hourly rate for the actual time and expenses of individuals within a recruiting team, and you typically get the benefit of their extensive candidate and networking database with that hourly rate.

Contract Recruiting can be very effective when filling a large number of positions, such as in a plant start up. I have seen a placement completed for as little cost as one hour of researcher's and four hours of consultant's time, under $1,000. In this case, the search firm specialized in the needed industry and was willing to include the use of their extensive industry and candidate files in their quoted hourly rates. As a search firm, we frequently offer time-and-expense recruiting to companies to whom we can statistically project significant savings, based upon data collected from having worked a significant number of their assignments in the past.

If a Form 1099 (government income reporting form) is involved, you should be aware of the restrictions and tax concerns associated with paying an individual as a contractor. Several Fortune 500 companies have had to pay millions in back pay and benefits when their practices did not pass the stringent IRS test for independent contractor status.

Also, beware of a contingency or retained search "consultant" who will work cheaply if you give him, or her, a contract. Logic would indicate that they may not be good enough to earn a better living as a professional recruiter. Their skill level and work habits will not be changed by your company paying them on a contract.

INTERIM EXECUTIVES

More and more companies are finding occasions when temporary employees should be used to augment their core employees. This may be to cover seasonality, to free up their own employees for special projects, to fill specific functions that are not necessarily ongoing, or for especially skilled outsiders to fill critical positions, even the President's office, in an emergency. We have placed temporary executives in critical positions while a search was being conducted for the permanent employee.

I recommend against using temp-to-hire to fill all of a company's open positions, as some companies try to do. In effect, this has the negative impact of causing too much of the company to be staffed from that limited population which is willing to initially take a temporary assignment, leading to sub-standard overall performance.

I am not advocating that every company should use every one of the above options. But, if you have found opportunities to sharpen the way you use search firms, it is likely you are saving your company's bottom line real money. This could be by paying reduced fees, getting more services for the fees spent, getting better quality candidates by using the right kind of search, or by having positions filled more quickly, ---avoiding lost opportunity costs.