Contingent Search Vs Headhunter Executive Search - What You Need To Know

Even though many HR departments and hiring managers are well aware of contingent search and headhunter executive search firms, only few are aware of the subtle differences in how their business models operate and what effect this has on a search. When it comes to filling a vacant senior or C-Suite position with the right talent, choosing whether to work with an executive search firm or a contingency search firm will often decide the outcome of placing the right candidate.

To help provide a full understanding of what you need to know, this blog will explain the subtle (and not so subtle) differences in each search firm's methodology, relationship, exclusivity, service quality and fees structure.

Fees explained

Ï Executive search

Executive search firms, also known as retained search firms, will require an upfront fee from their clients which is usually 20 to 50% of the total fee depending on the search firm. This fee reflects all the initial work that is required to identify, interview, assess and shortlist the most top-performing candidates. Once a presented candidate has been hired by the client, they will then be billed the remaining fee.

In the worst-case scenario that a relevant candidate is not hired, the client will usually pay only the initial fee. Although the client is paying an upfront fee, the trade-off is that the executive search firm works closely with them to provide a superior search for sourcing both passive and active senior-level candidates.

Ï Contingent search

Contingency search firms operate on a ‘no win, no fee’ business model and do not charge their clients any upfront fees, presenting less of a financial risk. However, a contingent search firm will only get paid once their presented candidate has been hired by their client.

This also creates a distant or ‘loose’ working relationship between both the contingency firm and their clients. By opting to focus on the quantity of candidates rather than quality, these search firms try to operate as fast as possible to fill a larger amount of vacancies.

Methodologies explained

Ï Executive search

Executive search firms specialise in C-Suite, senior-level and executive positions. They will work exclusively with their clients to fully understand the requirements of the position and the needs of the organisation before agreeing on a preferred methodology. This is an extensive and rigorous process. Their headhunters work together with their in-house research teams to create ‘candidate personas’, which outline what an ideal candidate will look like.

For example, let’s say an executive headhunter is sourcing talent to fill a senior management position. They would consider important factors such as the personality traits of each individual they approach and interview. A leadership position requires traits such as empathy, assertiveness and strong communication skills.
If a candidate is hired possessing assertiveness but lacks in empathy or communication, it will result in a bad hire and negatively impact the team around them.

Retained search firms will also actively pursue suitable candidates regardless if they are currently looking for new career opportunities. Because they have access to a global talent pool of contacts that they have already established a relationship with, their headhunters are able to reach out to a wider pool of candidates and persuade them to consider the position they are hiring for.

Ï Contingent search

Unlike headhunter executive search, contingency search firms focus on hiring for medium to low-level positions. Because of this, their methodology is a much more fast-paced approach. Rather than having the luxury of working closely with their clients and developing a relationship, they cast a much wider net during their search.

They utilise techniques such as posting ads in online job forums and cold calling. These firms will also be competing with internal HR departments and other search firms, meaning they will simply move on if it becomes too difficult to find a suitable candidate to fill a position.

Quality of service

Ï Executive search

Because retained search firms operate exclusively with their clients and rely on their reputation, they focus on providing the highest standards of quality. Their headhunters are highly experienced across various industries and are masters in the art of persuasion. Combined with in-house research teams, executive search firms develop proven search techniques for discovering high-calibre talent.

Ï Contingent search

Due to focusing on quantity over quality, providing a high level of service isn’t a top priority for contingency search firms, as speed is key to their business model. As they only receive payment once a candidate is placed, they are more focused on filling a position rather than if the candidate is the best fit for the position and organisation.

In summary

If you are needing to fill a vacant executive, C-Suite or senior-level position, choosing between a headhunter executive search and a contingency search firm can decide whether a good or bad hiring choice is made. Make sure you are making the right decision by searching online a leading executive search firm today and discovering how they can assist your specific needs.