Ditching Recruiting Firms Contingency, RPOs, and Old-Fashioned Retained Search

Why are more and more forward-thinking employers ditching recruiting firms that produce, well, crap.   Contingency, RPOs, and traditional retained search firms in favor of the 21st century success based recruitment?

In a 3.5% unemployment rate, most Hiring Managers know the undisciplined, inexperienced, and average “C players” are predominant on job boards.  In addition, with job aggregators, job openings get overexposure to the point the company suffers in public relations and branding.  same goes for RPOS and contingency search firms – the more they repost the same job posting, the worst candidates are revealed.

Ditching Recruiting  Firms that Fail to Produce

You have certain objectives you want a new hire to meet.  The target are passive candidates, those not reading job postings and not actively looking,   What interests passive candidates?  A new challenge, a different product or service portfolio, location, company size, and more.   A typical job posting showcasing responsibilities and requirements is no enthusiasm roadmap.  It is in reality a robotic drone of words strung together that entices only the unemployed or average active job seeker.

Ditching Recruiting Firms that Fail to DeliverEven the traditional retained search model, which does produce much better candidates, is going by the wayside.  More and more companies are ditching recruiting firms that are traditional retained search models.

While employers understand the deposit to initiate a search, they expect results.   Most have a 90 day to 6 month replacement guarantee.  But they collect all the fees within 90 days regardless of outcomes.

‘The new paradigm, which NextGen Global Executive Search has used for a decade, is a search should be success based in regards to the recruitment fees.  Also known as a performance based search, after the deposit the 2nd invoice is due upon acceptance of the shortlist and in-person interviews are scheduled.

Ditching Recruiting Firms with Compensation Based Fees

In addition, success based search fees should be a flat fee and not based on compensation.  The reason is simple, in that compensation based fees can cause an increase in the overall recruitment fees during offer negotiations which is an inherent conflict of interest.  Finally the 3rd and final invoice occurs on the hire and is backed by a  24 to 36 months replacement guarantee.

The end result is both the employer and recruiter have skin in the game and the employer is confident that the majority of the fee is based on the recruiting firm meeting the objectives and a solid new hire.  To read further on why companies are ditching recruiting firms and comparisons between contingency, RPO, traditional retained search, and success based retained search, download the PDF.

 

 

About Kelley Reinhardt

Partner | Retained Executive Search Consultant with 25+ years recruiting senior executives and functional leaders in mobile networks engineering service and Industrial Automation including robotics, SCM, manufacturing, RPA, IIoT and LED lighting.
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