What is a Pay for Performance Retained Search?
Updated: Sep 29, 2021
Have you ever been stuck with a large invoice for a mediocre hire through a novice recruiter at a “prestigious” corporate search firm? We would be lying to tell you that this doesn’t happen weekly throughout the executive search industry for customers who are not well informed of what the marketplace has to offer. Most customers search for “best executive search firm” on Google, and they end up going with the largest corporate executive search firm with the highest ranking. Unbeknownst to them, they are locked into a retainer agreement that has little room for performance or key performance indicators. Most of the time you are handed off to a bloated recruitment team, where most of the work is handed off to a junior-level recruiter hired right out of college. These searches typically take longer due to the bureaucracy of the large search firm, and they typically are the most expensive option because these search firms are very concerned about their bottom line. We have even seen searches going unfilled for over 1 year because the large search firm has no incentive to fill the job quickly because their profit is already baked into the agreement.
We set out to do things differently in the executive search industry. We want to change how a company partners with our search firm to get real results in a cost-effective and timely manner. Thus, we are introducing a Pay-For-Performance retained search solution. In this blog, we hope to do the following:
Introduce our Pay-for-Performance retained search solution
Explain the benefits of this retained approach
Provide examples of successful searches with current clients
All in all, we understand there is a multitude of options out there for retained executive search, and we hope this article at least points in the right direction of finding the best solution and the right search partner.
What is a Pay for Performance Retained Search?
“So, what is going on here?” is the question you are asking at this point. Let’s not beat around the bush anymore and explain in simple terms our Pay-for-Performance model.
Our retained search model is an exclusive search agreement where we handle everything from start to finish for a particular search. We mean everything. We start from the initial consulting of requirements to past the start date after a candidate is working. We request a total fee calculated as a percentage of the candidate’s first-year salary for the immense amount of work we use towards advertising, screening, and onboarding. We are sure you are thinking that this is pretty typical in the search marketplace, but wait, there’s more…
Since cash flow is very important to organizations in the marketplace, we split our total fee into 4 of the most important stages in the recruitment and hiring process. Not only do we break out our fee, but we also make those payments contingent upon reaching one of those stages. Therefore, everyone concerned is incentivized to meet high-priority goals throughout the hiring process.
Why is Pay for Performance Retained Search Important?
The benefits are as follows:
Saves the company valuable cash flow over a longer period of time
Greater partnership and cooperation between recruiters and hiring managers
Efficient use of everyone’s time to find the right individual
Reduce the typical amount of time required in a hiring process
We could go on and on…There are so many benefits when recruiters and hiring managers are on the same page. Sometimes magic just happens.
Typically, recruiters are confused about the next steps because they are waiting to hear back from the hiring managers that are busy doing their daily work. Hiring managers seem frustrated when they do not see qualified candidates on their desk because the recruiter was not brief on the whole picture of what is needed for that position. Our solution cuts those issues away due to our detailed focus upfront and experience handling the recruitment and hiring process with a range of different organizations (big and small).
Real Example of Pay for Performance Retained Search
“So, have you proved this model works in the first place!?”, is a logical next question you could be asking yourself at this point. YES, we have piloted this search solution to the marketplace for over a year. We have created tremendous success with clients who are continuing to partner with us for their high-priority searches.
One example where we implemented the Pay-for-Performance retained search is for a southern hospital needing a Chief Information Officer. This executive-level position was critical to their organization due to the need for IT infrastructure updates and the increasing cybersecurity threats that all organizations are facing today. The location of the hospital is located in a small southern town that needed to be highlighted, and the unique benefits of the hospital needed to be marketing to the right individuals for this role. To say the least, this search was not something an HR business partner could do alone.
Thus, we set out and did the following:
Completed an initial review and consultation of the position and search
Created a detailed search plan with KPI’s, timelines, and procedures for everyone to follow
Designed integrated advertising, marketing, and recruitment campaign for the position and hospital
Proactively advertising and recruited specific segment of individuals out in the marketplace
Presented the over 5 qualified candidates for the role
Interviewed the top 3 individuals on-site
Ultimately, we finalized the search by hiring one outstanding executive with over a decade of experience in hospital IT to modernize the southern hospitals’ cybersecurity strategy and IT infrastructure. We resulted in saving the hospital valuable cash flow during a pandemic that greatly challenged the hospitals’ revenues. Therefore, the hospital was able to allocate that money elsewhere in the operations of caring for patients and saving lives.
Wrapping It Up
As you have read, we are dedicated not only to helping our clients navigate the complicated hiring process, but we are also committed to saving our clients money throughout the search process. More importantly, our Pay-for-Performance retained search model helps our clients gain results through incremental investments and a collaborative partnership.
To learn more on how we can implement this retained executive search with your organization, please click on the button below to receive a full presentation on the details of the search model and schedule a 30-minute introductory call to learn more.