Retainer – really?!?
Here we go again! Economy is going well, companies start to invest again and new employees are needed – the best, the smartest and of course the most innovative ones – profiles that are scarce and hard to get in the market.
“Companies are in need of more recruitment capacity and try to find a solution as flexible and less expensive as possible.”
Hiring a full-time recruiter is often enough the last solution they think of. In times of crisis HR business partners covered the task of recruitment, if there was any hiring to do. But now the focus is getting back to acquiring new talent and finding the right people in a highly competitive market. So a specialist is needed. In general there are three options:
- hiring a talent acquisition specialist into a permanent position as a strategic long-term approach,
- getting a good interim recruiterfor a few weeks or months in order to solve the problem as soon as possible mainly on the operational level or
- co-operating with a specialized recruitment / executive search companyin order to fully focus on filling the most important positions and to reach mid-term strategic goals
Many companies choose the third option nowadays, as they feel that they can tackle big parts of the problem themselves with existing staff, but need punctual help. So they look for a partner that works quickly, professionally, trustworthy, discretely and reliably in order to fix the problem. At the same time they want to have the broadest reach possible in the market and budgets for the search are mostly not existent or very low…. a difficult starting point!
Due to the shortage of budgets and the desire for the maximum effect many companies fall into the trap of recruitment companies that promise a quick solution on a “no cure – no pay” basis. But as they know, that these parties cannot really be focused on the one assignment, companies decide to brief a handful of these parties or even more. In many cases the effect is staggering. Besides the poor amount and quality of profiles that often is presented, the main problem is that this approach mainly harms the reputation of the company that is looking for new employees. It is represented by a bunch of recruiting agencies that mostly don’t know much about the company, so finding a true fit is more or less a coincidence. The few potential candidates in the market that are a real fit regarding their skill set are approached by diverse parties for the same position, which doesn’t make them very confident that it is a serious job offer. And you can never be sure if and when the position is being filled as no commitment on the side of the hiring company leads no commitment on the side of the recruitment company.
So what is the alternative?
“Instruct one serious recruitment / executive search company that represents your company professionally and commit to that assignment!”
What does that mean? Serious executive search companies often ask for a retainer – a kind or prepayment that will be discounted from the final success fee. They don’t do that in order to annoy their clients – they have good reasons for it. A retainer is a kind of guarantee for both sides. This way the search company can make sure to spend enough time and attention to get to know the company, the position to be filled and the profile to be searched for in order to generate the highest likelihood possible to find and motivate the right candidate. A separate search project can be started with dedicated researchers on it. The market can be penetrated by using different tools and ways of contact. So the client can be sure that everything possible is done in order to find the right candidate as soon as possible. And the search will not just be quit if success stays away initially.
For the search company the retainer is important not only to cover the cost for starting up the dedicated search, but even more to preserve the dedication of the client and to have exclusivity on the search. This is most important for the process once the first interesting candidates are found. The success of a search is very much dependent on the professional conduction of the recruitment process – this goes for the search company as well as for the hiring company. An exclusive approach as well as quick feedback on introductions, interviews, decisions etc. are crucial in order to keep the candidate motivated and interested. Every postponement sets the success of the recruitment project at risk which means that it becomes very hard to deliver for the search company if the client doesn’t co-operate. A client that made a prepayment will make sure that the process runs smoothly…
So please don`t feel annoyed or played games with when a recruitment / executive company asks for a retainer. If you are sure you want to fill a position and you cannot do it through own sources, go for the initial investment in order to receive a high-quality solution soon. A position that keeps being vacant for months will cost you more in the end…