Did you know there are two different (contractual) models in executive & direct search?.

The retained model involves the client paying a retainer fee at the start of the assignment, which includes an exclusivity clause. The consultant implements the necessary resources and conducts the search until they find a positive result for the client. If difficulties arise during the search, the consultant can discuss options with the client, such as widening the search targets or specifications.

On the other hand, the success fee model involves the client paying for the service only when a candidate has been found/appointed. The candidate search is generally not exclusively entrusted to one firm, and several providers can simultaneously conduct a search without an initial outlay by the client company.

Exclusivity clauses can be combined with either retainer or success fee clauses, and the clause may have a time limit in some countries. In general, exclusivity clauses are usually associated with the retainer model.

The consultant's methodology differs depending on the contractual model used. The retained model involves careful analysis of the position and working environment & culture, proposing an ideal and realistic profile to be targeted, developing and implementing appropriate active search strategies, and presenting a limited number of candidates matching the position ('shortlist').

The success fee model also involves thorough candidate searches, but is more focusing on professional skills, and potentially putting pressure on the candidate to make a quick decision during the recruitment process.

Overall, the retained model involves a partnership-based relationship between the consultant and the client, while the success fee model is more one-directional.

Advantages of the retained model

Here are some examples of why the retainer model may be better than the success fee (or 'no cure no pay') model in executive and direct search. At Cross International we fully support the retainer model and here is why:

1.      More focused and personalized service: With a retainer model, the executive and direct search agency is paid upfront to conduct a thorough and focused search for candidates that meet the client's specific needs. This allows the agency to invest more time and resources into the (active) search, and provides a more personalized service to the client.

2.      Greater commitment from the executive and direct search agency: The retainer model requires the recruiting agency to commit to the search until a suitable candidate is found, regardless of how long it takes. This incentivizes the agency to work harder to find the right candidate, as they have already been paid for their services.

3.      Higher-quality candidates: Because the executive and direct search agency is paid upfront and has more time to conduct a thorough search, they are more likely to identify and attract high-quality candidates who may not be actively seeking new opportunities.

4.      Reduced competition: With a retainer model, the client typically agrees to work exclusively with the executive and direct search agency for a set period of time. This reduces the competition for the best candidates, as other executive and direct search agencies are not able to work on the same search.

5.      More predictable costs: The retainer model allows the client to know the exact cost of the executive or direct search services upfront, regardless of how long it takes to find the right candidate. This can be particularly beneficial for companies with limited budgets or for those who want to avoid any unexpected costs associated with a prolonged search.

Overall, the retainer model provides a more focused and personalized service, a greater commitment from the executive and direct search agency, higher-quality candidates, reduced competition, and more predictable costs, making it a more attractive option for clients.

*This info is based on a report of the European Confederation of Search and Selection Associations (ECSSA). Feel free to contact us if you want to receive a copy of the full ECSSA report or if you want to find out more about CrossInt's Board, Executive & Direct search services.