What Is Retained Executive Search?
Executive search is the process of finding and hiring well-qualified individuals to run major executive positions within a company. This is a very exacting process, and the end result will be to place a large amount of responsibility and company resources in the hands of a single applicant. For this reason, a small but lucrative business sector has cropped up to provide executive search consultancy to help companies pick the perfect fit for each position.
Different Types of Executive Search
Not all executive search firms are created equal. There are two major types of executive search firm: Contingency Executive Search and Retained Executive Search.
The difference between the two is a matter of payment planning. Contingency search firms are only paid upon completion of the job, while retained executive search firms typically receive a third of the payment up front, a third after 30 days and the final third after 60 days. This gives retained executive search companies significantly greater amount of capital with which to find well-qualified individuals, and makes them the preferred choice for many companies seeking to hire C-level executives, board members, corporate officers and other senior talent. By comparison, contingency firms tend to only be able to perform cursory research and may not be able to find high-quality candidates.
Retained executive search firms tend to only work for one company at any given time, whereas contingency firms may have dozens of executive searches running at any given time. Admittedly, some contingency firms have begun offering exclusivity arrangements with clients, but even then, retained firms tend to have more capital to do deep research. Similarly, some retained executive search firms will only offer the final third of the payment at the completion of the job. Companies looking to hire executive talent are advised to do their research on the different executive search options out there before settling on one.
Types of Retained Executive Search Firms
Retained executive search firms can be further subdivided according to their focus. While some firms, known as "generalists," hire executives for businesses in every sector, others hire executives for only one or two different sectors. These specialist firms are often used to hire people for whom knowledge of the field is of utmost importance, while generalist firms tend to be used to fill positions whose main need is for an individual with proven business talent.
Because generalist firms tend to be larger, they can bring an increased level of awareness toward filling the position. With larger lists of contacts and a broader understanding of the executive job market, they may have a better time at finding business executives. They tend to have hundreds of offices around the world, each catering to a specific sector of employment but capable of gaining access to wider databases of talent.
Retained executive search firms have become essential for businesses looking to fill top corporate-level positions. More and more companies around the world are using retained executive search to fill top-level positions. These positions have too much responsibility and money attached to them not to get an outside opinion.
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