Executive recruiting agencies generally are paid by their clients in two different methods. A Retained search firm receives payment for finding and recruiting suitable candidates for a position, even if none of those candidates are hired. Employers are willing to accept this agreement when the search firm is of exceptional quality and the employer nearly always hires one of its recruits when seeking to fill a position. In contrast, a firm that works on a contingency basis is paid when the organization hires one of its candidates. This is the way most employment agencies work, but it does not always characterize the best of the executive recruiting firms. Agencies that fill executive and other high-level positions typically receive a retainer fee as long as they send an acceptable number of qualified applicants for a position.
Filling positions on a retainer fee basis usually involves an exclusive contract between a recruiting agency and the client. The recruiter works closely with the organization to determine which types of candidates would be most suitable and even which recruiting methods to use. This prevents the scattered approach that firms working on a contingency basis tend to rely on. Organizations choosing the retainer fee arrangement tend to spend significantly more on the recruitment process, but they find that the additional investment is well worth it.
A company like Kaye/Bassman is known as a retained search agency, developing close relationships with clients to fill positions with the most impressive candidates. That type of relationship may lead to more highly qualified individuals becoming interested in interviewing, even if they originally weren’t even looking to leave their current position. Those persons understand the respect deserved for an agency that is actually retained by the organization looking for managerial and other high-level applicants. In contrast, organizations dealing with agencies on contingency may have several firms attempting to fill the positions, all sending numerous resumes. Sometimes a person has registered with more than one of these agencies and the organization receives that resume from two or three recruitment firms. This can raise questions about whether the candidate feels anxious about finding a new position.