At some point in your job search, you may encounter a recruiter who is searching for the perfect candidate to fill a job order. If you’ve never worked with one before, it can be helpful to understand more about how recruiters work. There are two types of recruiters: contingency and retained.

Contingency Recruiters

Contingency recruiters are paid only if their candidate is placed — they compete with other recruiting firms (and sometimes internal recruiters at the client company) to make a placement. Approximately two-thirds of recruiters are contingency recruiters.

Contingency firms are more often used for mid-level roles up to executive positions. Contingency recruiters receive payment only when their candidate is hired. Since they are competing with other recruiters (both other firms as well as internal recruiters with the client company, in some cases) to provide candidates for each assignment, they tend to work fast and to submit multiple candidates to the client company. This means you may be one of many candidates for a given job.

Retained Recruiters

Retained recruiters are hired by a client company for an assignment and are paid regardless of the results of a search. Typically only one firm is hired by a client company for a given job opening in a retained search. Retained searches are more often used to fill higher-level positions with salaries of $100,000 and above. These search assignments often take 90-120 days. Retained recruiters are often used for C-level candidates (CEO, COO, CTO, CMO) and for searches requiring a high degree of confidentiality — for example, when a high profile university is searching for a new athletic director.

For retained searches, the recruiter will assemble a short list of candidates — usually 3-5 names. Therefore, if a retained recruiter considers you for a position, you will probably be part of a small group of candidates.

Retained recruiters are usually paid a portion of their fee before the hire is made (and again, they are paid whether a successful placement is made or not).

Association of Executive Search Consultants (AESC)

The AESC, an industry trade group, outlines some key differences between the two types of recruiters:

Retained Contingency
• Primarily for recruiting senior executives, especially for unadvertised openings. • For filling mostly middle level executive and professional positions as well as representing candidates desiring placement.
• The objective is to “separate the exceptional from the average performer” in consideration of the employer’s needs. • Focuses on identifying a pool of qualified candidates so the hiring company (the “client”) can make a selection.
• Payment is made through a series of installments, and does not depend on a successful candidate placement. • Contingency recruiters are only paid if they find and place a suitable candidate to fill the assignment.
• Timeline: Recruiter usually recommends 3-5 highly qualified candidates to the hiring company within 4-8 weeks. • Often presents candidates within 1-2 weeks of receiving the search assignment.

– Source: The Association of Executive Search Consultants (AESC)

What Does the Recruiter Do?

The recruiter has three responsibilities:

1.         To obtain specifications for a particular candidate placement

2.         Identify candidates who meet those specifications

3.         Make the match between jobseeker and employer.

To accomplish those three tasks, the recruiter may review several hundred resumes and make dozens of phone calls.

The recruiter sources candidates and presents them to the employer. At that point, the hiring manager can choose to interview some (or all) of the candidates, or the hiring manager will further refine the criteria for the assignment and request additional candidates. The process continues until a hire is made.