Retained search, in-house recruiter, contingent recruiter, and RPO defined


Trying to sort through the different types of recruiters and recruiting options in a competitive job market and which will perform? Here are the pros and cons of the four top recruiting options: in-house recruiting team, contingent search, retained search and RPOs.

In-house recruiting team

Internal or in-house recruiting teams are comprised of various staff team members whose sole jobs are to identify and assess candidates. These teams know the company’s operations and messaging inside and out and can help identify job candidates who will be valuable contributors to the team. Internal recruiting teams shine in placing contributor, specialist, and lower-level management roles, and may also be a good option to fill mid-level management positions. Limits include the time required to hire and the volume of candidates they work with. Growing companies may also have more roles to fill than an internal recruiting team can manage. In PwC’s 17th annual global CEO survey, only 34% of CEOs stated they were confident that their internal HR departments could capitalize on transformational trends like technological advances and demographic shifts in their industry. These factors may contribute to lower success rates for in-house teams placing executive and highly skilled roles.

Contingent search/contingent recruiter

Contingent recruiters and contingent search firms are third-party recruiters who receive payment for their services only in the event a candidate presented by them is selected for the role. Contingency payments may be a flat fee or calculated as a percentage of the hired candidate’s salary. Contingent search is seen as a low-risk, moderate-reward method of delivering a steady flow of resumes, particularly for mid-level roles within a company. Because contingent recruiters only earn a paycheck when their candidates are hired, contingent firms frequently present a higher number of candidates for review than other types of search firms, although candidates are not as fully vetted. Hiring companies may opt to use multiple contingent firms at once to fill the same role, as cost is not a factor. Limits of using a contingent recruiter include: over-presentation of candidates, use of junior-level placement team members to reduce costs, poor candidate care, and an unfamiliarity with the hiring company’s culture or needs.

Retained search firm/executive search

Retained search firms are traditionally used to fill highly specialized and/or upper-level, board and executive roles and serve as essential contributors to the hiring team. Starting with the creation of a shortlist based on candidate assessment, successful retained search firms seek candidates whose qualifications go beyond the information on a CV or resume. A retained search firm may also present a smaller number of candidates to clients because each candidate has been thoroughly vetted to ensure qualification and a match in terms of goals, motivation, and culture. Retained search firms may also provide the hiring organization with reports on executive salaries and other essential details about the industry, which have value beyond the current search. The most effective retained search partners are experts and specialists in the industries they serve. The primary drawback of using a retained search firm is the upfront payment or partial payment, which does not guaranty placement. Companies can combat this by focusing on search firms that will redo the search if the placement leaves within the first year (may be listed as a “guarantee”) and that offers verifiable (>90%) success rates.

RPO (recruitment process outsourcing)

RPOs are contracted organizations that provides all recruiting services for a client. An RPO may rely on the client’s tools and processes in order to conduct search and recruitment functions. This outsourced service acts as the internal recruiting department, which means the RPO is paid contractually and consistently, whether placements are needed and/or successful. RPOs charge monthly fees plus transactional fees and are usually used only by large employers with high-volume, ongoing recruiting needs.

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