Retained Executive Search vs. Contingency Placement

Shulman Associates practices retained executive search, which offers clients and candidates far greater support and objective counseling than contingency placement recruiters. Because we work with a fewer number of clients, we conduct an intense search process that seeks to synergistically match client and candidate -- not just submit a resume for a fee like contingency recruiters.

Sometimes companies feel that they can handle an executive search on their own. Of course, no company looks forward to paying a fee to outside consultants when they don't need to. But the stakes can be very high if the wrong person is recruited into a strategic position. The industry rule-of-thumb is this: the wrong person hired into a position costs the company three times his or her annual salary. A person hired for $50,000, therefore, would cost the company $150,000 to sever the relationship and find a replacement. A person with a $150,000 salary would cost the company $450,000 to fix the mistake. Then there's the opportunity cost that comes from lost momentum and lost business. It's hard to put a specific price tag on this from industry to industry, but the impact on the bottom line can be significant.

The questions companies need to ask, therefore, are: When should a company handle a search on its own? When does it make sense to bring in a professional recruiting firm to conduct a search? And how does one select and evaluate an outside executive search firm?

This is such an important series of questions that we wrote an article about this topic for Employment Relations Today, a leading HR publication, for its Spring 2007 issue. To learn more about how to determine the best path for your company to follow, go to our article, “When to use an Executive Search Firm and How to Get the Most Out of the Relationship,”.