All recruiters are not equal. What differentiates them is their business model – how they charge for their services — more than their skill in evaluating and matching talent with a client’s needs.
Contingency recruiters operate something akin to a Realtor – they match a buyer and a seller. Earning a fee is contingent on the close of a transaction. Contingent recruiters do not always have the depth of information about the position or organization. Fees range from 20 to 30 percent of the first-year base salary and are paid by the employer.
Retained recruiters operate more like consultants. The client pays a fee at the start of the search, with the balance paid monthly. They will invest time conducting due diligence of the vital factors – information on the job, performance expectations, and the organization’s culture.
Retained recruiters typically handle the more senior leadership jobs, while contingent recruiters handle lower-level management positions.