27 July 2020 | by Louise ArcherSubscribe
Most recruitment agencies are finding that the contingent model is a struggle. It is frustrating and demotivating when fees fall out, consultants can feel ‘used’ by clients, and it is challenging to scale a business when revenue forecasts are so unpredictable.
I have found that most companies with a permanent recruitment service would like to be operating on a retained basis but need to develop retained search skills.
Why focus on retained search?
The main reason is often to provide forecastable revenue to investors. Developing retained search skills can lead to higher fee levels, access to more senior hires, and the opportunity to widen market share by developing sales of other consultancy services.
Aside from these quantifiable benefits, working on retained assignments has several other benefits too:
- There is considerable improvement in productivity, increasing consultant motivation and retention.
- The up-skilling and re-education of consultants enables the formation of much deeper and meaningful relationships with clients.
- Clients see a benefit too. Their service levels improve dramatically, along with the time and money they need to spend on recruitment reduces.
- Even the candidate benefits from a structured process. They no longer have to chase the recruiter for feedback, or wonder what is going on.
How can you sell retained search?
Fortunately, there is a simple, step by step way to teach contingent recruiters how to sell and deliver retained search.
It doesn’t matter what market you are working in tech; finance, legal, engineering, healthcare, or what salary levels you are working at.
It doesn’t matter what level you are operating at, it could be £40k or £400k.
In recent years I developed the retained search function for one of the world’s biggest recruitment companies – where there was little to no retained search skills or experience. They now turn over more than $8 million in retained revenue globally.
One of the teams I trained, went from no retained revenue to over half a million in 5 months.
Another, immediately after the initial training went on to win their first retained assignment of a $500k basic salary hire, a fee of just over $90,000.
Another client has benefited from a consistent increase of 18% of their £3.5m revenues, all of which is retained business, where previously they had no retained experience at all.
Make retained sustainable
Once you and your team have developed the capability to sell and deliver retained search assignments, you can then go on to develop a retained or executive search division, transition your contingent clients to retained and sell other strategic services like talent pipelining and insight studies.
Usually, companies I work with, have communicated the desire to gain retained search skills and gained support internally. They have encouraged the use of retained pricing models and often provided training on how to sell retainers.
But they still haven’t managed to transition their client relationships to retained.
BUT WHY NOT?
In my experience, the main reason for this is that there is a barrier. A lack of experience and knowledge generates a lack of confidence, causing negative mentality and perception.
I’ve found most recruiters either:
- have won a retainer and struggled to deliver it, or they know someone else who has
- they have won a retainer but delivered the same as they would contingently, so it felt like a fluke
- think retained search is only for senior/executive positions
- don’t know what it is, or think it’s no different from a contingent service
The thing is, as we know if a salesperson isn’t completely bought into the product themselves, they find it very difficult to sell.
So that’s why we first need to clarify what retained search is.
What is Retained Search. Is it really any different?