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Contingency and Retained Fee Structures

 |  By: Debbie Elliott, CPA , Executive Recruiter, Accounting & Finance

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A contingency recruiting engagement does not cost a company anything unless the recruiter is successful in finding the employee hired. The fee is typically based upon guaranteed compensation for the employee in their first full year of employment and can range from 20-30% of the employee’s compensation.

Contingency contracts may or may not be exclusive. It is typically most productive to give a contingent firm exclusivity for a period of time so they can be deliberate and effective in the engagement. Coordinating the efforts of multiple recruiting firms can be frustrating to the hiring manager.

It is important to communicate openly and timely with your selected firm. Recruiting firms have to focus their resources as well and under contingent arrangements will want to prioritize searches where they believe there is a high likelihood of success.

Retained search engagements can be advantageous in certain circumstances. The fee range is very similar to a contingency fee of 20-30% but a portion of the fee is paid upfront. The percentage of the fee paid up front can vary, but it helps ensure that the priorities and goals of both parties are aligned.

Retained search engagements are typically exclusive thus it is critical to ensure the firm is qualified to conduct your search. References can be very helpful in this regard.

LBMC’s search methodology separates us from others in contingency search and ensures you receive the focused insight and dedicated commitment to hiring success that you and your business deserve.

We recruit the RIGHT talent that make good businesses BETTER. Our affiliation with Tennessee’s largest professional services firm provides access to a vast network of highly qualified candidates. Our tenure and work experience in the disciplines we recruit allow us to listen to your needs and bring valued market knowledge. This combination enables us to recruit, qualify and make better matches for both our clients and candidates.

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Posted in: For Employers