Most recruiters continue to work purely on a contingency basis. But whilst contingency is always the easy option to try and sell, what’s really in it for you as the recruiter? Pitching for a recruitment retainer isn’t half as scary as you might think, and taking the plunge will certainly pay off!
Every time you recruit for a role on a contingency basis, you’re working for free. It’s a no win, no fee basis, meaning you’ve not committed to the client and the client hasn’t committed to you either. With contingency, it’s a race to find the first suitable candidate against numerous other recruiters doing exactly the same thing - so no wonder the quality or depth of screening can be dubious in these circumstances.
But we're better than this!
The benefits of retained over contingency recruitment
The benefits of retained over contingency recruitment are numerous for recruiters; the biggest and most obvious perk is up-front payment, so you’re getting closer to your billings targets before you’ve even made any placements. Working on a retained basis also means you can dedicate the time required to research and properly access the potential candidates for your client. This approach is likely to have an impact on your interview-to-hire success rates; knowing your client and their needs well means you’ll have better insight into the type of candidates they want.
So, why aren’t more of us working to increase the number of retainers we’re working on? Is it fear of rejection, or just not knowing how to approach the idea with clients? No matter the reason, read on for our top tips on how to win more retainers in recruitment.
How to win more recruitment retainers
Pitch the need for a retainer over contingency
If your client has sent over a job spec that looks like it’s going to be tough to fill, make the first move and pitch the need for a retainer. The majority of clients will be used to working with recruiters as and when they need talent, so it’s up to you to build the case for change.
Awkward role requirements, such as an isolated location or purple squirrel skill sets, mean you’re going to have to invest a lot of your time to finding the right candidate. Explain or demonstrate the scope of the issues involved to help your client understand just how few candidates are going to be available that fit their specific requirements.
If appropriate, you could also emphasise how many other companies are looking for the same skill sets, which will make the job of finding that perfect candidate that bit more challenging. This should help them understand that it’s going to be a hard role to fill and therefore, if you’re going to be able to do a good job for them, you’ll need to allocate a lot of time to this search.
To strengthen your case, first explain the benefits of being transparent with your recruitment campaign - if you have exclusivity on the role and are able to brand your job ads with the client's name, you'll get a much better response (and here's why).
You can also reference customers that you’ve worked for in similar situations or on similar roles who can vouch for your great work and reassure your client that you can fill these types of roles – show them you’re an expert!
Lastly, have your recruitment process well mapped out and talk them through how you plan to deliver a trying shortlist of candidates for them to review, and provide a realistic time expectation in being able to achieve this. Nail these points in your pitch, and your retainer will be in the bag!
Be bold and ask!
After following the above – and assuming you’re confident that you’ll be able to work in partnership with your client (you’re both on the same page and expectations seem realistic!) – you should feel in a position where you’re confident enough to take the plunge and ask your client for a retainer.
It’s amazing that still so few recruiters will be confident enough to do this, and continue to stick with working on a contingency basis – even if this involves working for free!
Believe it or not, many clients would actually prefer to work with one trusted advisor rather than lots of recruiters firing CVs at them at the same time. In practice, retainers involve less hassle for the client: they spend less time taking calls from multiple agencies and have a fraction of the amount of CVs to sift through if they’re only dealing with one agency.
Asking for a retainer is the first step, but making it an attractive option for your client is another! Which takes us to our next point…
Offer to share the risk
Risk, and the resulting cost of a risk not paying off, is an obvious stumbling block for clients. Offering to share the risk will immediately make the retainer more attractive to a client and instantly increase their confidence in you to do the job.
Staggering your payments and asking that each payment is made only when key milestones are reached is a great way to do this. Most retainers are split into three parts: Taking the job on, providing your client with the shortlist and the candidate start date. However, splitting your payments further into even more parts will be appealing to your clients and serve to set you apart from your competitors.
You could ask for a payment to be made around any of the following stages:
- Once the contract has been signed
- Once you’ve produced a candidate shortlist
- When the candidate has accepted the job offer
- On the candidate start date
- After one month of candidate working as an employee
- After the candidate has completed their second month as an employee
- After the employee passes a three-month probationary period.
This creativity not only splits the fee for your customer, but it provides a steadier flow of cash into the business and gives you a healthy boost towards your targets each month. It’s a great way to demonstrate shared risk, allowing you to build trust with your client whilst avoiding a situation where you’re having to lower your rates to secure the deal (you’ll be working hard on this role, after all!).
The one thing that’s preventing recruiters from securing retainers is that they're simply not asking for them often enough! Remember that pitching for retained business isn’t exclusive for those executive level roles – any recruiter can significantly increase their billing potential just by taking the plunge and asking for a retainer when pitching for a role.