When you’re hiring a CFO, VP Finance, Director of Finance or another senior accounting leader, you may assume the search needs to be retained.
But does the seniority of the position automatically determine how you should structure the search?
Retained and contingent search are different engagement models. Either can involve a targeted search, proactive outreach, passive candidates, careful assessment and an experienced recruiter who understands the market.
The important question isn’t whether the position is senior enough to warrant retained search. It’s what your organization needs from the search and who is best equipped to deliver it.
Seniority May Change the Search, Not Necessarily the Search Model
There is no question that recruiting a senior financial leader can be different from filling a more junior accounting position.
The candidate pool may be smaller. Confidentiality may be more important. More stakeholders may be involved in the decision. Leadership capabilities, organizational fit and long-term potential may carry greater weight. The recruiter may need to spend considerably more time identifying and approaching people who aren’t actively looking for another opportunity.
All of those factors can make the search more complex.
But complexity doesn’t necessarily mean the search needs to be retained.
A specialized recruiter with the right expertise, network and recruiting capabilities can conduct a thorough senior-level search on a contingent basis.
What Is the Difference Between Retained and Contingent Search?
Retained and contingent search differ in how the engagement is structured, how the recruiter is paid and, often, how the relationship between the employer and recruitment firm is defined.
With a retained search, an employer typically engages one recruitment firm exclusively and commits to paying fees at agreed stages throughout the assignment. Depending on the agreement, fees may be payable even if the search does not ultimately result in a successful hire.
Retained engagements may also include defined research, reporting, assessment or stakeholder processes, particularly for complex executive appointments. The employer and recruiter make a mutual commitment to the search from the outset.
With a contingent search, no recruitment fee is paid unless the search results in a successful placement. Contingent arrangements may or may not be exclusive, depending on the recruiter and the agreement.
The recruiter is investing time and resources in the search with their compensation tied to a successful outcome.
These are meaningful differences, but they don’t mean retained search is inherently more thorough or professional. Nor does contingent search have to mean advertising a position and presenting available applicants.
A contingent search can still be targeted, proactive, methodical and comprehensive.
What Are You Getting for the Fee?
This is where employers should look beyond the search model itself.
If you are considering a retained arrangement for a senior accounting or finance position, ask what capabilities the recruiter will bring to the search.
Do they have:
- Expertise recruiting within accounting and finance?
- An established network in the market where you’re hiring?
- Relationships with senior professionals who aren’t actively job searching?
- The ability to proactively identify and approach potential candidates?
- The experience to assess technical expertise and leadership capabilities?
- Current knowledge of compensation and candidate expectations?
- The ability to advise you when your requirements don’t align with the available talent market?
These capabilities aren’t created by the engagement model. They come from the experience, specialization and relationships of the recruiter conducting your search.
There is an important difference between engaging someone to recruit for a position and working with a talent advisor who understands the market and develops long-term relationships with employers and candidates.
For a senior hire, the expertise behind the search may matter considerably more than whether the engagement is retained or contingent.
Do You Need a Retained Search to Reach Passive Candidates?
One reason employers may associate senior recruitment with retained search is the need to proactively identify candidates rather than simply advertise the position and wait for applications.
But passive recruiting isn’t exclusive to retained search.
Specialized recruiters spend years developing relationships with professionals in their market. They meet people throughout different stages of their careers, stay connected as those careers progress and learn what might motivate someone who is successful in their current position to consider something new.
When a senior opportunity arises, those relationships matter.
At Mercer Bradley, our specialized approach to Winnipeg accounting and finance recruitment includes both active and passive candidates. For a senior search, we don’t need to limit ourselves to the people currently applying for jobs.
Whether the search is retained or contingent doesn’t determine access to passive candidates.
The recruiter’s network does.
What Happens If the Search Doesn’t Result in a Hire?
The financial structure is one of the most significant differences for an employer to consider.
Every recruitment search carries some uncertainty. Requirements can change. Candidates can withdraw. Internal circumstances can shift. Occasionally, despite everyone’s efforts, a search doesn’t result in a hire.
With a retained arrangement, the employer may already have paid fees toward the search even if no placement is ultimately made.
With a contingent arrangement, no recruitment fee is paid unless the search results in a successful placement.
That doesn’t mean a retained recruiter has less incentive to succeed. Their reputation and client relationship still depend on delivering results.
It does mean, however, that the financial risk is structured differently.
Under a contingent model, the recruiter’s financial outcome is directly connected to the client’s desired outcome: a successful placement.
For an employer considering how to approach a senior search, that difference is worth understanding before committing to either model.
Why Would a Contingent Recruiter Take on a Difficult Senior Search?
Because contingent recruiters are paid when they make a successful placement, experienced recruiters have an incentive to be selective about the searches they accept.
Before committing significant time and resources, they need to believe the assignment is one they can successfully complete.
Is the compensation appropriate for the role? Are the expectations realistic? Does the talent exist in the market? Can the recruiter reach it? Is the employer prepared to move forward when the right person is identified?
If the answers don’t support a successful search, an experienced contingent recruiter has little incentive to take on the assignment simply to have another open position.
When they do commit, both recruiter and employer are working toward the same outcome.
Does Retained Search Ever Make Sense?
Absolutely.
There may be circumstances where an employer wants the exclusivity, dedicated structure and mutual commitment associated with a retained engagement. Highly confidential appointments, board-led executive searches, complex governance requirements or searches across multiple markets may lend themselves to a retained model.
An organization may also simply prefer that structure for a particular assignment.
The point isn’t that retained search is unnecessary.
It’s that a senior job title, on its own, isn’t necessarily a reason to choose it.
If a specialized contingent recruiter can provide the expertise, network, proactive sourcing, assessment and advisory support your senior search requires, it is worth considering whether a contingent approach could deliver what you need.
Before You Choose a Search Model, Choose the Right Recruiter
When your next senior accounting or finance position becomes available, start with the search itself.
What kind of person do you need? How difficult will they be to find? Where is that talent likely to be? Who already knows that market? Who can reach the people you want to meet? And who has the expertise to determine whether those candidates can succeed in your organization?
Then consider how you want to structure the engagement.
Retained and contingent search can both be effective. The search model alone doesn’t guarantee the quality or success of the search.
Seniority may change the complexity of the assignment, but it doesn’t automatically determine which search model is right for the role.
If you’re hiring a CFO, VP Finance, Director of Finance, Controller or another senior accounting and finance professional in Winnipeg, talk to Mercer Bradley about your search. We’ll help you understand the available talent market and how we can approach finding the right person for your organization.
