The Truth about Headhunters

The differences between "retained" and "contingency" recruiters, while important for those seeking finance jobs to understand, are far from black and white.

“The retained process is more rigorous,” said Barry Bregman, financial services partner at New York-based CTPartners, a major nationwide executive search firm that does retained searches. “That’s really what the client is paying for: greater rigor, due diligence, review, and analysis of the market and the individuals in it.”

Not necessarily so, according to Don Patrick, owner of the Norcross, Ga., franchise of international search firm Sanford Rose Associates, who does both contingency and retained searches. “What I do on contingency is not really any different from retained,” he told “It’s just depends on which pricing model the client prefers.”

Retained searches appear to be more rigorous because they are slower, Patrick suggested, because the hiring managers for high-level positions are usually top executives such as chairmen and CEOs. “When you’re dealing with senior management, you’re often dealing with egos and power plays,” he said. “That slows things down.”

What Sticks

Related to the topic of thoroughness of search is perhaps the biggest bone of contention, which involves, well, spaghetti. As in: many contingency firms “just throw a lot of spaghetti at the wall to see what sticks,” Lorraine Hack, a partner in the financial-officer practice at Heidrick & Struggles, told in January.

The implication is that instead of doing a disciplined search for the right person to fill a job, such firms flood their clients with choices, delivering as many candidates as they can find who could possibly be a fit, as well as sending a résumé to many different potential employers. “From a candidate’s perspective, there’s a trade-off between your résumé being distributed on a controlled basis vs. a high-volume basis,” said Bregman.

Both Patrick and Gimbel agreed that that happens, but said only disreputable firms do it. “I can’t speak for anybody else,” Patrick said, “but if you send a résumé to me, it never sees the light of day” unless the candidate grants permission. He added that the idea of contingency recruiting firms providing clients with candidates who are ill-suited to job openings is illogical: “When a client calls and says ‘Don, I need this,’ I find exactly that. Otherwise, I won’t get paid, and they won’t call back.”

In fact, according to Gimbel, an aggressive job hunter — one who wants his or her résumé to be widely distributed — has more to gain by calling a contingency firm than a retained firm. “With most retained firms, if they don’t find you, they don’t find much value in you, because they’re just working on the searches they have going at that moment,” he said. “Contingency firms can be more aggressive in looking for you because they can get paid by anybody with a job opening.” This, though, will be less effective when seeking a high-level position such as CFO, because few of those are available and most are placed with retained firms on an exclusive basis.

Back and Forth

If contingency firms have a defense reflex, it’s understandable. Dowd told, “One of the things you learn to do in the retained community from a marketing standpoint is look down your nose at the theoretically dirty world of contingency recruiting. What we do is on par with a Booz Allen or a McKinsey or a Deloitte.” He added, more gently, that “actually, both are professional services. One is not dirty, it’s just different.”

But Patrick acknowledged that some contingency recruiters might fit the “dirty world” view. While most are very professional, he said, including some who work out of their homes, “there are also some who are just out there trolling the Internet for companies that are hiring, and trying to find a place for a hot candidate so they can make a fee,” he said. “That’s unfortunately the image that contingency has.”

Some contingency recruiters, such as Paul Salim of Workway, take it personally. With a “small majority” of retained firms, he said, there’s “a bit of arrogance. They think they’ve achieved this excellence that contingent recruiters haven’t, which I feel is not the case.”


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