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HR A SUPPLEMENT OF THE ZWEIG LETTER
O P I N I O N
Contingency vs. retained recruiting Industry Veteran Mark Zweig uses 3 decades of experience to offer insights on one of the hottest topics for AEC leaders looking to grow their firms effectively.
I recently returned from a Principals Academy event in Seattle, where one of the main topics discussed among firm leaders was the use of and fundamental differences between contingency and retained recruitment searches. It seemed that no one in the room really understood how these services break down nor the pros and cons of using either. I tracked down Mark Zweig and interviewed him on the subject.
Randy Wilburn
work for somebody for pure commission or $300 a week with a draw against commission. The sense of ethics is a lot different, too. A lot of contingency recruiters will do anything to make a fee. Contingency recruiting is like a probability game: I throw so many balls of mud against the barn wall and hope that one will stick. They have terms for the ones that do. One of them is MPC – “most placeable candidate.” Then recruiters call or email companies trying to get this candidate interviews. It wouldn’t be uncommon for a candidate – let’s say it’s a mechanical engineer with a background in HVAC design – to be sent out to 200, 300, 400, even 4,000 companies via email, fax, or phone call. So, even if you eventually hired this individual, one of my big problems with the contingency model is that person has been sent out to so many other companies that the odds are high they’re go- ing to continue to get inquiries for interviews and job offers after they accept your job, which means that they don’t stay on the job a long time. That’s another big issue. The candidates placed by contingency firms typically don’t last as long on the job. Many times, they are unhappy or they’re actually looking for a job as opposed to the candi- date found by a retained recruitment firm, which is going out into the market and contacting people who aren’t looking for a job to see whether they’re “My No. 1 piece of advice is stop thinking about recruiting as a way to keep bad people out and start thinking about it as a sales process where you’ve got to get good people in.”
Contingency recruiters or “head hunters,” which is not a very PC term, have been around for decades. AEC firms have used them to varying degrees with various amounts of success and some epic failures. Retained recruitment is a more nuanced version of recruiting that can pay off in the short- and long- term, if done correctly. I was introduced to the retained-recruitment model by Mark more than 17 years ago. Mark has been around the block a few times in this industry, and he’s seen it all. Randy Wilburn: Mark, we’ve talked over the years about the idea of contingency recruiting versus retained recruitment. Can you explain why you feel that contingency recruiting is not a good method to utilize in our industry? Mark Zweig: I started out as a recruiter after I got my MBA and got into this business in 1980. I worked for an executive search firm in St. Louis that was a retained-recruitment firm. I really got my schooling there. There’s just so many differ- ences. Let’s just go over some of the key ones. First off, the quality of people that work in a con- tingency firm is completely different from the quality of people you’ll find in a firm that’s doing recruiting on a retained basis. You hate to gener- alize, and certainly there are some good people that work in contingency firms, but, traditionally, that side of the recruitment business has about a 350 percent turnover rate, so, those organiza- tions have continuous turnover. They typically pay a very low pay rate, usually a draw against commission of $300 a week, or something of that nature. And, it’s basically a pure commission job. Most people just don’t want to work in that en- vironment. If you’re somebody that has a college education or a master’s degree or you have some experience in the business world and you’re used to making a certain living, you’re not going to
See RANDY WILBURN , page 10
THE ZWEIG LETTER AUGUST 31, 2015, ISSUE 1118
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