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I need some feedback from you who have worked on retainers. How do you ask for a retainer? How much do you ask for? What additional fees do you expect when you have made a placement? Thanks!
Let me go over the easy part, first-
Retained Search Fees are generally 33.3% of the annual salary plus bonuses, incentives, etc.;
The Search Fee is divided into thirds and the first third as well as an expense check is issued to the Search Consultant at the commencement of the Search; (The expense check is your approximation of expenses related to the search but does not include advertising, etc. expenses since you will have those billed to the client directly. An expense check covers your administrative costs including travel, meals with candidates, etc.)
The second third is issued by the client after either 30 days or 45 days, your choice. At this time, it is often customary to submit a 'short list' of candidates although I do not.*
The last third is issued upon acceptance by the submitted recruit of an Offer of Employment.
The last third is adjusted to account for the Compensation being either lower or higher than anticipated at the start of the Search.
Any outstanding expenses not covered by the expense check are due and payable at that time.
Some firms offer no Guarantee, others specify the usual 30 or 60 or 90 day Guarantee; again, your choice.
The Retained Search Contract should specify the Search is exclusive- that no other search firms/agencies nor in-house recruiters will be working on the same Search.
If you run an ad [at the expense of the client] you should use your own Contact information, not the client's.
All responses to ads, referrals, solicited or unsolicited inquiries are to be referred to the Search Consultant.
In the event the Retained Search is cancelled by the client, any fees submitted are forfeit and any outstanding expenses are due and payable immediately.
It is my suggestion that if your client terminates the Retained Search within three to five days of the second third of the Search Fee being paid then that second third is owed by the client. This is negotiable and at the least, you can, depending on your relationship with that client, accept a lesser amount if you desire.
The usual contingencies regarding a submitted recruit being hired for a position other than for the Retained Search apply.
The Retained Search is a benefit to the Client’s advantage in that the client need not issue the same ‘Job Order’ repeatedly, hoping one of the many contingency recruiters calling actually does the work and fills the vacancy.
This is because the Retained Search Consultant is committed to completing the Search inasmuch as that person has received a partial payment and is thus ‘honor-bound’ to work the assignment and not drop it in favor of a more attractive search assignment.
Also, of course, this retained arrangement is to the Search Consultant’s advantage as the Client has issued a partial payment in advance, thereby cementing that client to the Search Consultant and since they do not want to pay the Search Fee twice, they will [usually] agree to have this Search an exclusive one with the Search Consultant.
To establish yourself as a Retained Search Consultant it is my suggestion you try this out with an established Client. Pick a search that is urgent in nature and requires an absolute quick fill time line.
Once you have completed a couple/a few Retained searches and have established your credibility in this fashion it becomes easier to garner more Retained Searches based on your track record/client references.
* Submitting a 'short list' of candidates as a contingency to receiving the second third of the Search Fee is not a good idea since it may be there are no such candidates by the time the second third of the Search Fee is due.
This could force you to submit 'a warm body' just to receive the second third of the Search Fee. Better to just leave this off your Retained Search Contract.
If you have any questions about this, Shari, just let me know!
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