During a recent seminar/presentation attended by over 200 participants, I was asked several questions that revealed some remained confused as to when to approach a client with a retained or partial retained proposal.
Commons questions were Who raises the subject? When is it brought up? By whom? How?
Retained or partial engaged is not going to work in every situation, but it can set the stage for a more equitable and mutually fair manner to proceed for many manager level searches that are mission critical.
Following are some key clues to look for during a telephone conversation that you should tune into.
The clues and indicators can be subtle and you have to pay attention, be astute, and quick thinking. When two or three of these “indicators” come up during the first few minutes of a telephone call I make a point to not even mention contingency search and instead shift into explaining how our retained search options work.
RETAINED SEARCH CLUES
- The client has called you. (Instead of you calling them)
- The tone of voice has a sense of urgency and seriousness.
- There’s a definite time frame this position must be filled within with an ideal target date and absolute latest deadline. Time frame is realistic and usually within 45 to 160 days out depending on level and industry niche.
- The level of the official calling you is very high up in the chain of command (COO, CFO, CEO, Chairperson,) and there are few if any layers of management above your contact except for the board (or better yet – a board member herself).
- The subject of confidentiality comes up. Either because a) someone is about to get terminated or b) someone is about to resign/retire leaving a critical vacuum in management.
- You are the first search consultant they called.
- If you’re not the first search consultant, you find out something fell apart with their previous recruiter and they are seeking a fresh search firm/fresh approach to forge a new relationship.
- HR never came into the picture and the situation is so critical they will only be involved at the absolute latest phase of the project
Any combination of 3 or more of the above situations and circumstances should translate to “Bingo”. If the company is calling me, avoiding my competition, for a high level search that is to be handled discreetly, this has all the making of a project that should not be approached or dealt with on a contingency basis.
I move right into explaining our retained search options and give the client some choices from that limited group only:
- Full retainer, (we’ll bill you 1/3 of the agreed, estimated fee with the 2nd third payable on delivery of our slate of semi-finalists and final 1/3 payable when the offer is accepted or at some agreed final date (say 120 days out should the hire get placed on hold for some reason)
- Partial Retainer – Pay a little more total fee, but we’ll discount the upfront portion to a set amount ($5,000, $8,000, etc.). Balance minus the upfront paid will amount to the set percentage (25% or 22.5% etc.) when hire takes place or no later than an agreed final date
- Engaged – Blend of contingency and retained. Set amount up front (non-refundable). The balance paid on hire only. If no hire takes place the search firm looses its 2nd payment but client also looses its upfront engagement fee.
I then have contracts as well as email intro templates on each of these scenarios ready to shoot out based on what we have verbally agreed upon.
I should mention, even under these dire circumstances where the company must hire, they always go through “second guessing” after hanging up the phone and verbally indicating acceptance on one of the above approaches.
That’s why 2-3 days later I also send the samples of “Search Reports©” IRES has actually provided other retained clients so that the client can see in addition to the guarantees, fee, and other working conditions, they also stand to get a record of accountability not offered by any search firm under a contingency basis.
The content of my reports, which have been shared with some attending by webinars and seminars, go far to strike emotional chords with the managers as they often see many industry names familiar to them and suddenly realize the competitive intelligence collected, is worth the retainer even if no hire takes place.
Once I send those sample reports out along with other material I usually get a call agreeing to forward the check.
One telephone conversation alone will never suffice. It takes supporting documentation and evidence of previous successful search projects fulfilled to push a decision maker over the edge.