Our Unique Performance-Based Retained Search Logic

We offer our clients a logical, performance based approach to search that takes into account the time value of money and the unique nature of each search.

There are no widely accepted guidelines to help determine when it might be best to engage a search on a purely contingent basis, a purely retained basis, or some combination thereof. But we have developed a rational approach for making these decisions, by applying a consistent framework in evaluating the potential options.

For example, a traditional fully retained search -- wherein a company pays the full retainer (estimated fee) within 60 days of search initiation -- should -- by definition -- warrant the most attractive fee terms, i.e. the lowest possible search fee, and be completed in the shortest period of time possible. Why? Because the company has assumed virtually 100% of the risk up front, and the search firm is being compensated fully to focus on that search.

Likewise, a traditional fully contingent search -- wherein a company pays nothing unless, and until, a candidate is hired, should warrant the least attractive terms, i.e. the search firm's highest fee, with the expectation that the search is not time sensitive. Again, why? Because the search firm is wearing 100% of the risk of conducting the search, with no guarantee of any payment, regardless of the quality of the candidate presented.

Historically, search firm fee terms have tended to reflect just the opposite. For whatever reason, retained searches commanded the premium fees, whereas contingent search firms have been conditioned to accept smaller fees. Retained searches usually have a "replacement" guarantee, whereas contingent searches typically require a refund guarantee. Despite receiving substantial payment in advance, retained searches are often lengthy endeavors, even thought the firm has been well compensated -- presumably to ensure the firm dedicates significant resources to the search.

We believe that the fee terms and services should reflect the degree of risk worn by both the search firm and the company. The more a hiring company is willing to invest up front, the greater the service, and the lower the fee they should reasonably expect. Likewise, the less a search firm is paid up front, the lower the hiring company's expectations should be in terms of the speed with which qualified candidates are introduced. Guarantee wise, there should be no guarantee associated with contingent searches, because the search firm has already borne all the risk of conducting the search with no guarantee of payment. Only retained searches should have guarantee provisions, and these should be commensurate with the degree of risk worn by the client and the search firm.

We partner with our clients to evaluate the requirements for each search through the same lens e.g. value of the desired skill set to organization, extent of the need (one time versus ongoing requirements), the overall demand for that skill set internally and in the market, and actual availability of talent in the market.

For this reason, we do not have a "standard" search agreement or fee structure. We analyze each organization's specific needs, translate their unique considerations into a proposed approach, and then tailor the proposed funding for that approach. This customized approach requires more time and effort on our part up front, but the result usually makes the most sense for all parties.

For example, by prioritizing the relative importance of different criteria, e.g. rapid completion versus comprehensive survey of the market versus in depth assessment versus overall cost of the search, we can incorporate specific performance-based incentives into the approach.

Because we choose to work with fewer clients on more assignments, We are able to do invest a significant amount of time and effort -- at the outset -- to work with our clients in identifying the target companies and in determining the often subtle, but differentiating candidate criteria.

We tailor our approach carefully: not all companies are equally attractive; not all positions involve the same degree of difficulty.

We work with each client to develop a unique project plan with key milestones, and clearly defined -- mutual -- accountabilities, with some fee payments linked to achievement of specific performance objectives.

Since fees are earned and paid based on the accomplishment of key milestones throughout the recruiting process, we partner with our clients in sharing both the risks and rewards of identifying, attracting and keeping talent.

The candidate guarantee and representation period is similarly customized to reflect both the experience level and compensation of the successful candidate, and to reward timely payments.

Because we work closely with our clients to tailor a unique strategy -- and process -- for every search, our process reflects the relative priorities of speed, quality and cost, which inevitably vary based on each position.

This partnership approach allows us to collaborate with our clients in achieving superior results – even in rapidly changing market conditions.

We specialize in performance-base retained executive searches in underserved segments of the market, e.g. base salaries ranging from the high nineties to low hundreds, with total compensation ranging from low hundreds to well into six figures.

Searches at this level tend to be of little interest to very large search firms, because they are as difficult, if not more so than higher level positions -- hence the minimum fee requirement.

Because such searches -- below the VP and C Level -- require the same level of retained service, depth of research and extent of confidentiality to successfully execute. This level of operational excellence -- and the ability to dedicate full time resources -- is often beyond the reach of most contingency firms.