Retained Fee

• The majority of recruiters will establish either a contingency or a retained fee structure with their clients. A retained recruiting agreement involves a fee that is established in advance of any recruiting efforts. This predetermined amount is typically paid in full before the search process begins. The salary assigned to the newly hired employee has no bearing on the fee owed with a retained fee agreement. Rather, the recruiter is being paid for their time and efforts as long as the search results in a hire. Contingency fee agreements typically involve billing based on an established percentage of the first year's salary that is negotiated on behalf of the newly hired employee.
  
  

Benefits

• A retained fee agreement benefits the recruiter, the client, and the candidate. Recruiters have the benefit of knowing that the fee is paid in advance, and that no billing issues will occur. The client can budget for the recruiting expenses, as the retained rate is established when the contract is negotiated. Because the fee is not increased if a higher salary is offered, the company will often be more generous in their salary offerings to the candidate.
  
  

Time Frame

• The time that it takes for a search to be completed is often a concern of companies that agree to a retained fee. If a recruiter has various contracts with both contingency and retained fees, it is common for the contingency searches to be ranked at a higher priority due to the competitive nature of recruiting. Companies typically do not offer exclusivity to one recruiter on a contingency fee agreement, so time is of the essence to complete these searches before a competitor does so. Because of this, it is important to make sure the contract clearly outlines the amount of time the recruiter will need to complete the search. Likewise, the retained recruiting agreement should include the time line the company will need to make a decision once applicants are interviewed.
  
  

Job Description and Recruiting Process

• A retained recruiting agreement should always include a detailed description of the position to be filled and the steps the recruiter will take to fill it. All duties, responsibilities, and requirements of the job should be provided in writing so that they can be shared with the candidate before the interview.
  
  

Guarantee

• Most recruiting agreements will include a guarantee. Typically, the contract guarantees that the newly hired employee will remain with the company for a set period of time. In the event either the company or the employee are dissatisfied, a replacement or refund is granted.