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Wishing you a Merry Christmas 2023! Let’s dive in!

Retainer Search

It is a love-hate relationship when it comes to retainer searches.

For the uninitiated, what’s a retainer search?

A retainer search is when the client agrees to pay an upfront fee to the recruiter for starting the search.

Now, who doesn’t love that?

Sounds too good to be true.

No, it’s true but it has its caveats. Let’s unpack it.

What’s Good?

1. The money. Yes, no one wants to work for FREE, no matter how good our intent is. We need to put food on table.

2. Stronger probability of closing the role and in a shorter time.

3. No competition from other recruiters. This doesn’t mean you can go at your own pace.

What’s Risky?

1. Long guarantee period for your placed candidate. While most contingency agencies offer 3 months guarantee for the placed candidate, a retainer offers on average 12 months guarantee. In other words, if the candidate leaves within 12 months, you got to do a FULL refund.

2. Time taken to complete the search may be longer than you bargain for, especially for hard-to-fill roles. Unless you have an “escape” clause in your retainer agreement, you may be trapped in eternity. I will talk about this in the closing.

3. The pressure of providing weekly updates to the client. In most retainer projects, there is this expectation that the right candidate will surface soon, like in a week. While that’s very optimistic, the norm is a drawn out process of providing weekly updates until potential candidates are found. These weekly updates can be very stressful because you have no “competitor”… it’s all on you.

Whether a retainer works for you depends on your personality and business style, I personally do not like retainer because I prefer to be paid when the job is done. That comes with its pain (aka cashflow) as well but to each his/her own, right?

You got to find your style. Some people are geared for retainer, and they thrive on managing projects with long search cycles. Some extended beyond a year because the search is so challenging.

Now, before we end this, I promise to talk about the “escape” clause if you are going into retainer.

This came from my experience of taking over 7 retainer searches after an ex-colleague left the agency. To my horror, he has already billed the upfront fees, received his commission from that, but the final deliverables are on me.

I’m the guy that got to fulfill what he had already been paid for. ☹️ 

Sucker is the word. No, I don’t like that word but the profound impact it had on me was such.

It took me and another colleague an extreme amount of effort before we can “escape” from that 7 retainers. I will skip the gruesome details but here’s the point I wanted to make and it is very important. Write it down.

When you do a retainer, do not put yourself in a indefinite rut by agreeing to close the project only upon hiring the right candidate.

Why do I say so?

Hiring is a complex business and you heard the saying, “It’s not the qualified candidate that gets hired.” This is dangerously true and in many occasions, the right candidate is not the most qualified.

What this translates into is the fact that you may be giving them an endless stream of qualified leads only to have them say “I want to see more CVs.”

When does this end?

If there is no endpoint, you are trapped and that was what I was in at that time.

Say you are agreeable to 5 profiles. Then if they have shortlisted 5 profiles from your 10 CVs, you have completed your share of the deal and entitled to the remaining payment if they hired any of the 5 candidates.

Now, the client may not like this and you have to resolve this with a bit of tact and sound logic.

Hint: Would a drawn out hiring process help the client?

Usually if they can’t make the decision after interviewing a significant number of candidates, it is another issue - “They are not sure what they really want or they are moving the goalpost around. It happens!”

As a retainer consultant, you got to do your magic and prove your worth. Your job is to help them to hire the BEST candidate based on what you have done.

If not, it is endless chase for the rockstar candidate only to conclude as a lose-lose for everyone - both in terms of time and money.

p.s. Follow me on LinkedIn and DM “The Solo Recruiter” if you want to learn how to improve your recruitment performance and earnings.

Joo Kwang
​Author of Solopreneur’s Guide to Recruitment Business

​About this newsletter: You are receiving this email because you subscribed to my weekly TSR (The Solo Recruiter) newsletter. Every week, you learn the strategies that successful recruiters use to grow their businesses. So you can also do the same and launch your business.