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Recruitment Option 3: The Blended "Con-Tainer" Arrangement

One of the newest trends in the contingency search world lies in the creation of a hybrid fee arrangement known affectionately as a ''con-tainer because it attempts to blend the best of both contingency and retained services. This came about after the ''Great Recession'' of the early 1990s when contingency recruiters noticed that companies were paying retainers to headhunters for lower-paying positions than usual (in the $50,000 to $60,000 range). Clients apparently liked the dedicated attention afforded them by their retained recruiters, so rather than enlist contingency recruiters once the market picked up, they simply maintained the relationships established with their headhunters—even for lower-paying positions.

Well, if contingency recruiters handled $50,000 to $100,000 searches (as always), and headhunters now began handling similar-paying searches on retainer, then why not, reasoned the contingency folks, offer clients the option of paying partial retainers? This way the client gets the dedicated attention that retained firms offer, but the company is not obligated to pay the entire fee unless the assignment is filled. (Ah, isn't capitalism great?!)

To further sweeten the deal, contingency recruiters often make the aggregate ''con-tainer'' payment cheaper than the traditional contingency arrangement. Here's how it works: Let's go back to our $75,000 semiconductor sales engineer candidate again.

Traditional Contingency Fee Arrangement

At 33 percent contingency, the fee equals $24,750:

$75,000 base salary

x 33 percent fee arrangement

$24,750 fee for hire

Sample "Con-tainer" Fee Arrangement $75,000 base salary

x 18 percent negotiated fee arrangement (not 33 percent) $13,500

+ $5,000 nonrefundable fee retained up front $18,500 fee for hire

That's $6,250 less than a strict contingency arrangement!

Why would contingency search firms offer that? First, to win the business away from retained search firms. And second, to keep you working with them exclusively. (After all, you're not going to list that search with other contingency recruiters if you've already invested $5,000 of your money with one firm, right?) It's a viable attempt on the contingency recruiter's part to offer a creative alternative to the traditional search arrangement. Put a pencil to paper and see whether this option could save you valuable recruitment dollars as well.

Recruitment Option 4: Research Firms

As another alternative to traditional contingency or retained recruitment, research firms package their services into hourly paid increments. For example, you might enlist a research firm only to research and identify prospective candidates. The fee would then be based on the number of hours necessary to generate the candidate list. You, the client, could also pay extra for the research firm to approach, qualify, interview, and reference-check those candidates.

In essence, the firm ''unbundles'' the search process into its component parts, thereby providing you with significant cost-control measures by allowing you to bring in house parts of an activity that formerly had to be totally outsourced. As such, research organizations are a logical and necessary component in today s environment of cost reductions and expense controls.

Recruitment Option 5: Outplacement Firms' Job Development Departments

Outplacement firms are paid by companies that are downsizing to assist displaced workers in finding jobs. When companies demonstrate concern for hastened reemployment of laid-off workers, they foster a sense that people are well taken care of, and that automatically minimizes the traumatic impact on remaining employees. As far as the company is concerned, the cost of outplacement (typically 15 percent of the displaced worker s base salary) is far outweighed by the altruistic and practical benefits that allow it to continue its business operations without undue interruption.

It is in the outplacement firm' s best interests to get their candidates placed as quickly as possible. That' s because it costs outplacement firms lots of money to provide services for displaced executives, such as telephone and fax access, word processing support for cover letters and resumes, secretarial support, and the like. It s estimated that if a candidate remains on the outplacement firm' s books for more than six months, the outplacement firm loses money on that transaction. (That up-front 15 percent fee gets more than consumed once the individual has used up more than six months of services).

Therefore, outplacement firms employ job developers to help their candidates find work. Those job developers are constantly soliciting job openings from other companies and encouraging their candidates to seize the opportunities available. Remember that because the outplacement firm is paid by the candidate s old company, not by you (the potential new employer), this free supply of talent could significantly reduce your cost per hire. If you re unsure of this source because you feel that the candidates from outplacement firms are the ones who ''couldn't make the cut,'' don' t be! Companies have downsized entire divisions in this era of mergers, acquisitions, and divestitures, and many of the candidates now in outplacement s care were being placed by retained search firms five years ago. Outplacement firms are an incredible source of free, highly qualified candidates, and it would be an absolute mistake not to list your openings with them.

Following are the three largest outplacement firms in the nation. Their job banks are national, so listing a job opening will give you vast exposure. Also, if you want to keep the identity of your company confidential or if you want only those resumes that meet certain criteria, the job developers will do all that and more for you. Take advantage of this free and effective service immediately by faxing, mailing, or e-mailing your job openings to the following job banks:

Right Management

Corporate Headquarters

1818 Market Street, 33rd Floor

Philadelphia, PA 19103-3614

Create your account online at right.com.

Drake Beam Morin Corporate Headquarters

750 Third Avenue, 28th Floor New York, NY 10017

(212) 692-7700

Create your account online at dbmcareerservices.com.

Lee Hecht Harrison Corporate Headquarters 50 Tice Boulevard Woodcliff Lake, NJ 07677

(800) 611-4544

Resume Reserve and Lead Link are available at lhh.com.

 
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