The term retainer search firm refers to an organization that is paid an upfront fee by their client to search for a candidate to fill an open position. Retainer search firms are used when a company is looking to fill an executive level position in their organization.
Retainer search firms are paid an upfront fee and will also collect a commission when they successfully place a candidate with their client; which are normally employers looking to fill an open executive level position in their company. In addition to working with individuals looking to change jobs, recruiters will also contact qualified individuals not actively seeking new employment opportunities.
The search assignment is usually exclusive, meaning the company does not hire other firms to provide a similar service. In addition to the upfront payment, recruiters will be paid a commission after they present their slate of candidates and a successful candidate has been identified. The upfront fee ensures recruiters will thoroughly research the requirements of the job opening, and will spend a great deal of time screening out unqualified candidates. Normally, a retained search recruiter will be working on a relatively small number of job openings (less than five) concurrently. Typical commission fees for a successful placement are 25% to 35% of the candidate's first-year base salary.
Clients are usually presented with three to five potential candidates four to eight weeks after a recruiter starts their assignment. Since the recruiter has thoroughly researched the job specifications and pre-screened candidates, there is less work for the hiring manager or the company's human resources representatives.