How to Use a Contingency Search Firm: By Job Transitions, Inc.

Search Firms and other placement agencies generally specialize in specific industries and charge a fee to their client companies. Common industries represented by search firms are accounting/finance, sales, engineering, healthcare, information systems, administrative management, and clerical. Companies using search firms always pay the fee. The fees can range from 15 to 30% or more of the candidate's starting salary. You should never use a so-called "search firm” that charges a fee to the job seeker. There are two types of search firms:

1. Contingency - They are paid only upon placement of their candidate with their client company. One company can use multiple search firms under a contingency basis.

2. Retained - They are paid a fee up front to work exclusively on the job their client company is recruiting for. No other search firm can work with them until the retainer expires.

Although there are many similarities between the two, this article is referring to the more common contingency search.

It is critical to remember when using a search firm that even though the hiring company pays the search firm’s fee, the search firm does not actually work for that company. The search firm does not work for the candidate either. They work for themselves! They might utilize very high-power sales techniques to help generate offers from the company and close the candidate on the job. Job seekers must evaluate the entire interview process and make their own decision on whether or not to accept a job offer. Don’t get sold into the job by a search firm.

Search firms may not be much help in trying to change functional positions or execute a career transition. The client company is going to pay a large fee to the search firm upon placement. What is the client company paying this large fee for? They pay a large fee to the search firm to find them the "perfect candidate" for the position. The company may be willing to pay a large fee to the search firm for the "perfect candidate" because it’s extremely difficult and expensive for the company to recruit and hire this so called "perfect candidate" themselves.

The company might not feel it is necessary to pay a large fee to a search firm in order to recruit a candidate trying to accomplish a career transition. They can usually recruit these candidates in other less expensive ways. Search firms will usually be of greater assistance to candidates conducting a more traditional job search (basically the same job, or the next level up, but in the same functional area and industry.)

You must be marketable to the search firm. Being marketable to the search firm really has little to do with your years of experience as long as it is in their area of specialization. Marketability to a search firm depends on two things:

1. How "hot" you are in the market.

2. Your direction.

Candidates are often disappointed because they never hear back from a search firm after they have contacted them. In these cases, one of two things probably happened:

1. The search firm had the impression that the candidate was "testing the waters” - not sincerely interested in actually accepting a new job offer.

2. The search firm felt the candidate requested a "mission impossible" – the job seeker came across as wanting too many things in order to take a new job.

If you give the search firm the message that you are "testing the waters" you will probably never hear back from them. They do not get paid for helping you get your feet wet!

Now, put yourself in their position. You are working with ten candidates and five of them convinced you that they are "hot on the market." The other five came across as if they just wanted to see what the market was like and are not that interested in changing jobs just yet. You are paid a commission upon placement. Who would you spend your time on? Obviously the five who are seriously considering a change.

Some candidates will communicate to the search firm a list of ten or fifteen conditions that a company will need to offer to consider a change. The search firm might consider this a "mission impossible." It is too difficult and time consuming to identify a company that will give you all of that. They will spend their time working with the candidates that will be easier to place. That’s how they make their money.

So, how should you communicate with a search firm?

Respond to a search firm with something like this:

"Obviously I am not going to accept any job offer, but if you show me an opportunity which gets me involved in (list three or four items that you really are looking for) there is a good chance that I would accept an appropriate job offer from that company."

Giving the search firm a statement like that shows them that you are ready to accept an appropriate job offer. In addition, it shows them that you are reasonable in what you expect them to show you with regard to career opportunities. Now, you are marketable to the search firm.

Identify two or three search firms that specialize in your area of interest. We do not recommend working with multiple search firms at any one time. This is true especially if your search is specific to any one city. Search firms call some of the same companies in order to produce client companies if working on a contingency basis. If two or more search firms present you to the same company for the same position (it can happen) the company might not even interview you because the search firms will fight over who gets the fee. With the fees being so high, neither search firm will give up very easily. In these situations, the company might simply decide not to interview the candidate. However, we do recommend that you utilize more than one search firm in order to assure maximum exposure. Two or three is a good number to begin with.

Do not continue to use a search firm if they are not producing. Generally, if a search firm is going to actively work with you, they will do so fairly quickly. You are a placement waiting to happen!

Benchmark the search firms. Give your initial search firms about three weeks to help you acquire interviews. After this three week period review their effectiveness. If you like the way one of the search firms is working with you, continue to work with them. Perhaps they secured an interview for you. Maybe you are just happy with the way they are following-up with you.

If you are not happy with one or more of the search firms, "mentally fire" them. Do not call them and tell them not to work with you, as there is always a chance they might secure an interview for you later. However, the chance of this happening decreases as time passes. If this is the case, just contact another search firm to take their place. As you can see, this will be an on-going process. You might end up contacting four or five search firms during the course of your search, but you are actively working with only two or three at any one time.

If you are conducting an aggressive job search, do not rely on search firms to conduct your entire search. Search firms should be just one part of the process. Continue to network, as many think this is the best way and YES respond to appropriate job postings. One of the biggest misconceptions in a job search is that people never get their job off a posting. That is totally not true. Even if it does not seem that way at times, people get interviews off job postings all the time.