ROI of Engaging a Retained Search Recruiter

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There is perception out there that the practice of retaining an Executive Retained Search company is for hiring in C-Suite and mostly by Fortune 100 companies. Most worry about the risk of paying an advance retainer just in case the recruiting company does not deliver. Others feel they lose something if they do an exclusive and don’t have 3-5 recruiters falling over each other to give them volumes of resumes. It is also perceived as relatively more expensive than an in-house effort or contingency option.

I am hoping to mitigate some of these perceptions and explain why, when and what to expect, while leveraging bits and bytes of my experiential wisdom from either side of the hiring table; as a hiring manager for 30+ years; and as a retained recruiter for 10 years, both roles in the specialized Analytics and Data Science niche.

Talent Pool

Let us take an example of someone needing to make a specialized Analytics or Consulting hire at ~$200K+ annual salary. Typically the first thing is to put an ad in the preferred media and wait for responses. The chances are 99% of your responses would come from the Very Active pool of candidates as they are continually active using key words searches on every possible job board. This is optimal if the role is simple and many people are likely to be qualified fits. Similarly when filling large number of mid level positions sometimes speed and quantity is greater priority over quality especially if the position is not critical to the organization. Often though, companies make costly trade-offs on these critical roles to accommodate volume or speed and in return, the quality of candidates tends to suffer.


Senior and Mission Critical Roles

However, when the position is senior and critical to the organization, confidentiality of client and candidates is important, and the brand image must also be managed to get traction with the best talent. But more importantly, when challenging the internal status quo for quantum changes, what is of utmost importance is the “quality of the candidates” and ensuring that the resulting hire is absolutely the ‘right’ fit. And of course, all this must be achieved without sacrificing speed! That is when you are better off with a specialized retained recruiter who has a deep understanding and reach into that optimal candidate pool.

Backroom to Boardroom – Hard and Soft Skills

For those of you who might have read my recent blog on Disruption-The New Normal, the world of data and analytics is changing very rapidly and one impact of “Amazoning” is that we are fighting a talent war in Analytics!

Analytics has slowly but firmly found its rightful place emerging from the backroom to the boardroom. The demand for this current and the next generation of Senior and Executive Analytics Talent has been moving up.With that ‘up and up’ movement comes the need for hiring Analytic Executives with all those additional managerial and organizational skills but, without giving up elements of the nerd power and expertise. These Analytic Executives do have a difficult role in this fast-moving; dynamic and ever changing landscape of big data analytics and data sciences. While management skills are inherent in every leadership position, the complexity of communicating advanced analytic concepts, applications, methodologies and explaining ‘value add’ demands communication skills to socialize emerging Analytic strategies for company wide acceptance.


This translates in to companies needing executives with techno-analytical- strategic-business-cultural-communication…a grand mix of hard and soft skills! Whether the company is traditional or conventional, high on sophistication and adoption curve or in a catch up mode, this hot mix of skills underlines the complexity and need for professional assistance. It is not just about knowing where to go looking for the best talent, but also making sure of industry knowledge and bold technical stripes fit cultural nuances needed for success.

Super Passive and Explorers

Yes, the talent war is heating up for those competitive and hard to find professionals who help convert visions to reality. My own experience confirms that those Super Passive and Explorers prefer to engage with a retained recruiter because they know that the company that retained the recruiter is serious about hiring the best candidate for the role and are willing to invest in finding that ‘Needle in the Haystack’  or if you prefer – the diamond in the mix!


The recruiter’s role is very critical, not just in finding the best candidates but like a ‘reluctant bride’ bringing them to the table, selling the role and the organization. They have to get the potential candidates excited about the opportunity; share the genesis of the role and its future growth potential as all this is important to these discerning candidates. In many cases I find myself in a career counseling session discussing where the industry is going or what might be the next best career move for them and compare it to the opportunity at hand. We have to be honest and transparent and earn their trust while digging deep in their competency pool to make sure we are setting this up for a good long term ‘mutual’ fit.



The math of justifying the incremental cost of hiring a retained recruiter vs Contingency or in-house effort is easy. We can confirm that the client will save a significant amount of time and effort for senior managers and human resources in not having to advertise and screen hundreds of less than qualified candidate resumes. Especially when you contrast this to the fact that a good retained recruiter will present an initial slate of 3-5 highly qualified candidates within 90 days. If the role is well scoped the first slate should have a 75-90% success rate. If the role has some nuances that the company is still fine tuning, then the first slate should be diverse allowing the team to see the options and move towards better defining the role. In such a case it is very likely that the recruiter will present a second slate of 3-5 candidates based on this revised profile that should have a winner. It is an easy calculation of the dollars saved when the senior mangers have to review only 6-10 candidates.

Opportunity Cost

However, I believe time saved from being presented a small pool of excellent candidates is not even the major driver in an ROI calculation. Consider instead the opportunity cost of hiring a wrong someone in a critical role from the 99% pool, for the sake of speed and ease of hunting. S/he may not accomplish maximizing the role’s potential contribution to the bottom line and growth of the company. Even at 1% that would be a significant cost. Alternatively think about the opportunity cost of not having the role filled while pursuing all applicants from the ads stretching over 6-9 months, only to realize that you cannot reach that 1% you really want. This would easily set you back 9-12 months.

Remember to compare this only to the “incremental cost” you would pay in hiring a retained recruiter. While it is easy to put a dollar value on the cost of the internal resources, it is the opportunity cost of the sub-optimal hiring or missing head of the team that is significant and one must not lose sight of.

Trust and Commitment

The engagement between the recruiter, client and candidate is about mutual respect, trust and commitment. The common cause is everyone’s desire to find the best option and commitment to quality vs quantity and speed. As for delivering, we never stop till the job is done! We have been in this business for 35+years. Trust us to be your preferred retained partners.Contact  Smith Hanley Associates at 203.319-4300..

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