Introduction: Back in July 1995, a pivotal moment occurred that forever changed the way my Austin-based search firm operated. For years, we, like our competitors, charged expensive percentage-based contingency or retainer fees for completed searches. However, everything shifted when I proposed a revolutionary idea to my top client: filling their 36 open positions at an hourly rate instead. Although initially hesitant, the HR VP agreed to give it a try. Little did we know that this bold move would not only yield remarkable cost savings but also unlock a range of additional benefits. Since that day, my firm never looked back and said farewell to contingency searches.

Unveiling the Benefits: The transition to an hourly rate model brought forth a multitude of advantages that proved to be game-changers for both my firm and our clients. Let’s explore these benefits:

  1. Unparalleled Cost Savings: In the span of three months, my firm successfully filled not only the 36 open positions our client had but also an additional eight. The result? A staggering savings of $365,000, equivalent to a remarkable 53% reduction compared to what they would have paid in contingency fees. This cost-effectiveness immediately caught the attention of clients seeking to optimize their recruitment budgets.
  2. Customized Focus on Critical Openings: With the hourly rate model, clients gained unprecedented control over directing the recruiter’s time and attention. Unlike the traditional contingency approach where recruiters often pick and choose which openings to prioritize, this new model allowed clients to pinpoint their most critical positions. By aligning the recruiter’s efforts with strategic business needs, clients could ensure that valuable resources were allocated where they mattered most.
  3. Flexibility in Job Description Parameters: Another advantage stemmed from the ability to modify job description parameters as needed. In a rapidly evolving job market, roles and requirements can change swiftly. The hourly rate model offered the flexibility to adjust job descriptions on the fly, accommodating shifting hiring needs or market dynamics. This adaptability empowered clients to stay ahead of the curve and secure candidates with the precise skills and qualifications necessary for success.
  4. Elimination of Bias and Focusing on Quality: Shifting away from contingency-based fees eradicated the potential bias that can arise when recruiters are incentivized to prioritize higher-priced candidates. By embracing an hourly rate model, the focus shifted exclusively to identifying the most suitable candidates for each role, regardless of their compensation package. This shift promoted objectivity and ensured that the recruitment process centered on quality rather than financial considerations.
  5. Cultivating Long-Term Relationships: Beyond the immediate benefits, the hourly rate model fostered long-term partnerships between recruiters and clients. Collaborating on an hourly basis encouraged deeper understanding, improved communication, and enhanced trust. This strengthened relationship between the two parties led to more effective collaboration, a shared sense of purpose, and ultimately, better outcomes in the recruitment process.

Conclusion: The day contingency search died marked a pivotal turning point in my firm’s history. Since that day in 1995, I have saved my clients well over $10,000,000.00. ~ Ray Holley