The document discusses the shortcomings of traditional search firm fees and advocates for a performance-based payment model that rewards results rather than upfront promises. It emphasizes the need for minimal retained fees coupled with a success fee structure to align incentives between hiring firms and search firms. The Plenum Group promotes this approach to improve the efficiency and effectiveness of the hiring process.

1. www.theplenumgroup.com
Why Search Fees Must Be Performance Based
Too many firms have experienced a search firm that charged extortionate
retained fees and delivered nothing in return.
However most senior hiring managers understand that you cannot engage a
professionally minded organisation to work on your behalf without offering any security
that they will receive payment for the work done.
Performance only “contingency” fees sounds like a great idea, but this arrangement
normally results in recruiters understandably sharing limited resource across a high
number of clients. This rarely serves the best interests of the hiring firm.
So is there a better way to approach this?
At Plenum we believe so. We believe that a search firm that values its time and network
requires some downside protection, but should ultimately receive the vast majority of its
revenue only on successful delivery.
This is why we advocate minimal up-front retained payments in favour of a success fee.
This means the vast majority of the payment is then released only on successful
placement and you pay for results, not promises.
To discuss how this approach could work for your organisation please get in contact.
TC Jefferson tcjefferson@theplenumgroup.com
Janeshree Naidoo jnaidoo@theplenumgroup.com
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www.theplenumgroup.com/blogs
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Plenum 2014 – Financial Services Executive Search