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The Benefits Of An Exclusivity Clause In Retained Search

Christian Spletzer - June 6, 2019

Exclusivity Clauses are almost always a standard requirement for a retained search. Essentially, it means you will only work with that firm for the duration of the search. As common as they are, Exclusivity Clauses can become a sticking point and source of apprehension for you, your legal and finance departments.

This apprehension is almost always caused by misunderstandings related to retained search in general and the Exclusivity Clause in particular. Yet, not using a retained search firm for a key hire based on these assumptions can be a costly mistake.

Misconceptions aside, the Exclusivity Clause exists to improve the likelihood of finding the best candidate for the role.

Common Misconceptions Of Retained Search And The Exclusivity Clause

The biggest source of apprehension doesn’t involve the Exclusivity Clause per se, but an underlying misconception about the purpose of retained search. People often mistake retained search as being transactional—for example, “Just get me a VP of Marketing”—as opposed to a consultative process.

The fact is, retained search is not transactional; great VPs of Marketing are hard to find and typically aren’t actively looking for work. While lower level positions may be easier to source and place, finding the right person who can help steer your company and make strategic improvements requires a level of specialization and experience usually only found within the retained search industry.

You may think, “Well, I have two potentially qualified candidates in mind, so I probably don’t need to work exclusively with a retained firm.” But in reality, there are factors in finding the best candidate that you inherently won’t know.

You won’t know what the market will reveal or require. You likely won’t know how to position your messaging or offering so as to effectively convince a gainfully employed executive to leave their company for yours. You also may not know how to spot red flags or how to assess candidates against each other.

There are many, many moving parts to a retained search, and most clients tend to overlook them. That’s why the value in retained search lies in their specialization and their inherently collaborative process—working with you (not just for you) to get you what you need.

Regarding the Exclusivity Clause itself, it’s sometimes misconstrued as a requirement that potential candidates can only be sourced by that firm. This requirement would assume you can’t consider candidates from any other sources—internal or otherwise.

This situation simply isn’t true. At any point in a retained search, you can choose to hire someone internally or an external referral. Exclusivity Clauses are exclusive only in the fact that the retained firm earns your full attention, participation, and collaboration in achieving the eminent goal of the search: finding the best candidate for your role.

In Fact, There Are Distinct Benefits That Come From Having An Exclusivity Clause In Place.  

1. It reduces extraneous distraction

With a non-exclusive search where multiple recruiting agencies are working on the same role, a sense of competition and distraction can easily arise. Since retained search is inherently consultative, you can find yourself in a position of having to take even more time out of your busy day to juggle and make sense of competing recommendations, emails, meetings, etc. It can easily extend the overall search timeline.

By engaging with only one, it actually streamlines the search by focusing your complete attention on the eminent matter at hand: working with the search firm to find the best candidate in the shortest amount of time.

2. It encourages your involvement in the overall process—which produces better results

Many people seem to think that recruiting is simply a matter of finding qualified people on LinkedIn. In fact, finding the right candidate is only a small part of an inherently multi-dimensional, collaborative retained search process. And your targeted involvement is an important component of its ultimate success.   

One of the first and most important ways retained search firms create value is by helping you flesh out what exactly you need from the role in question. A good firm will require your collaboration in setting a strategy and identifying your desired qualities. Since most of the best executives for your role will not be on the active job market, this strategy exercise includes identifying potential companies to look at for candidates.

The overall search process also involves interviews, conducting contract negotiations, and so on. An exclusively retained search firm that has your complete attention is better equipped and positioned to guide the process and provide you with the information and insight you need to choose the best candidate for your company.

Ultimately, an Exclusivity Clause is meant to benefit both you and the firm. It shouldn't be the deciding factor of whether or not to use a retained search firm for your next key hire.  

Christian Spletzer

Christian Spletzer

After years of working as an executive recruiter, Christian Spletzer founded Clockwork to improve how search firms and clients work together on retained search projects. He designed Clockwork to help recruiters demonstrate their consultative value to their clients at every stage of each project.

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