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Ask the expert: Should I use a physician recruiting firm?

Hospitalist Leadership Connection, February 22, 2011

A recruiting firm is only as good as the individual recruiter assigned to the specific search. Just as there are great, good, average, and just plain poorly performing physicians, there are also great, good, average, and poor recruiters. The risk is not knowing which is which until you have paid or committed to pay them a lot of money. Regardless, many hospitals choose to use recruiting firms to expand their recruiting reach for difficult-to-fill searches, such as hospitalist positions. There are basically two types of recruiting firms: contingency firms and retained firms.

Contingency recruiting firms charge a fee only if they are successful in placing a candidate. Most will ask clients for a relatively small sourcing investment so they can run ads or send a mail piece. For the most part however, client payment is contingent on successful placement. This is a great financial arrangement for the client. However, it is important to understand that this creates a candidate-focused recruiting effort, not a client-focused recruiting effort. With no real obligation to the client, contingency recruiters will focus their efforts on finding candidates that are “placeable.” Even though the hospital will only pay recruitment fees if they are successful, it might not matter to the contingency recruiter where that candidate is placed. In essence, contingency firms have a candidate-centered and not client-focused recruiting effort.

However, there are many good, successful contingency recruitment firms out there.
The best will provide service that is equivalent to that of retained firms, but with contingency terms.

Retained firms typically charge a monthly retainer to conduct a search but provide no guarantee of success or, at best, a very minimal guarantee. In addition to the monthly retainer, these firms typically charge sourcing fees and site visit expenses. Some retained firms charge an initial retainer, then hourly fees (similar to attorney fees), plus a placement fee upon successfully filling the position. In essence, the client is paying for the effort, not necessarily for the placement.

In theory, a retained search is a client-focused recruiting effort, but it is important for the client to understand how the assigned recruiter is compensated. Most retained firms compensate their recruiters with commission-based compensation. Each recruiter will maintain a portfolio of searches. Therefore, working with a retained firm can be risky.

Even though the client is charged a monthly retainer, the recruiter is motivated by his or her compensation plan to work on the searches where a placement is most likely.

The above excerpt is adapted from Practical Guide to Hospitalist Recruitment and Retention, by Kirk Mathews, MBA, and John Nelson, MD, FACP, FHM, published by HCPro, Inc.
 

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