I used to think Contingency Recruiting was the best way to find talent for your company… but I’ve changed my mind.

I have been on all sides of the table in Orthopedic companies.  The Contingency process is broken. The fundamental flaw is that…   your goals of hiring the best talent and the goals of a Contingency Recruiter are simply not aligned.
Let me explain.

 Contingency = low commitment

The bulk of recruiting done in Ortho/Spine is with Contingency Recruiting.  It’s easy and LOW COMMITMENT for both sides. Your Contingency Recruiter is a nice person and seems to be on top of things.  When you get a flood of resumes coming in, it feels like progress towards that great hire. Wrong. You are being misled into believing that you are seeing good talent.  You are not.
5 shortcomings of using a Contingency Recruiter.
1) Lower Quality Talent
A Contingency search will not bring you the best talent available.  Contingency Recruiters target active candidates, but the best candidates are typically passive.  Active candidates are unemployed or about to be unemployed.  Passive candidates are currently doing a great job at another company with no plans of making a move. They are well-paid star performers and are not looking to make a move.  You want to see passive candidates.
2) Less Commitment to Your Search
Contingency Recruiters will only give you a tiny fraction of their time. Contingency Recruiters do not have time to conduct a thorough search.  Contingency recruiters must be first in order to get paid.  It is a race against the other Contingency Recruiters who are trying to fill the same position. They will flame out quickly on your search.
3) Less Vetting
Contingency Recruiters don’t have time to do a deep screen of the candidates who they are presenting. It’s a numbers game and they are working Contingency searches at 10-30 companies at the same time.  How about this resume? Ok, then how about this resume?  Ok, then…   The net result is that you are getting lower quality resumes from Contingency Recruiters because they don’t have time to vet the candidates because it’s a time race among the Contingency Recruiters.
4) Not Objective
Contingency Recruiters will coach or prep candidates for the interview at your company, so often you are not seeing the real person. They are biasing their candidate over the other Contingency Recruiters candidates in order to win the race.
5) Lack of Loyalty 
Contingency Recruiters will present your candidate to other companies making you compete over the candidate and essentially undermining the process. I have been that hiring manager only to lose a good candidate for another company because the recruiter shopped him/her around at the same time.
 

 Retained = high commitment
 
The less traveled recruiting method used in Ortho/Spine is Retained Recruiting.  The goals of your Retained Recruiter are aligned with yours. It is based on a HIGH COMMITMENT relationship.  I believe that the Retained approach is better for your key positions if you must find a key person who will have a significant impact on your company – a transformational position.  And I believe that Retained approach is better for smaller companies where each position counts.

8 advantages of using a Retained Recruiter.
1) Higher Quality Talent
A Retained Recruiter doesn’t go after the job seekers (active), they look for the best candidates (passive) who are currently doing a great job at your competitor.
2) More Commitment to Your Search
A Retained Recruiter will allocate a large portion of their time to your search.  Retained Recruiters know that you are serious because you have paid a retainer up front and they are exclusive to your search.  Since you have skin in the game, the Retained Recruiter is committed to your success.  The Retained Recruiter will attack your search with laser focus.

3) Careful Vetting
Retained Recruiters invest the time to “know” the candidates who are presented.  You will see fewer candidates, but much higher quality candidates.
4) Totally Objective
Retained Recruiters will never coach or prep candidates for the interview. In fact, they will be careful to not dress up the candidates. And an even more refreshing aspect of the retained process is that the retained recruiter will highlight warts and flaws of each candidate because he wants you to make the best choice among the lot.
5) Loyalty
Retained Recruiters will never present your candidate to another company.  You will not see candidates who are being shopped around to other companies.  The Retained process is a partnership with your company. He wants you to find the best.
6) Less Noise
With a Retained search, you only have to deal with a single recruiter.  Also, you will have fewer fully vetted candidates to review. With a Contingency search, the hiring manager and HR must deal with multiple Contingency Recruiters simultaneously and a flood of resumes coming in.
7) Longevity of Hire
I cannot prove this with stats, but anecdotally I know that Retained hires stick longer than Contingency hires.  The quality of the search process and vetting results in more career longevity.

8) Cost
Surprisingly, a Retained search will cost the same or just a bit more than a Contingency search even with the upfront retainer payment.

ALPHATEC’S HOLE DEEPENS. WHAT’S NEXT?  (Orthopedics This Week)
Conditions at Alphatec have, apparently, reached the stage where a press release regarding the quarterly results is not considered necessary.
Nor, for that matter, is a call with Wall Street analysts to review the quarter.
On May 6, 2016 Alphatec Spine filed the required 10-Q financial report with the Securities and Exchange Commission (SEC). Normally, that would prompt both a press release and a call with analysts and institutional investors.
Not this time.
While management appears to have gone radio silent, rank and file Alphatec employees are lighting up anonymous web-based message boards with blistering critiques and dire warnings.
Comments like this one are being repeated in one form or another: “Pros: great benefits, good products and excellent people who work here. Cons: sales down, morale not good, no cash flow, no hiring in early 2016, not very positive work environment. Used to be better when DK was here.”
DK refers to Dirk Kuyper, CEO at Alphatec from 2007 to 2012.
Reading the tea leaves, Alphatec may be vacillating between two potential circumstances:

Debt holders have replaced equity owners as the company’s most important constituency and are putting together some form of recapitalization—with our without court assistance—likely without current management.
Or a buyer for Alphatec is trying to close the deal and a call with Wall Street will wait until that is wrapped up.

Reading Alphatec’s 10-Q
Alphatec’s March 2016 SEC filing is tough reading. No doubt the company’s attorneys urged management to disgorge every possible negative fact or possibility.
Here are the key points:

Sales for the three months ended March 31, 2016 fell 8% from the same period last year.
Operating earnings turned from a $1.1 million profit last year to a $3.7 million loss this year.
Net loss reached $6.6 million.
Cash at the end of the quarter was $7.8 million.
Total current liabilities at the end of the quarter were $130 million.
Total current assets at the end of the quarter were $100 million.

The following table illustrates how steadily Alphatec’s operations have deteriorated since 2013.
Source: Alphatec’s 10-Q filings with the Securities and Exchange Commission

First quarter sales declined each year since 2013/
Alphatec has reported an operating loss in 3 of the last 4 1st quarters.
Cash balances are now one-third of 2014 levels.
Current debts are now 30% more than current liabilities.

In its March filing with the SEC, management disclosed the depth of its financial distress saying, in effect, that the company could not meet its financial obligations this year without some form of help from investors.
“There is no assurance that we will be in compliance with the financial covenants of the Amended Credit Facility or the Facility Agreement in April 2016 or in the future” said Alphatec in its March 2016 10-Q filing. “If we have future defaults and we do not obtain waivers from MidCap or Deerfield they would have the right to call their respective debts due immediately, which would significantly impact our ability to continue as a going concern. We intend to pursue additional opportunities to raise additional capital through public or private equity offerings, debt financings, receivables financings or collaborations or partnerships with other companies to further support our planned operations. However, there is no assurance that we will be able to do so. Accordingly, as of March 31, 2016, there is substantial doubt about our ability to continue as a going concern through December 31, 2016.”
In short, investors, employees and other stakeholders are hanging on for whatever happens next and hoping that time has not finally run out for Alphatec.

ATLAS SYSTEM FOR OA PATIENTS: FIRST RESULTS (Orthopedics This Week)
The first data is out on the Atlas System, a unicompartmental joint unloading device for pre-arthroplasty knee osteoarthritis (OA) patients, developed by Moximed, Inc. As indicated in the May 9, 2016 news release, the data, “revealed that patients with the Atlas System experienced effective pain relief, regained range of motion, and returned to normal activity levels within several weeks. The Atlas System obtained CE Mark at the end of 2015, and the company is in the early phases of introducing the product to European customers.”
“We are seeing increasing numbers of younger patients with knee osteoarthritis who are looking for pain relief and the ability to get back to their active lifestyles,” explained Robert Smigielski, M.D., of the Carolina Clinic in Warsaw, Poland, and a team doctor for the Polish Olympic team. “The data from our study show that these patients could benefit from the Atlas System and its joint unloading and joint preserving approach.”
As indicated in the news release, “Data from a 26-patient prospective, multi-center study presented at ESSKA [European Society of Sports Traumatology, Knee Surgery & Arthroscopy] demonstrated that the Atlas System provides rapid, clinically effective pain relief and an excellent safety profile for patients with early knee OA in the pre-arthroplasty stage of their disease. WOMAC pain and functions scores improved from 53 ± 8 and 48 ± 17 at baseline to 17 ± 16 and 21 ± 17 at six months, respectively (lower scores represent improvement); 92% of patients experienced a clinically meaningful improvement on their WOMAC pain score, defined as a 10-point absolute improvement. Knee Society Pain and Function Scores improved from 62 ± 15 and 73 ± 14 at baseline to 91 ± 10 and 98 ± 4 at six months, respectively. Patients regained baseline range of motion (130 degrees) by 6 weeks to 3 months and returned to high impact activity levels, including basketball and running.”
“During ESSKA, Konrad Slynarski, M.D., Ph.D., of Lekmed Szpital in Warsaw, Poland presented his experience treating patients with early OA associated with a repetitive overload condition, such as degenerative meniscus, cartilage defects, and bone marrow edema. Eighteen consecutive patients were enrolled and achieved improvement in WOMAC pain scores from 53 ± 15 at baseline to 19 ± 15 at six months (p<0.001).”
“These are very promising results from a study that uniquely considered early OA, such as degenerative meniscal pathology and cartilage changes, in the included population,” explained Dr. Slynarski. “Patients with a degenerative meniscus and early OA often experience a recurrence of symptoms only months after meniscectomy, and now they have a pre-arthroplasty treatment option to consider.”
“In a third presentation, Priv. Doz. Dr. med. Christoph Becher, a surgeon with the ATOS Klinik Heidelberg and an Associate Professor at Hannover Medical School, revealed data from an in vitro biomechanics study demonstrating that the 13 kg of unloading by the extra-capsular absorber reduces peak contact pressure by up to 30%.”
Dr. Smigielski told OTW, “The Atlas System is a next generation, unicompartmental joint unloader based on eight years of clinical experience. It is a reversible, pre-arthroplasty procedure targeting 35-60 year olds with early to moderate knee osteoarthritis. Target patients for Atlas are often already known in surgical practices, having progressed to early osteoarthritis after previous cartilage, meniscus, or ACL procedures.”
“Many surgeons, now convinced of joint unloading as a standalone treatment, are now interested in studying the effect of unloading in combination with cartilage regeneration procedures.”