Contingency recruitment services are ideal when companies want to fill positions below the director level. Typically, they aren’t paid until a suitable candidate is found. Therefore, businesses can expand their reach without paying any upfront costs.
This guide will help you understand the benefits of working with a contingency recruitment agency. Learn if outsourcing is right for your company and needs.
What’s Contingency Recruiting (No Win, No Fee)?
Contingency recruiting is an outsourced service. The hiring company will only pay the recruiter when they’ve successfully filled the role, which offers a “no win, no fee” arrangement. This is ideal for many brands.
What’s a Contingency Recruiting Firm?
Usually, contingency recruiting companies work for their clients. They research qualified candidates to find the best talent possible. Firms like this will work on one project at a time and only get paid once the open position gets filled, so it’s better for the hiring company.
How Does a Contingent Recruitment Agency Work?
Typically, contingency recruiters aren’t employees for the hiring company. Instead, they’re contractors working on the search. They understand that they’re only paid when they successfully place a candidate. Therefore, they’re often competing with direct applicants and in-house recruiters.
Often, contingency recruiting firms work against other companies and people to find talent the fastest.
Overall, the recruitment process will vary based on the firm, but the general workflow goes like this:
- Clients provide a job description to the recruiter.
- The contingency recruiter and client agree upon the contract fees and warranty.
- The recruiter starts contacting candidates to find the right one.
- The recruiter gets the candidate’s permission to be submitted to the employer.
- The client chooses which candidates to interview.
- The client makes an employment offer to the candidate.
How Contingency Recruiters Get Paid
The client pays no money until they find the right candidate. Overall, the recruiters work for free until the right talent has accepted the offered job. When the new hire begins working, the recruitment firm receives its fee.
Typically, recruiters add clauses to refund the fee if the new hire doesn’t perform well within a specified time period, called the warranty. In most cases, the fee is a percentage of the candidate’s first-year salary.
Differences Between Contingent Recruitment and Executive Search
There are two job seeker types: passive and active. Active candidates are those looking for a new job and might be researching options through job boards and sending in applications. However, passive candidates aren’t seeking a new job, though they could change jobs if a great opportunity presents itself.
Most contingency executive recruiters work with active seekers. They have databases listing the current market and will introduce candidates to companies looking to hire. Often, the candidates are younger and just starting their careers. For example, they might be managers, supervisors, or contributors.
If the job description involves a senior role, it’s often hard to find candidates. Therefore, executive search is often used and focuses more on passive candidates.
Contingency Recruiting Firms vs. Retained Recruiters
Retained search recruiters are consultants for specialized and executive-level positions. They’re paid throughout the placement process and get guaranteed payments for their services. Typically, retained recruiters have long-term relationships with many brands and talented individuals because they need to know the company’s culture and industry thoroughly.
On the other hand, contingency recruiters tend to be paid once they successfully place a candidate. However, a retained recruiter gets paid in advance to conduct the search for a hire.
Benefits of a Contingency Recruiting Agency
Every company has different recruiting strategies, which depend on many factors. For example, the uniqueness of the position, the HR department, and the organization’s size will play a part. Outsourcing the contingency recruiting process can benefit the client business so that it can reach more people without an initial payment.
Overall, contingency recruitment has a lower risk for employers because the services don’t require a fee until a qualified candidate is found. Likewise, this business model motivates the recruiter to work quickly and find talent fast.
Drawbacks of a Contingency Recruitment Agency
A contingency recruiting agency will often hire multiple contingency recruiters to juggle many search projects and clients. Therefore, they often spend less time focused on the soft skills or leadership traits the potential candidates might have. The internal hiring team takes the slack for this.
Sometimes, clients hire multiple recruiting firms at once to speed up the process. This can confuse candidates when many people are contacting them for work.
Should Your Company Consider Contingency Recruiters?
Companies tend to hire contingency recruiters to help them find better talent. They’ll choose people who get results and are pleasant to work with. Therefore, it could be beneficial for you to work with a recruiter because they have good sales skills and are proactive. Typically, they find candidates faster and are ready to tackle hard-to-fill positions.
However, you, as the company owner or hiring manager, must be responsive and work with your recruiter. Tell them exactly what you need so that they can find candidates quickly.
Find the Best Contingency Recruiter
The top contingency recruiter is one that:
Builds Trust Through Honesty
Recruiters have to build trust with candidates and clients to make an appropriate match.
Uses Technology and Data
Good recruiters understand technology and how it can benefit their candidates and clients. This includes data analysis and collection and strong communication and tracking systems.
Treats People Respectfully
Recruiters should know how to build relationships so that candidates have a lasting impression of them. Every person deserves the best.
Will Do Their Homework
Contingency recruiters represent the client company in the job market. Therefore, whatever they say or do will reflect the brand. They must be willing to learn about the team and their needs.
Final Thoughts on Why You Require Contingency Recruitment
Working with a contingency recruiter might be a great asset for your brand. They will help you find top talent to join your team. Feel free to contact The Quest Organization at 212-971-0033 to request your free consultation and build your recruitment strategy today.
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