What Is a Contingent Recruiter and Contingency Recruiting? (Plus How It Works)

Being a contingent recruiter means you work for a recruitment agency that receives a fee for finding the qualified candidate for the job if the company chooses to hire that person. This recruitment outsourcing option can save companies energy and time. However, it’s wise to learn more about contingency recruiting if you plan to work in HR (human resources department).

Today, you will learn what contingency recruiting is and how it works. Plus, you’ll focus on the potential disadvantages of contingency recruiting and its benefits while reading FAQs relating to the topic.


What’s Contingency Recruiting?

What's Contingency Recruiting

A contingency recruiting agency is not like a staffing firm. Here, a company will hire contingency recruiters through the agency to find candidates for a job. The fee paid only comes after the company employs that candidate. Payment depends on a recruiting company locating a suitable candidate and the original business hiring them.

Overall, contingency recruiters are often highly motivated to find candidates for the company because their pay depends on their performance. Therefore, if the company doesn’t choose to hire that candidate, the recruiter won’t get their fee. Overall, the recruitment process is often called “no win, no fee.”


How Will Contingency Recruiting Work?

The contingency recruiter has to work quickly to produce candidates for companies because they’re often competing with the brand’s HR department. Likewise, contingency recruiters use various methods to find qualified candidates, such as print and online advertising. They also have business connections to make it easier to locate appropriate candidates.


Six Steps That Many Contingency Recruiters Often Follow

When the contingency recruiter starts searching, they’ll follow several contingency recruitment steps to find appropriate potential employees. These include:

1. The Company Representative Offers a Job Description to the Contingency Recruiter

Company representatives will explain to the contingency recruiter what the job description entails and may even include information about the company culture. The company wants the recruiter to understand what is needed, and the recruiter will review the job description and find candidates with appropriate experience and education.

2. The Recruitment Agency and Company Agree on Terms and Fees

Now, both parties must agree on how much the recruiting agency receives as a fee if the company hires the candidate found. They may also include other terms, such as how long the guarantee is and when they’re typically paid. The contract is signed at this time, with recruiters working quickly to find the right candidate.

3. The Contingency Recruiters Perform a Candidate Search and Contact Prospects

The recruiter will talk to the potential candidates to find the right fit for the company. Generally, candidates want to use recruiters because it makes the job search that much easier.

Often, the discussions happen in-person or virtually and can include video meetings, telephone calls, social media, and email.

4. Candidates Agree to Interview with the Hiring Company

In most cases, the candidates don’t work on an exclusive basis with one recruiter. However, they do have to give permission to tell the hiring company they want an interview. This is when most prospects are ready to meet the representative of the company, and the recruiter will prep them to ensure they show themselves in a good light.

5. The Hiring Company Selects Who to Interview

Next, the hiring company will review the options the recruiter offers and allows the representatives to choose which candidates to interview for the open position.

6. The Hiring Company Sends an Offer Letter to the Candidate They Like

If the hiring company chooses a suitable candidate for that open position, it will offer that person employment. Once it’s listed as “position filled,” the recruiting agency gets paid because it found the best talent possible.


Benefits and Drawbacks of Contingency Recruiting

With recruitment, there are drawbacks and benefits. It’s important to know what they are to determine if outsourcing recruitment is right for your company. Here are the advantages:

  • The company can save money, and there’s no upfront fee the client pays.
  • Everything is done on a contingency basis, which could decrease the HR department’s workload.
  • A recruiter might offer more guidance, such as negotiations for salaries.
  • If the hired candidate isn’t successful, the company might be allowed to lower the fee paid for the new talent.
  • There isn’t an exclusivity clause written into the contract. Therefore, companies often hire multiple recruiters at the same time.

Here are a few disadvantages of working with a contingency recruiter:

  • Searches generally focus on quantity, so it could take time to find the perfect candidate.
  • Companies might have to pay for candidates who leave after a short period.
  • Recruiters often present the exact same candidates to various clients.
  • The one-time fee might be expensive for a small company.


FAQs about Contingency Recruiting

FAQs about Contingency Recruiting

How Does One Choose Contingency Recruiters?

When choosing recruitment agencies, it’s important to select the right contingency recruiter. This person will have a database of suitable candidates, and it’s generally wise to go with companies that focus on a data-driven approach. They’ll have technological tools available, which in-house recruiters may not have.

How Much Will Contingency Recruiters Charge?

Most contingency recruiters will charge a percentage of the hired person’s annual salary. This number can vary, but it’s often 20 to 30 percent.

What’s the Difference Between Retained Recruitment and Contingency Recruitment?

The primary difference between retained recruiters and contingency recruiting is how the agencies get paid.

A contingency recruiter is paid once they’ve found a candidate who accepts the employment offer. However, retained recruiters get paid upfront and then receive additional compensation after the retained search is completed, and the candidate is found. The upfront payment of a retained search incentivizes a retained recruiter to locate appropriate candidates for the open position.

Typically, a retained search from a retained recruiter is used for senior positions and those with advanced skills needed. However, contingency recruiters are primarily used for entry-level positions.


Final Thoughts on Working with Contingency Recruiters

Contingency recruitment could be the right option for you and your company. Today, you’ve learned what contingency recruiting is and how it works, which could help you be successful when finding talent for your brand.

For a free consultation on your contingency recruitment hiring strategy, contact us at info@questorg.com or 212-971-0033.

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