What is Contingency Recruiting?

In a world where retaining employees has become a challenge for most organizations, employers are now resorting to contingency recruiting. This makes recruiters strive to find the best candidate that will blend right into an organization’s culture. 

Contingency recruitment works best for companies seeking to fill various positions, including director level. The primary benefit of contingency recruitment is that it saves hiring costs, and you are guaranteed to find the best talent within a short time frame. 

Contingency recruiting is a type of recruitment whereby a recruiting agency only receives payment from its clients after a candidate is successfully placed in a particular job position. There is no upfront in this type of recruitment, and recruiters will have to compete with other contingency recruiting companies to source the best candidate.

Contingency recruiters are usually paid any amount ranging between 12.5% to 30% of a candidate’s first year’s salary, depending on the position available. Since recruiters will only get paid after a successful hire, it motivates them to deliver the best candidates on time so that they can be able to maximize their earnings. 

In case a candidate leaves a company within an agreed time, there is usually a refund policy between the contingency recruiter and the employer. The refund policy also applies if a candidate underperforms and the employer has no choice but to fire them. 

Contingency Recruitment Benefits

For best and quick results, contingency recruiting firms will have to work closely with their clients. They have to understand organizational culture, values, objectives, and more so that they can source a candidate that will fit right in. Simply put, it gives the employer the power to control the entire process. Although this type of hiring does not guarantee quality candidates, it has various benefits to organizations, including the following:

1. Cost-effective: Employers do not need to worry about spending a lot of money during hiring since they can only pay the recruiters once a candidate is successfully placed. In case a candidate leaves an organization within the agreed timeframe, you get a refund.
2. Fast recruitment: Contingency recruiters have diverse networks to tap into when looking for job seekers. This allows them to find candidates faster than in-house recruiters. They also know that their pace is what will bring them money. Therefore, the quicker they source quality candidates, the earlier the payment. 
3. No contractual obligation: Partnering with a contingency recruiter does not require contractual obligation, and you do not owe them any liabilities in case of no hire. They work on a project-to-project basis and receive payment only when you hire successfully. What’s more, you are free to work with multiple contingency recruiters.
4. Offloads HR tasks: Contingency recruitment reduces the many HR managers’ functions, allowing them to focus on other organizational issues that will bring about more productivity.
5. No upfront payment: You do not need to pay upfront fees when partnering with a contingency recruiter. This puts you at ease, especially if you are working with them for the first time and you don’t have to worry about investing with the wrong contingency recruiting agency. The recruiter will have to prove their worthiness to receive payment. 

Executive Search vs. Contingency Recruitment

It is upto a contingency recruiter to present the right candidate to their clients if they want to get paid. With this in mind, they have a lot of work to do, and it doesn’t matter whether they source active or passive job seekers, provided they fit into their clients’ needs.

An active job seeker is a jobless individual looking for new opportunities through job boards, social media platforms like LinkedIn, and more. In contrast, passive job seekers are not in search of a job since they already have one. However, in case a better opportunity arises, they are ready to grab it and change jobs.

Most contingency recruiting companies work with active candidates to fill various positions such as individual contributors, supervisors, or more. However, when it comes to sourcing candidates for senior positions, finding the right fit among the active job seekers can be a challenge. This is because most of such candidates are earlier in their careers with no requisite experience, and for this reason, an executive search is the only option.

Executive search forces the recruiter to reach out to passive candidates with more experience and skills needed by their clients. They use a unique strategy to reach out to such candidates and offer them better job opportunities. At the end of the process, a client will have various resumes to review. 

Contingency vs Retained Recruiters

Retained recruiters are mostly favored when it comes to hiring senior positions since they are highly specialized in finding candidates for such roles. Additionally, retained recruiters sign contracts, making it easy for clients to trust them with their confidential information. 

Unlike contingency recruiters, retained recruiters or headhunters receive payment before they source candidates. They do not work on a project-to-project basis since most of them create a lasting relationship with their clients. They are the best for clients seeking to fill hard-to-find job positions. 

The fees for retained recruiters vary from that paid to contingency recruiters. It can go as high as 50% of a candidate’s first year’s basic salary, depending on the senior position to be filled. 

Companies seeking to hire fast prefer contingency recruiters to source candidates for them. Consider contingency recruiting firms with excellent communication skills since this is the basis for attracting the most qualified candidates. Even though you can also use them for your senior roles, partnering with a retained recruiter may be a good option since you do not want to risk your company’s sensitive information getting into the wrong hands. Simply put, working with the best recruitment agency is worth an investment. You are guaranteed a perfect fit to join your team and drive your business to achieve its objectives.

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