5 things you need to know about contingency recruitment

You want to fill open position but you still cannot find the right person? You are considering using a contingency recruitment firm? What is contingency recruitment? Did you know these 5 things about it? Let’s find your answers in this article.

#1 What is contingency recruitment?

Contingency recruitment (sometimes called non-exclusive recruitment) is a type of recruitment in which the recruitment firm will get paid by the client only when one of the candidates they present is selected for the open job. There are two types of executive search, including contingency recruitment and retained recruitment.

In contingency recruitment, the recruitment process is performed in a contingent basis – or also known as project-by-project basis. The firms work to find out as many qualified candidates available as possible very quickly. They are motivated to market the largest number of potential individuals to multiple hiring companies at once. They do not really work for any hiring company.

See also >>> 5 things to know about retained recruitment

#2 How a contingency recruitment agency works?

A contingency recruitment agency does not have an exclusive assignment (that is why it is sometimes called non-exclusive recruitment). You can work with multiple contingency recruiters at the same time. And a contingency recruiter can work with multiple clients concurrently.

Contingency recruiters work the front-end part of the process as rapidly as possible. They use their networks, advertise the job on multiple job boards and use online databases to seek a pool of resumes of candidates who are more likely to be suitable for the job. These resumes (CVs) are sent to the clients. Then the clients have to assess and evaluate the candidates themselves. If you work with a contingency recruiter, you have to take more hands-on tasks, including scanning resumes, interviewing and testing the candidates.

Contingency recruiters tend to work in specific industry and fill more skill-specialized positions.

Contingency recruiters may spend time and effort to understand their clients’ working style to increase the chances of hiring individuals who fit the culture. As culture fit is one of the most common reasons for offer refusal.

See also >>> Executive search: let's get to know 10 steps of the process

#3 When to use contingency recruitment?

Contingency recruitment is usually used when the hiring company wants to find suitable candidates – but not necessarily the best candidates.

If you need to find the best candidate, the best fit for executive-level or high-level roles (president, CEO, for example), you may want to work with a retained executive search firm.

You should consider using a contingency recruitment agency in these situations:

    -    When the open position is a not high-level or executive-level position

    -    When there are many people who are suitable for the job

    -    When your company wants to take more control over the recruitment process

    -    When you want to evaluate the candidates yourself

    -    When the recruitment process does not require confidentiality

    -    When you want to accelerate the recruitment process due to an urgent

Therefore, consider carefully before you choose to use service of a contingency recruitment firm.

See also >>> Executive Search & Selection Services of HRchannels Group

#4 Advantages of contingency recruitment

Firstly, let’s take a look at the advantages that contingency recruitment can bring to their clients.

1. The fee is lower

You do not have to pay anything until you get the right match. This means that contingency recruiters search for free and get paid for the results.

The fee is usually 20-30% of first-year salary offered to the selected candidate. There is no money to be paid up front. There is also no other out-of-pocket expense (travel cost, for example). If the hiring company does not choose any candidate they present, the contingency recruitment firm receives nothing. Thus, the general fees are lower.

If the hired employee leaves the position in the first one to two months, you may receive a refund.

If you work with retained recruiters, the fee is higher, there are other expenses and you may have to pay them an annual fee for retaining their service.

2. You do not have to wait for too long

Contingency recruitment firms will try to find you qualified candidates as quickly as possible because they are not the only ones. They have to compete with many other contingency recruiters who are also working with you. Any recruiter who presents the most suitable candidate in the shortest time is charged.

They have a strong sales orientation. They can find out and work with many clients and candidates at the same time. Thus, they can find you many potential candidates through their networks.

3. No long-term contracts are required

Contingency recruiters work with you in a project-by-project basis. They do not require or expect any long-term contract or guarantee of work from you. They will take on all the risk of the recruitment process. If they fail to find you the right individual, you do not have to pay anything. You do not have to pay for their search.

If you work with retained recruiters, long-term contracts are required and you can only work with one firm at a certain time.

#5 Disadvantages of contingency recruitment

Besides advantages, this type of recruitment also has some disadvantages.

1. No guarantee

No guarantee required means higher risk. You have to accept the risk for failure. There is no guarantee that a successful employment will happen. If they fail to find you candidates, they are not paid. In addition, they do not have to take any other responsibility.

2. No exclusivity

They send resumes of candidates to many clients at the same time to increase the chances of a successful employment. Thus, they cannot ensure the confidentiality of the recruitment process. If you are looking for confidentiality, you may want to use retained recruitment.

3. They usually cannot find the best candidates

They work to find out qualified candidates in the shortest possible time. They have to speed up the process in order to compete with other search firms so they cannot spend too much time in searching.

Therefore, contingency recruitment is often used to find candidates when there is an urgent requirement.

See also >>> Pros and cons of using an executive search firm

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