Contingency Recruiting

What is Contingency Recruiting? 

Contingency recruiting is a type of outsourced recruiting service, wherein the recruiter gets paid only on the successful hires they do for the company.  

In simple terms, when an organization hires an agency to find candidates for an open position. The recruitment agency or contractor only gets paid if a candidate they find is hired by the organization. 

How Does a Contingent Recruitment Agency Work? 

The contingency recruiting firm is not involved in an exclusive agreement with the hiring company to hire candidates for that one client alone. Neither is the client bound by any agreement to seek the consultancy services only from a particular contingency recruiting firm. 

  • The typical workflow of a contingency firm is as follows:  
  • The hiring client gives a clear description of the open position which is to be filled.  
  • The agency and the client come to a particular fee and service period for every successful recruitment.  
  • The agency then begins its searching for the right candidate.   
  • When the agency finds the right candidate, they perform the initial screening to ensure that the candidate is the best fit for the role. Once approved, they submit the candidate application to the hiring client.  
  • If any of those candidates are hired by the client, the agency will receive the agreed-upon compensation. 

What Are the Advantages and Disadvantages of Contingency Recruiting? 

Though the benefits of contingency recruiting can be significant, there are also a few potential downsides.  

Advantages  

  • Reduced fees- You only have to pay your recruiters if you hire a qualified candidate which they’ve found for you.  
  • Quick turnaround- If your company needs to fill a position quickly, contingency recruiters deliver within your timeframe.  
  • No in-house recruiters required- Outsourcing your recruiting efforts means you do not need to upscale your office to accommodate recruitment specialists.  

Disadvantages  

  • May waste time- There is no guarantee that the recruiting agency or contractor will find a suitable candidate.  
  • No quality guarantee- Because contingency recruiting is based on a ‘no hire, no pay’ fee structure, they are incentivized to source large quantities of candidates. This does not mean all of these candidates will necessarily be high quality. 
  • Can be inefficient- Contingency recruiting does not mean outsourcing the entire hiring process. Organizations still have to do the time-consuming work of reviewing resumes, determining who to interview, and performing the interviews. Though many agencies conduct these processes for you, you can’t always be sure about the quality. 

 

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Vedangi Pathak
Vedangi is currently pursuing her B.E in Mechanical Engineering. She's a woman in STEM with a keen interest in Marketing and mutual love for reading. Skilled in Public Speaking, Writing, Content Creation and Organization, she has won multiple awards and prizes for the same.