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Contingency Recruiting 101: Everything Recruiters Need To Know

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Recruit CRM Published on Jul 12, 2021

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The word 'Contingency' means an event that may but is not certain to occur. The meaning itself makes it a bit clear of what contingency recruitment could hold for you. The contingency model is a model of recruitment where you collect the fees from your clients if and only if you introduce a suitable candidate to the company and the candidate receives an offer letter after the selection process and then shows up for work.

There is nothing guaranteed in this type of recruitment, so many tend to stay away from it and focus on much safer and less risky models.

In today's world, it's even more critical for you to research and decide which model you find the best for your staffing firm. You cannot make decisions based on a hunch which is why you require in-depth knowledge. It can take a lot of time to research all of these new topics, especially if it's an entirely new area of work for you, so we decided to make the job easier.

There are four main recruitment models, namely Contingency Search, Retained Search, Recruitment Process Outsourcing (RPO), and Executive Search. In this article, we will solely be discussing the Contingency model of recruitment and everything you need to know about it as a recruiter.

Read more: Understanding more about Recruitment Process Outsourcing.

What Is Contingency Recruiting?

what is contingency recruiting?

1. Defining Contingency Recruitment

The contingency recruiting model is developed for recruiters working to be hired on a transactional basis. Here, neither the client nor the recruitment agency is bound by any exclusive agreement or contract. This is why many contingency firms work for multiple clients at any given time.

For example, you will be recruiting candidates to fill up entry or junior level positions for a company.

Consultants often go for suitable and not necessarily the best candidates to fill these positions because their focus is more on getting the position filled up as quickly as possible. Why the hurry? Because there will be other contingency recruiters who may also be on the lookout for candidates to fill such positions. Whoever gets the job done first will be the one getting paid.

2. It Happens In An Orderly Manner

Any task in such firms is approached in a mannerly way where your client will first give you a description of the position that needs to be filled up followed by the agency and client reaching a middle ground where they have discussed and decided the contingency period under which one should complete the task and the amount that the company will issue to the agency on successful recruitment.

3. How Long Is The Contingency Period?

The contingency period is usually between 1-2 months. This is again why recruiters are in such a hurry to complete their tasks before the deadline. After the above has been discussed, the agency will now be using information stored in their databases to conduct an extensive search for the candidate through advertising and approaching companies that develop software like an Applicant Tracking System (ATS) to sign up.

Finally, after all these steps, if you find a suitable candidate, you will introduce them to the company. If the recruitment is successful before the contingency period ends, you get the amount you and your client had decided on earlier. This is the reason why this model is often called "No win, No fee".

Read more: 10 positive ways Recruit CRM has been changing the recruiting world.

4. Let's Talk About Some Cash

contingency recruitment

Although in a hurry, recruiters working in contingency recruitment agencies still manage to put in the time and effort required to notice how things work in their client's company they will be recruiting for and find a candidate with a skillset suitable for both the work culture and the job.

Do you know what is a contingency fee agreement? As a recruiter, you will be receiving fees that may range from 12-20% of the candidate's annual salary. It is a high-volume transaction business, and the competition is always high, so you have to be quick with everything you do while also not compromising the basic rules of recruitment.

5. How Many Positions Will A Recruiter Be Filling In One Go?

As this is a high-volume transaction business, you will search and scan for multiple candidates to fill up many positions. Usually, the number of positions you will be working on is around 20-25. It also reduces the risk you took because if you are a skilled recruiter, it's nearly impossible for all of your selected candidates to not get through the screening process. Both the candidate and your client know how eager you would be to fill up a vacancy, so they might trust you and your work ethics more and entrust you with more tasks in the future.

6. Why Are Recruiters Hesitant About Contingency Recruitment?

  • The main reason one is hesitant about contingency recruiting is because of the considerable risk involved in it. You not only have to search and select the candidate, but you also have to do it before someone else does, which makes the whole process a lot more overwhelming and stressful. Other than this, companies know that contingency recruiters are very fast-paced and tend to get a job done a lot more quickly compared to other models of recruitment agencies. They also won't have to deal with a loss if you don't get them a suitable candidate, so they are always willing to work with such recruitment agencies.
  • Even if you are very confident in your abilities as a recruiter, you should know that you will not be successful if you are not quicker than the rest. Suppose the competition doesn't take you out. In that case, sometimes, even the client can decide to cancel the availability of a vacant position in the company or offer it to someone who's been referred to by the company's employee(s). Since there are no exclusive contracts between both parties, you cannot question their decision either. In such cases, it's often advised to get a contingency recruiting agreement in place.

This doesn't mean you are doomed from the start, and these are just pointers for you to know before you get into unchartered territory.

In Final Words

Companies prefer contacting recruitment agencies to hire suitable candidates because the entire recruitment process can be very overwhelming and tiring. They want to focus on managing the company and remaining hassle-free, and not be burdened with too many tasks at once. These agencies help search for candidates who can determine and fulfil the company's present and future needs. A suitable candidate contributes to the company's efficiency and boosts up the morale of others working with them, so it's crucial to hire the right person for the right role.

Don't forget to tell us if you're hiring on a contingency basis!