5 Crucial Considerations When Working with a Contingency Recruiter

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According to recent findings of the Society for Human Resource Management’s HR Knowledge Center, the national average across employer sizes and industries fluctuates between 30 and 40 open positions at one time. However, the median fluctuates between 15 and 20 open requisitions per hiring manager.

The candidate recruitment process has evolved over the years. The current modification in the process focuses on making talent hunting much more accessible. Key hiring statistics demonstrate that new tech and trends bring about many changes and alterations in candidate recruitment. The latest talent acquisition methods influence how employers make hiring decisions and candidates accept jobs.

Take a look at this summary of current recruitment reports to understand hiring and recruitment better. It can help you align your company with the latest developments.

key hiring statistics

Source: Finance Online

Most companies make recruitment partner agreements and hiring decisions based on different factors specific to their department or organizations. Factors that affect this vital decision may include confidentiality, style, budget restraints, market availability, culture, and competitors.

It is worth mentioning that when you partner with the right recruiting agency, the ROI will be significant. This is where the role of contingency recruiting comes into play.

According to LinkedIn, businesses and organizations can expand their talent pool more than ten times by hiring a recruitment agency. The new talent (recruited via an employee network) can add value to an organization.

But how exactly does contingency recruiting work? How does it benefit the business? Most importantly, what are crucial considerations you must be mindful of when working with contingency recruiting firms?

Keep reading to find out the answers to these questions and more!

What is Contingency Recruiting?

Germy C. Cepin, Executive Search Consultant at Korn Ferry, states in his book that business owners need to choose the right search firm to fill the critical vacancies in their company. It is the most crucial decision for two reasons:

  • The potential the right hire can deliver
  • The high cost of choosing the wrong person

In this regard, contingency recruiting plays a critical role in hiring. Contingency recruiting hiring a third-party search firm or recruiting agency to find candidates to fill open positions.

The Manpower Group reported that 69% of employers and companies face challenges finding skilled and talented candidates. Similarly, Jobvite, in its recruiter nation study 2019, highlighted that 74% of recruiters and employers believe that recruiting will be more challenging and competitive in the coming years.

How Does Contingency Recruitment Work?

contingency recruiting agency is not a part of the hiring company. Typically, a contingency recruiter is a contractor or a transaction-oriented firm.

Contingency recruiting is third-party recruiting that helps companies maintain a relationship with plenty of other firms. They work with many search firms to ensure successful placements of the candidates. The third-party recruiters work on candidate search with an understanding that the hiring company will pay them for the successful placement of the talent.

It may also mean competing with the in-house recruiters of the clients or other direct applicants. In some cases, the recruiting firms go head to head with the competitors to target the potential candidates for their clients.

The contingency recruiting process often varies from agency to agency. However, the typical workflow follows these steps:

  • The clients provide job descriptions to a contingency recruiting agency
  • The clients and recruiters agree on a contracted warranty and fee
  • The recruiters begin contacting applicants and candidates to find the best one
  • The recruiters obtain the candidate’s permission to forward resumes and CVs to employers
  • The clients select candidates and schedule interview
  • The clients make employment offers to the right candidate

Hiring a Contingency Recruiter: How Does it Benefit Businesses

Selection and recruitment define strategic human resource management attributes. It highlighted the importance of employing the right people to ensure the business can achieve its goals and objectives.

Strategic selection and recruitment play an essential role in meeting the objectives of an organization. Businesses must recruit the right people for the right jobs to grow and accomplish long-term goals.

This is why the trend of hiring contingency recruiting agencies is becoming more prevalent. Organizations are now more aware of critical objectives and are rapidly leveraging their competitive advantages.

Retained recruiters use their highly maintained networks to work rapidly. They post the job opportunities on various job boards, databases, and job researching tools. Using extensive networks, contingency recruiting agencies approach candidates looking for jobs.

A contingency recruiter agency gets paid only when a firm hires its applicants. The best contingency recruiter only sends high-quality candidates. It doesn’t inundate employers and businesses with passable job-seekers.

Crucial Considerations You Need to Be Mindful of When Working with a Contingency Recruiter

Coverage, Qualification, and Track Record

Evaluating the contingency recruiting agency’s track record, you’re interested in working with is crucial. It would help to find out whether the firm has an international reach. Does it match the subject matter competence of your company’s business, and does it have a reliable reputation and track record?

Note that the objective of contingency recruiting is to have the candidates employed by the company. A contingency recruiting firm does its best to find the most qualified and competent person for a position. According to ICIMS, 65% of contingent employees found jobs through referrals.

The study included 50 firms and more than 9000 workers. The results showed that 50% of employees (hired via an employee network or contingency recruiter) retain the job for 38 months compared to 20 months for non-referral hires.


Source: ICIMS

It is essential to evaluate the track record and qualification to ensure that the firm you’re hiring or intend to work with is reliable and has all the necessary resources. The contingency recruiting agency you choose must specialize in the relevant field. Understanding the client’s business and assessing candidates is a significant trait.

Critical Insights

Due to the ongoing health crisis and pandemic, businesses are forced to downsize, close, or become more careful in their recruiting processes. Statista’s 2021 survey showed that the national unemployment level in the US stands at 10.3 million.

The rising unemployment rate and other factors have required businesses to employ a different recruiting strategy. They must find a suitable contingency recruiting firm that can help employers find the right talent and improve turnaround.

Look for sufficient in-house expertise from a contingency recruitment agency to tackle your business. If a contingency recruitment firm is thinly spread and handles only one search at a time, it might be beneficial for your business.

In some cases, internal recruitment is best to meet your goals. For small businesses, internal hiring costs less and tends to perform better.

Administrative Science Quarterly published a landmark study comprising data from the investment banking division of several financial service companies. The analysis of 5000 workers, who were promoted within the companies, showed that they are better performers than external hires.

Hiring Quality Employees Internal vs External Recruiting Graphic

Source: Online. Jefferson

The study also substantiated how recruiting from within the organization is often less expensive than contingency hire. Capacity and internal insight are essential factors for a contingency recruiting agency to deliver the best talent acquisitions service.

Choose a recruiting firm that works with creative teams to understand your company’s goals and follows a focused and strategic recruitment process to ensure you get the most responsive service.

Intense Research and Network System

Typically, you need to hire a contingency recruiting agency for two primary reasons:

  • If your firm lacks talent
  • Due to the expanding needs of a business

The contractor or recruitment agency only gets paid if it completes the hiring process successfully. The recruiter fee is 20 to 30% of the stipend of the position filled. Contingent refers to the word dependent. In hiring, it means that a business is dependent on contingency recruiting to fill the firm’s open position successfully.

Find out if the contingency recruiting agency has a robust internal system connected to a relevant database and social media. Does the agency use advanced search engines that leverage AI-powered tools? Can it provide you with an on-demand, real-time report on your search progress?

How much does your contingency agency use technology such as on-demand computing, cloud services, video conferencing in its daily business?

Keep in mind that the availability of state-of-the-art platforms ensures a successful talent search. Did you know 88% of firms globally use AI-powered tools for HR activities, according to SHRM?

These candidate profiles available on AI sourcing software and other high-tech tools help recruiters analyze the job description and benefit from semantic search. They work best to match candidates to open positions.

Accuracy and Responsiveness

Does the contingency recruitment agency give you quantifiable commitments to provide four to ten candidates in a specified period? It must ensure that the candidates are worthy of selection and interview by your firm.

Also, it would be best to determine that the contingency recruitment firm you want to work with is following a proper process.

It should allow employers to evaluate the caliber of the agency by letting them check the process (for the right hire) they follow. The agency should thoroughly analyze the job description provided by the company.

Next, see if it identifies qualified candidates by searching its database. It must source new candidates if a hiring company requires employees with additional skills. The retained recruiter needs to reach out or contact prospective candidates to check if they’re interested in the opportunity.

The agency submits the resumes and details to prospective employers if they are. Employers then identify candidates they want to schedule an interview. If the candidate gets the job, the recruiter receives the predetermined fees.

Quality of Analytics and Deliverables

Remember that not all contingency recruiters work in the same way or offer benefits to your recruitment and selection process. Rollis Fontenot, HR Maximizer, highlighted situations in which contingency recruiting becomes challenging for enterprises.

According to him, contingency recruiting is not much different from self-insuring. It often becomes an expensive option for small businesses and organizations with negative net cash flow. Typically, contingency fees may range from 10 to 30% of an employee’s annual salary.

If a company wants to hire multiple candidates in a short period, it needs to pay high fees for contingency recruiting. That is why it is essential to be mindful when hiring a contingency recruiter. The best way to ensure that you’re paying for the right services is to determine the quality of analytics of your contingency recruiter.

A reliable recruiter delivers reports and analytics before your hiring manager interviews the recommended candidates. The information comprises a written assessment of presented candidates based on meetings, verifying the following:

  • The candidate’s potential against the stated requirement
  • The credibility of the CV of the candidates

Also, find out if the deliverables lay out the opinions and facts about candidates that can impress a reviewing executive.

All in all, for any company to choose the best recruitment agency, it is crucial for the business owner first to assess the various hiring methods and models that could help them fulfill their company’s specific needs. At the same time, it is also essential to be aware of the recruiting techniques that can harm the business in the long term.

In this regard, contingency recruiting is a viable short-term source company can use to find the right talent for their open positions. Partnering with trusted contingency recruiters can help businesses boost their recruiting efforts and create a robust talent pipeline.

To know more about how contingency recruitment can help you scale your team and achieve business goals quickly, get in touch with us at Recruiter.com. Our extensive team of skilled on-demand recruiters spread across different industries and niches will help you find the suitable candidates that go on to become valuable long-term resources.


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