More than two-thirds of U.S. businesses expect to hire as many, if not more, candidates in 2021 as they did pre-pandemic. At the same time, many job sectors are experiencing labor shortages due to COVID-19, leaving many human resources teams overextended.
Whether an organization finds itself is facing today’s candidate-driven market, or simply needs to fill routine positions amid high job demand, contingent recruiting can be a fantastic, cost-effective solution to fill positions with high-qualified talent quickly.
What is contingent recruiting?
When a company hires a recruitment firm to search for the right candidate, they usually hire either a contingency or retained search firm.
Unlike working with a firm on a retainer, under a contingency agreement, a company can expect to only pay for recruiting services after the recruiter successfully staffs the position with a qualified candidate. The firm’s work is free up until this point. In some cases, the firm will even refund a fee if a candidate fails to remain employed for the entirety of a probationary period.
Fees for contingency recruitment services vary significantly according to factors like where the candidate will fill a role, what industry a position is in, and the seniority of the job. However, companies typically pay between 12-20% of the new employee’s annual salary for successful contingent recruitment services.
A contingency search agreement is seldom exclusive, so companies will often consider candidates from multiple search sources, including direct applicants, their own recruitment team, or even other recruitment firms. This means contingency firms must refer the best possible candidates for a position to earn a fee.
When should you choose a contingent search?
Often, contingency recruiting agreements are ideal to find qualified candidates to fill entry-level and mid-level positions. In addition, this model works great for companies with leaner budget resources because contingency agreements are done on a project-by-project basis and don’t require any fees unless the search is successful.
Companies with smaller HR departments might often benefit most from using a contingency search to hire for a role. Recruiting firms will leverage their knowledge of the market and industry and tap into established connections with multiple talent pools to find qualified candidates much more quickly. Search firms also can utilize specific recruitment software and technologies that companies might be less likely to have at their disposal. So, tapping into a recruitment firm’s resources can save hiring managers precious time that is better spent on other areas of their business and likely help them find candidates much faster than if they searched on their own.
Additionally, since smaller teams tend to rely more heavily on smaller networks to find candidates, they may run the risk of missing out on talent pools they wouldn’t typically have access to. In this way, using contingent search firms can make a company’s recruitment search process more inclusive.
Matching with the right recruiting firm
If you decide that you could use a recruiting firm’s services, there are a few different factors you may want to consider selecting which firm you’d like to partner with:
- Especially if an organization is searching for a position that requires more specialized skills or credentials, they would most benefit from a recruitment team that has the right specialty or focus or can show that they are highly networked within your industry or regional market.
- Since time is of the essence when you’re searching for a new hire, you’ll want to make sure you’re spending it wisely. This means that you should look for recruiting professionals with an established track record of successful placements, collaborating well with their clients, and retaining talent on their own teams. Many times, firms that check these boxes will have accolades, awards, or client endorsements that will give you some indication of what it will be like to work with a firm.
- In today’s job market, where we find so much of our information online, it is good to check that a prospective recruiting firm has a visible online and social media presence and understands the latest recruiting technology. This will ensure that they can reach as many candidates as possible, especially at the entry level, where a search may need to rely more on active job seekers.
Any successful business leader will tell you that finding the right talent for your organization is crucial to overall high-performance in any sector. With years of experience serving clients across industries and markets, we can help your organization build its best teams and reach your recruiting goals. Contact us to learn more about contingency search and our other award-winning staffing services.