Pay upon delivery
Contingency recruitment is a type of recruiting service where a recruiter or recruiting agency is only paid when they successfully place a candidate in a job position. In other words, the fee for the recruitment service is contingent upon the recruiter finding a suitable candidate who is hired by the employer. If no candidate is hired, the recruiter doesn't receive payment.
Contingency recruitment is often used for filling mid-level positions or roles that are not particularly hard to fill. It's typically faster than retained search (where the recruiter is paid upfront), but the level of attention and resources devoted to each search may vary since the recruiter's compensation is tied directly to successful placements. This model incentivises recruiters to focus on quantity and speed in finding candidates.
Here's how it typically works:
Engagement
A company looking to fill a position engages one or more recruitment agencies to help them find suitable candidates.
Search & screening
The recruitment agency then conducts a search for potential candidates through various channels, including their existing candidate database, job boards, social media, and professional networks.
Candidate assessment
The agency screens potential candidates, assessing their qualifications, skills, experience, and suitability for the position.
Submission to client
Once the agency identifies promising candidates, they submit their resumes and profiles to the client (the hiring company) for review.
Interview & selection
The client reviews the submitted candidates and decides whom to interview. They may conduct interviews with the candidates to assess their fit for the role and company culture.
Placement & fee payment
If the client decides to hire one of the candidates submitted by the agency, and the candidate accepts the offer, the agency is paid a fee by the client. This fee is typically calculated as a percentage of the candidate's first-year salary and is the primary source of revenue for the recruitment agency.
Contingency recruitment can be advantageous for employers as they only pay for results, but it can also lead to less investment in thoroughly understanding the client's needs or in-depth candidate screening. On the other hand, recruiters may take on multiple assignments simultaneously to increase their chances of earning fees, potentially impacting the quality of service provided to each client.
One key aspect of contingency recruitment is that multiple agencies may be engaged by the same client to work on the same role. This creates competition among the agencies to find the best candidates quickly, as only the agency that successfully places a candidate receives the fee. However, it also means that the client may receive candidates from multiple sources, potentially leading to duplication and overlap in the candidate pool.
Overall, contingency recruitment can be a cost-effective option for companies looking to fill positions, as they only pay for successful hires. However, it also carries risks for the recruitment agencies, as they invest time and resources into finding candidates without any guarantee of payment unless they make a successful placement.
Check out Indeed's article on what is contingency recruiting (plus how it works) for more information.
Want to recruit top talent?
Now that you better understand what contingency recruitment is, you may be interested in learning more about 11 Recruitment's permanent recruitment services.
11 Recruitment is the leading perm and temp recruitment agency for white-collar staff. We source high achievers for jobs in Perth and throughout Australia.
At 11, we typically get involved in the recruitment process when a client is either seeking a high achiever to elevate their business, recruiting for a role that is hard to fill, or having difficulty sourcing or attracting suitable candidates.
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