Recruiting candidates is not easy. It takes time and expense to find potential employees in the first place and, having found someone worth interviewing, schedules have to be set up and managed. A lot of this can be handled by Human Resources, but there are times when you need to fill a necessary position quickly. When you work with a recruiting company, you are working with someone who is only paid for results, meaning they are only paid for successful hires. The recruiter has a strong disincentive to waste a client’s time in interviews that are unlikely to result in a hire. Additionally, recruiters have a candidate pipeline and can respond quickly to changes in your business, such as changes in the number of openings or changes in necessary qualifications.
This fee is generally a percentage of the new hire’s first year projected salary, typically around 15 to 30 percent. As compared to other types of employee sourcing and staffing, contingency recruiting is a popular choice with growing businesses because it requires a low up-front investment and limited time commitment on behalf of the business.
as with any recruitment campaign, working with contingency recruiters has unique pros and cons. Let’s take a brief look at what you can expect when using contingency recruiting.
Contingency recruiters are generally independent agents who don’t use your internal resources.
Obviously, when using a contingency recruiting model for sourcing new staff members, you will want to weigh these pros and cons carefully. There are some determining factors you will also want to consider. First, how soon do you need to hire to replace or create a new role within your company? Second, do you have enough time to screen and interview each of the candidates presented by the recruiter? Third, are you prepared to pay the fee required by the contingency recruiter if you choose one of their candidates?
An engaged search offers several benefits to both the client company and the search firm in that many of the strengths of the retained search model can be captured while at the same time reducing the financial risks for both parties. In an engaged search, the fee is typically divided into two parts. The first part (“engagement fee”) is paid at the beginning of the search and is typically one-third of the anticipated search fee. The last part (the remaining two-thirds of the search fee) is paid when the search has been successfully completed. While a client company will not get all the benefits of a retained search using this model, the results are usually more satisfactory than a straight contingency search. CSI offers customized services for specialized search assignments tailored to the needs of individual companies. Please contact us for further information.
There are 3 main reasons.
Work/Life Recruiting offers contingent recruitment services. This means employer clients do not pay until/unless they hire our candidate. We are confident that we can find the right candidate no matter how unique the need is.
Our fees, which are a percentage of guaranteed money in the first year of employment, vary based on the position, the type of service and warranty desired, the volume of expected business, and of course, the difficulty of the search. Contact us or call us at 360-799-4920 x101 for a quote.
We start by defining the open position’s responsibilities and your expectations. This information is used to create a job description that engages top talent and interview questions that separate the best from the rest. The more clearly, we understand what you want and need, the faster we can deliver qualified candidates for you to consider.
Once we understand your needs, we leverage our vast network of job seekers and use our suite of tools to attract high-quality talent to your open role. During this outreach period, you can expect weekly updates on our progress. From an initial engagement message to arranging a final interview, we handle all communication and pre-screening interviews.
With our thorough vetting process, employers receive informational packets on each candidate. Employers use these packets to reliably compare candidates against one another, identifying the best fit on objective criteria.
Recruiting is the hardest, “easy” task in American business today; it sounds simple. Just find the right resume, talk to the person it belongs to, and put them in the open job. But it’s easier said than done.
Recruiting means a lot more than just putting a person into a job. It takes time and energy to gather, and screen resumes to start the interview process. And unless you’re a recruiter you probably don’t have a lot of time to spend on sorting, screening, and scheduling. Fortunately, you don’t have to do it on your own, even if you don’t have an in-house recruiter. When you’re ready to begin recruiting, you can work with a contingency placement firm.
While there is a near-infinite specialization for recruiters, there really are just two fee structures they work under — retained recruiters and contingency recruiters.
With a retained recruiter, you are paying for the efforts of a recruiter for providing you with the right candidate. Retained recruiters are what are commonly called “headhunters.” They’re usually used for very senior positions; the kind of jobs that you wouldn’t fill by placing an ad online. Contracts vary of course, but most companies generally pay half of the recruiter’s fee upfront and the other half once they find the person for your job.
A contingency recruiter, on the other hand, is paid if (and only if) you hire one of their candidates. In other words, they are paid in the event of a successful hire. There is usually a guarantee period for a contingency placement, generally between 30 and 90 days, during which the candidate must be employed by the client to be sure they will be successful in the position. Following the successful conclusion of the guarantee period, the recruiting firm would be paid by the client.
Companies work with retained executive search firms on an exclusive basis, engaging one firm at a time. The candidates they provide are generally not interviewing with other companies and may not be actively looking for a job at all. Contingency search firms, on the other hand, may find a candidate and market them to other companies, including your competitors, while the candidate themselves may be talking to other agencies or searching for a position on their own. Under these circumstances, it’s easy to understand why there aren’t many contingency executive search firms.
Bottom line is that a retained search agency is paid for the recruiting effort, while a contingency recruiting firm is paid for the results. There is generally less cost when working on contingency, however, there are more variables and less certainty.
| Contingency | Engage | Retained |
Commitment by hiring company | Least/No | More than with contingency search | Highest level of commitment |
Commitment by recruiting agency | Typically, higher than the hiring company | More than with contingency search | Highest level of commitment |
Up-front payment | No | Yes | Yes |
Amount of up-front payment | N/A | $5,000.00 – $10,000.00 depending on the position to be filled | Typically, 1/3 of the estimated total fee |
Is the up-front payment refundable | N/A | Typically, not | No |
Payment Schedule | Full fee 15 – 30 days from the candidates’ start date. | Engagement fee is paid at the start, the balance of the fee is paid 15 days from the candidates’ start date | 1/3 of the estimated total fee is paid at the start.
1/3 is paid after a predefined performance such as submitting X # of candidates or Y # of interviews.
The balance is paid 15 days from the candidates’ start date |
Service level | Varies by agency | Closer to retained level of service | Highest level of service |
Warranty | 0-90 days Varies by agency | 90 days to 1 year* Varies by agency | Typically, 1 year |
Most Commonly Use | Non-executive positions | Executive & non-executive positions | Executive positions exclusively |
Whether you’re looking to hire or be hired, our recruiting agency offers service-oriented recruiting that is a cut above the rest. We understand our job is about people. Professional courtesy and communication are the keys to our success
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