5 Reasons Contingency Recruitment is Broken and How to Fix It

contingency recruitment is broken

If you’ve ever used recruiters, you know that contingency recruitment needs to be fixed. There are so many issues with it, from the low quality of candidates to the need for more accountability.

But despite all of these problems, contingency recruitment is still the most popular model in use today. Why? Because it’s the only model that most businesses know.

This blog post will show you why contingency recruitment is broken and how you can fix it. By the end of this post, you’ll know exactly what to do to improve your recruiting process and get better results.

Problems with using contingency recruiters

Quantity over quality

Using contingency recruitment can lead to poor results as recruiters are often incentivised to source large quantities of candidates irrespective of their quality. Additionally, even when a suitable candidate is found, you will still have to do the time-consuming work of reviewing CVs, determining who to interview, and performing the interviews. This can lead to significant inefficiencies in the hiring process.

Lack of accountability

The lack of accountability issue with contingency recruiters is a critical problem when finding the right talent for a job. On the one hand, the traditional contingency recruitment model is structurally unsound because the incentive structure is flawed. Even the best recruiters aren’t going to fill every role they acquire, meaning they are working for free a lot of the time. On the other hand, there is little incentive for employers to invest more time and energy into a relationship with yet another recruiter who will likely not fill the job.

This makes holding the recruiter accountable difficult as there are unlikely to be service review meetings or performance updates.

Expensive service

Compared to a retained recruitment service, a contingency recruiter may appear to be a cost-effective way to fill lower-level or urgent positions, as the fees typically range between 12-18% of the annual gross package paid upon successful placement or probation period.

However, any savings are lost and can even cost your business more when you consider the time taken to screen large numbers of candidates’ CVs and the time it takes to conduct various interviews or assessment days, depending on your recruitment process.

Poor levels of commitment

The risks of lacking commitment when using contingency recruiters can be significant. As recruiters often do a lot of work for no return, they are less likely to be motivated to perform at their best.

As discussed above, this could lead to inefficient outcomes, such as many candidates being sent lacking the necessary skills or experience. Candidates can also be submitted for several roles at once, creating competition, driving up costs and generating a potential conflict of interest if multiple employers want to make offers to the same candidate.

Furthermore, the recruiter may be working on multiple openings simultaneously to increase their odds of success, which can lead to delays in hiring. 

Misalignment between businesses

The main difference between a retained exclusive recruitment partner and a contingency recruiter is the lack of a long-term partnership. With a contingency recruiter, there is a race to the finish line. There is more of a focus on filling seats than on the overall success of your business.

Alternatively, a retained exclusive recruitment partner is invested in the success of the recruitment process, as it is a partnership in which their success is connected to yours. They have time to go out and find the best candidates and vet them and have space to consult with you on what the market is like, identifying problems and advising you on the best approach.

They focus on building a team for the future and making your business successful. With an exclusive relationship, there is a higher cost per placement, but it’s worth considering the much greater cost of hiring the wrong person.

How to fix the problems with using contingency recruiters

Step 1: Do your research – Before deciding to work with a contingency firm, vet them first. Ask them what their process is, what their qualifications are, and how they hire and evaluate candidates.

Step 2: Avoid the quick fix – Ensure you only hire quality candidates that fit your company culture and have the right skill set for the role.

Step 3: Establish a partnership – Establishing a partnership with a recruiting agency with a good track record and a proven process is essential. Look for agencies that take the time to get to know your company and its culture so that they can provide tailored solutions.

Step 4: Refine your requirements – Make sure you clearly understand the qualifications and experience required for the role. This will help ensure you provide a detailed brief to your recruiter and avoid wasting time on candidates who are not suitable for the job.

Step 5: Focus on reducing attrition – A recruitment partner should be focused on lowering candidate attrition rather than just finding the right person for the job. A successful recruitment agency will work to identify the best fit for the role and ensure they stay with the company for the long term.

Step 6: Re-evaluate – Schedule regular service reviews and keep track of the agency’s performance. Don’t hesitate to switch agencies if necessary.

What factors should you consider when selecting a recruitment partner?

When selecting a recruitment partner, there are certain factors to consider before making a decision. It is essential to weigh the advantages and disadvantages of both contingency and retained exclusive recruitment, as they both come with benefits and drawbacks.

One of the key differences between the two is the speed of recruitment. Contingency recruitment is usually the faster option, as there is often a race to the finish line between recruiters to secure the job. However, with retained exclusive recruitment, the recruiter is given the time to properly vet and identify the best candidates, which is essential for finding the right person for the job. This can take longer but can be worth it in the long run.

Another factor to consider is the cost. Retained exclusive recruitment tends to be more expensive per placement. Still, it can often be worth it because of the reduced risk of hiring the wrong person, as well as the expertise that comes with the recruiter. Contingency recruitment is generally cheaper, but this cost-effectiveness is offset by the increased risk of hiring the wrong person. 

Finally, your trust level in the recruitment partner is an essential factor to consider. Look for evidence of their results when working in a retained exclusive partnership with businesses like yours. It is also vital to ensure that they will take the time to understand the role properly so that the candidates they send you are more likely to be a good fit.

If you’re looking for an expert recruitment partner who can help you find the best candidates for your business, contact us today. Our market inspiring fee solutions, comprising of both retained and contingency inspired options are both designed to reduce cost per hire and revitalise your hiring experience. We can help you avoid the pitfalls of contingency recruitment and find the best candidates for your business.