What Is Contingent Recruitment and How Does It Work?

Contingent recruiting is the process of partnering with a contingency recruitment agency to help you find the best candidate for a position. The twist is that you only pay for the services if you hire the proposed person. 

This type of recruitment outsourcing can save you time, energy, and money. Since you only pay if you are happy with the service, it is a win-win situation. 

In this post, we explain what contingency recruitment is, how it works, and the advantages and disadvantages of working with a contingency recruiter. 

What Is Contingent Recruitment?

Sometimes also known as “no win, no fee” recruiting, working with a contingency recruiter can help you fill your vacancies with highly qualified candidates. 

Because you only pay the fee if you hire the suggested candidates, a contingency recruiting agency will be extra motivated to ensure the service delivered closely lines up with your specific requirements. 

Contingency recruiting is a reliable way to ensure that your investment will get you top talent that is guaranteed to hit the ground running and integrate seamlessly with your teams and company culture.

How Does Contingency Recruiting Work?

Contingency recruiters find and recommend talent for your business under the agreement that they will not receive payment for services provided until finding a qualified candidate who accepts your job offer.

The contingency recruitment process normally entails the following steps (this is highly dependent on the specific methods of the staffing firm):

1. You send the recruiter a job description for the open position.
2. The recruiting agency will then negotiate a fee that you will pay upon the successful completion of the assignment.
3. The agency begins the search for a viable candidate.
4. Once the recruiter finds suitable options, they send them to you for review.
5. If you end up hiring someone the recruitment firm provided, you pay the agreed-upon fee.

It’s worth noting that, normally, the contingency recruiter doesn’t handle the search for top talent alone. Your human resources specialists and other staffing agencies may also be involved in the process. 

With multiple parties working toward the same goal, it will be that much easier and more cost-effective for you to find the ideal candidate for your business. 

Advantages of Contingent Recruitment

Opting to use contingent recruitment to fill your next vacancy is an approach that comes with clear advantages for your business:

• No upfront costs means you have greater budget flexibility. 
• It is one of the most cost-effective recruitment solutions since you only pay if you are happy with the result.
• Using a contingency recruiter can help reduce the workload of your in-house HR specialists, freeing them up to focus on other essential tasks.
• Contracts have no exclusivity clause, meaning you can hire multiple contingency recruiters to get the job done.
• If you hire the candidate put forward and they do not pass their probationary period, you can lower the contingency recruiting firm’s fee.
• Many contingency recruiters also offer guidance on salary negotiations. 

Disadvantages of Contingent Recruitment

It’s also critical to consider the possible drawbacks to this model of recruitment, which can include the following:

• As time is of the essence, a contract recruiter may end up focusing on quantity to the detriment of quality.
• A one-time fee can be out of reach for some businesses, particularly start-ups. 
• The lack of an exclusivity clause goes both ways. Contingent recruiters may present the same candidates to multiple businesses. This means you may have to act fast to avoid losing skilled talent to your competitors, especially considering that top candidates are only on the job market for an average of 10 days. 
• You might end up paying a fee for a candidate who won’t stay at your business long.

Frequently Asked Questions

Here are answers to some of the most frequently asked questions when it comes to contingent recruiting.

What are the differences between contingency recruiters and retained recruiters?

When you use a retained recruiter, you will need to pay an upfront fee and agree to an exclusivity clause. This means they will dedicate all their efforts to your recruiting needs. 

Contingency recruitment, on the other hand, works on a “success fee” model. This often means that the recruiter will try to fill the vacancy as soon as possible.

What is the difference between RPO and contingent recruitment?

Recruitment process outsourcing (RPO) operates on a different scale than contingent recruitment. The end goal is still the same—to connect you with top talent that can add value to your organization. But how RPO and contingent recruitment achieve this is what makes them different.

RPO is a strategic partnership whereby your business gives an outsourced recruitment agency a certain level of control over your recruitment process. 

This means the provider makes a long-term commitment to use its proven expertise in the market to streamline your hiring process, optimize your workforce planning, and determine the right recruitment strategy to ensure your company’s  growth and success in the talent market. 

An RPO provider can achieve all of this because it uses a more in-depth and strategic talent acquisition method. It also incorporates advanced recruitment technology to source the right candidates and takes time to gain a comprehensive understanding of your company’s culture and goals.

On the other hand, contingent recruitment is more focused on finding a candidate as quickly as possible to fill a specific vacancy. Generally, contingent recruiters do not spend as much time studying your company’s mission and long-term plan for business growth.

Contingent recruitment agencies are best used when you need to fill a role quickly and want to use your budget allocated for recruitment wisely.    

What is the difference between executive search and contingent recruitment?

The biggest difference between contingent recruitment and executive search is the scope and depth of the search they perform to find potential candidates for companies. Additionally, an executive search firm focuses specifically on sourcing top talent for senior-level positions.

This type of agency brings a wealth of experience and resources and takes the time to develop a deep understanding of your business and unique requirements. 

It then uses this extensive knowledge to identify suitable candidates for senior positions who can help you drive your business forward and shape your company’s future. Due to their more active approach to the recruitment process, executive search firms also tend to have higher fees than contingent recruiters.

Final Thoughts

Contingent recruitment can be an efficient approach when time is of the essence and you need someone to take on a role immediately. Moreover, it can be a cost-effective solution when you have a limited budget.

Another time-saving recruitment method is using a nearshore outsourcing platform like Near. We source carefully cultivated candidates based in Latin America to help fill your vacant positions with top talent in under 21 days. And, similar to contingent recruitment, you only pay when you make a hire and are satisfied with the candidate we sourced for you.

Learn more about the benefits of this approach, including savings of 30–70% on salary costs, in our guide to nearshore outsourcing.