Contingency Recruiting

In recruiting, the word contingent refers to a contract recruiter or agency’s commission being dependent (contingent) on their ability to fill a position for a company. With contingency recruiting, a contract recruiter or recruitment agency earns a fee only if a company hires a qualified applicant referred by the recruiter or agency. A standard recruitment fee is 20% of the salary of the filled position, but this percentage may vary. 

The six steps below are an outline of how contingency recruiting may look. 

1. The organization provides the job description to the contingency recruiter. Hiring managers or supervisors outline the types of candidates they want to source and review the job description with the recruiter. 
2. The contingency recruiter and hiring organization agree on terms such as fees and deliverables, including how long the candidate search should last. At this stage, both parties may sign a contract. 
3. The recruiter or recruiting agency contacts prospective qualified candidates. Discussions with candidates can take place via in-person meetings or virtually. Common communication channels for candidate contact can include social media, email, phone, and video meetings and pre-screenings. 
4. Qualified candidates submit an application or resume to the recruiter, which is then passed on to the organization’s hiring manager. The recruiter begins the process of preparing to bring the company and the candidate together. 
5. The employer chooses prospective candidates to interview. Ideally, the company will hire one of the recruiter’s proposed candidates. 
6. A selection is made, and a candidate is offered employment. If the contingency recruiter or agency sources the candidate who fills the open position, the recruiter and the company sign a legally binding contract. The recruiter or agency receives payment once the candidate is hired.

Frequently, recruiting agencies are competing with a company’s in-house recruitment department. Candidates may apply for a position via an online job posting or a company’s website. In this case, the contingency recruiter doesn’t receive a sourcing fee. Companies can also work with multiple contingency recruiters to increase their chances of finding the most qualified candidate. 

Example:

A company needs a team manager who will lead a new department within the organization. The company posts the job posting on multiple job boards, but to find the most qualified individual, they also hire a contingency recruiter to increase their chances of finding the ideal candidate to fill the position.