The Problem with Contingency Staffing

Posted by Brian Hamilton on Jun 16, 2015 2:10:11 PM

The contingency staffing model is one of the most common choices of talent acquisition for growing businesses.  A contingency agency is a search firm that is paid when their candidate is hired by the employer on a permanent or contractual basis. It is a high volume business so they often serve direct competitors for the same positions. They collect many resumes from sources like databases, job postings and others, and then send them as quickly as possible to multiple clients before their competitors do. It requires little to no up-front cost and you only pay a fee if a firm makes a placement. Although with that being said, it can be an expensive way to fill your need if you have multiple positions to fill. Some problems with the contingency staffing model are:

  • Fees can be high, up to 20 or 30 percent of the candidate’s annual salary.
  • There is no guarantee that a successful placement will be made by an agency.
  • Contingency recruiter’s priority is to make money the quickest and easiest way possible. This means they may not invest the same amount of time, energy and resources on hard-to-fill positions. 
  • Contingency recruiters are most likely working with multiple clients at the same time and are most likely presenting candidates to multiple clients in order to maximize chance of earning a fee.
  • Difficult to hold the recruiter accountable for results and weekly review.
  • Difficult to hold the recruiter accountable for untimely results
  • If a new hire doesn’t work out there is usually a limited time period of about 3-6 months to receive a full or partial refund

Do you have experience with contingency staffing? Let us know about it in the comments. 

Topics: Recruiting