What is Contingency Recruitment?
Contingency recruitment is a recruitment method in which an organization hires an external recruitment agency or recruiters to find candidates for their open positions. In this approach, the recruitment agency or the recruiter only gets compensated if the candidate they found is successfully placed in the desired position.
The recruiting agency gets paid a percentage of the agreed salary of the hired candidate. The meaning of contingent here is (dependent) as the recruiting fee depends on finding a candidate that gets hired and fills the vacant position.
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Benefits of Contingency Recruitment
For an organization, there are multiple benefits of contingency recruitment. Some of the most common ones are:
- The company only pays for the hired candidates, so it saves costs.
- The business must only pay a one-time fee instead of keeping recruiters or recruitment agencies on the payroll.
- This kind of recruiting is result-oriented, as recruitment agencies and recruiters put extra effort into finding the most eligible candidates for the open roles.
- It also saves time as the organization does not have to go through hundreds of resumes for a single position.
- There is no upfront fee.
- There is no exclusivity, as the business can work with multiple contingency recruiters simultaneously.
- As more recruiters and recruitment agencies are involved, the organization gets access to a larger pool of talent.
What is the Difference between Retained and Contingency Recruitment?
The biggest difference between retained search and contingency recruitment is that the recruitment agency gets an upfront or scheduled fee in the retained search. They also get an exclusive contract where only they manage the entire recruitment operations for the organization.
In contingency recruitment, the scenario is entirely different, as the recruitment fee is contingent on the placement of the candidate. In addition, there are no exclusive contracts, and a business can utilize as many contingency recruitment agencies or recruiters as they want.
Another significant difference to note is that contingency recruitment offers more flexibility, while retained search offers a more customized and personalized approach.
Contingency recruitment is ideal for filling positions where the budget is limited, or there are no immediate joining requirements.
Retained search is ideal when a position needs to be filled immediately or if the position is of a more senior level.