Contingency placement: The recruiters craps shoot

We all understand gambling (i.e. the house wins) and its high risks and long shot rewards, but what many people don’t understand is that most recruiters do it everyday and lose.

Contingency search is the bread and butter of our industry allowing companies to view prospective candidates and only incur a fee if they hire the candidate and on the surface it looks like a win-win. However, with the state of the economy many companies are unintentionally using this search model against recruiters by first engaging their services, and then sometime into the search (when energies and efforts have already been expended) they pull the job requisition, put the search on hold or worse yet decide that after interviewing your candidates they really just can’t pay a fee.

Now every recruiter should be schooled in qualifying a job order, but the best and fastest way that we’ve found to qualify one in this market is to ask the company to share in the risks by moving it to a retained search (or some form of up front engagement fee). This instantaneously crystallizes a companies thinking and sincerity to fill this job while also putting the recruiter into a search were they have very little if no competition, and let's face it who among us can argue with that in a market with fewer jobs.

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Comment by Faisal Javed on December 3, 2008 at 8:29pm
Here you are!
I did face the same thing with some clients. First they were very eager to interview candidates but after sending some of my experienced soldiers to 'em, they were out of the field. They didn't revert to those candidates OR to me for further perusal and I found myself in the middle of roads. That time I thought to wrote about them and names all those companies who are doing this so that other recruiters can take care before proceeding with them.
Comment by bill martineau on January 12, 2009 at 1:38pm

Fine points, and all true, but the focus of the article was to remind recruiters that contingency cuts both ways. Because companies have nothing vested in the relationship (no up front money) recruiters can get caught working on jobs that disappear and they are then left out in the cold with nothing but 2 or 3 candidates for which they have no jobs.

Our job as contingency recruiters isn’t to walk blindly to the beat of the company drum, but to work the best jobs available that also have the best chance for us to fill them. So while it may be a great job at a great company and we may have a fine working relationship with them and a solid track record of placements if the company is in a poor financial position than you need to know that, be realistic about it, and most likely start searching for more stable jobs and clients to work with now.


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