Quantity vs. Quality, Reason #1 to Reject Contingency Search

There are many good reasons to reject Contingency Search in any form, but for today’s post, I’ll deal with only one reason. Quantity vs Quality. In most cases, by no fault of their own, recruiters are forced to produce poor quality work or get left in the dust by other recruiters with a quicker trigger finger. The inherent weakness of Contingency Search lies in this conundrum: The more you endeavor to vet and qualify your candidates, the less likely you are to get paid for your work. The take home is that if you want to get paid, you had better not take too long in skimming those online resumes and be late to the party.

A basic rule of Contingency is: If the same candidate is referred to a client by multiple recruiters, only the recruiter who FIRST sent the resume to the client gets paid for the referral. Therefore, the most conscientious recruiter will far too often lose out and not get paid for their referral. Why? Because they were too thorough in doing the job of a recruiter. Even if you want to do well on behalf of your clients, you are put in the position to have to race to the resume submission before you should. I am convinced that this is the reason that the best recruiters don’t stay in Contingency Search for long. They either convert their business to a Retained model or leave the business altogether.

Why would a client want a flurry of resumes filling their inbox only to have to spend time sorting them to determine who sourced them only to then begin the arduous task of vetting and qualifying the new resumes? Furthermore, because of the race to the bottom, they have been flooded with all the “low hanging fruit.” These are essentially two kinds of candidates; Physically Unemployed or Emotionally Unemployed. In either case, they are motivated to escape a bad situation giving them an impure motive in many cases. That severe motive can compel such people to embellish their experience and worse, misrepresent who they are in order to meet a basic need they have. If you’ve hired much, you know who this is. Its the guy who once he's hired, turns out to be a very different person than the one you interviewed.

I’ve spoken to many different recruiters who suffer burnout and mental and emotional fatigue from trying to balance doing the right thing on behalf of their clients and getting paid. Okay, money isn’t everything, but its right up there with air. So the problem for many is that they desperately desire to be a good recruiter who does excellent vetting of the people they present to their clients yet they simply cannot accomplish this and thrive or in many cases survive.

The irony in all of this is that usually the FEE for contingency is the same or close to what it would be on retainer. The main difference is the terms of payment. Yet the key benefit to working on retainer is the ability to gain a commitment from one firm with a good reputation that you believe understands your company's needs and what it takes to be successful in the position. In doing this, the company will have a slate of qualified, vetted and interested people with the right motivation that ensures the best possible outcome. This is why it is still a mystery to me that companies think that they are better off working on contingency. What a gross miscalculation!

For those recruiters who work contingency but "exclusively" with their clients, and want to argue this point, I would ask you this question: What happens if you vet a potential candidate and determine that they are not a good fit and do not present them to your client only to find out that the candidate contacts the client directly and becomes a candidate for the position you are "exclusive" on? Do you get paid regardless of the source of the hire? Or do you only receive your fee IF the hired candidate came through you?

There are so many additional reasons to avoid contingency search that it could fill volumes of books. But I have to get back to search work. Thanks for reading.

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Comment by Amy Ala Miller on May 24, 2013 at 3:54pm: You should debate this on the Recruiting Animal show with last week's guest. :) I would say he takes a different viewpoint.

http://www.recruitingblogs.com/profiles/blogs/stephen-nehez-success...

Comment by Drue De Angelis on May 24, 2013 at 3:57pm: Thanks Amy. I'll check it out.

Comment by Drue De Angelis on May 24, 2013 at 6:59pm: Wow! Amy, I am about half way through the show and this is the exact garbage that I decry. "Super-Fast, High Quality Recruiting" is an oxymoron! He sounds like a typical MRI office drone that uses an MPC to drum up business. Finds an opening, he calls a "search" and fills inboxes with resumes that are available online. He gets candidates the next day and the campaign is done in 3 days. This is fine if you are interested in bottom-feeding. But don't kid yourself into believing that Super-Fast can be "High Quality." Spamming is NOT recruiting. Thanks for the interesting tip on this show.

Comment by Amy Ala Miller on May 24, 2013 at 11:19pm: Absolutely! I ought you'd find it interesting :)

Comment by Amy Ala Miller on May 24, 2013 at 11:19pm: Sorry *thought

Comment by pam claughton on May 25, 2013 at 7:13am: This post does not in any way reflect my world of recruiting. The people who survive and thrive in contingency recruiting (over 18 years now), are the ones who know their clients, and who provide quality. What I don't care for in this post is the sense of superiority and disdain towards contingency recruiting. While there no doubt are speedy spammers who operate this way, they don't represent all contingency recruiters. Your post is full of sweeping generalizations that attempt to paint all contingency recruiters with the same brush and that's a bit lame and way off base, especially this statement,The more you endeavor to vet and qualify your candidates, the less likely you are to get paid for your work. My experience has been the complete opposite...the more I vet and qualify, the more likely I am to fill the search.

Comment by David Wells on May 25, 2013 at 4:25pm: I am always surprised when you come around and make these sweeping generalizations about a business model you continue to misunderstand.

First why would I just send the "low hanging fruit" of "physically and emotionally unemployed candidates" surprisingly enough those are not the candidates my clients want, and if that's all I sent I would basically just be an easily commodizied service and not a business partner. I know you view contingent recruiters as a commodity but my clients don't.

Second when I vet candidates (shocking right?) I have them sign a "right to represent" and that means even the few times I did have another contingent search firm blind submit a resume, I did not lose representation authority. It's a pretty simple step.

You spend so much time discussing quality vs quantity and I find your condescension in this matter amusing. I focus on different industries but only a very few skill sets this means within those skill sets I often have a much better network than the retained recruiter who is more of a generalist within a multitude of fields. This is one of the reasons we can secure searches that you probably think should go to a retained firm, because we actually produce better quality.

As I have said before you really should spend more time learning about something before you dismiss it. I could go on but I have work to do, or I guess in your eyes I have some resumes to pull off monster and blind submit. Ridiculous.

Comment by JP Sutton on May 26, 2013 at 12:18pm: I have to agree with Pam and David, this blog is the opposite of my experience in Recruiting. I can also tell you, that when I was a Regional HRM, any recruiters that I allowed to work on my open reqs, that sent me garbage just to get it in, would not receive responses from me and casted themselves into my bad recruiters black book. The ones that took the time out and understood what I wanted, got paid. If I just wanted a sourcer, I could pay a guy in India $2/hr to do so. That doesn't bring any value to the table.

Comment by Drue De Angelis on May 27, 2013 at 1:29am: Folks, I realize there are many different forms of recruiting. Let me explain where I am coming from. I started in the business in 2000 when I purchased an MRI franchise. I was surprisingly successful by their standards and won multiple President's awards and such. I had as many as eight recruiters working for me at one time and we did well financially. Yet, I truly hated the business. We had all the right metrics and ratio's. Although the business was successful financially, I was frustrated because although we had some good clients and plenty of job orders and send outs, our average fee was around $27k and we had to deal with every conceivable hassle that you get used to in contingency search. ( I guess I never got used to it.)

Here is a partial list of the stuff I dreaded about my job.

1. Searches that go away due to a variety of reasons, but not until AFTER we'd spent a lot of time working on it.

2. Problems collecting money because we were one of two or more recruiters who presented the client with the same resume. The candidate had "no idea" how it could have happened.

3. Candidates quit days or weeks after we placed them because they liked another position that they were concurrently interviewing for better. (sometimes we knew they were interviewing elsewhere, sometimes not.)

4. Clients went dark and didn't follow through as promised. (Constant delays and restarts)

5. We searched for weeks and even months and didn't make a placement.

6. Having to work on a lot of searches simultaneously because you didn't know which ones would close. (No one closes anywhere near 100% of their contingency searches. This causes you to stay shallow on your search based upon pure "bandwidth" and self protection.)

7. We had clients who yanked our chains and didn't return our calls etc.

8. An incredible sense of "no control." I think you get the idea.

(the list goes on, but my blood pressure is increasing just thinking of it.)

Prior to recruiting, I came out of an industry where I was a valued partner to surgeons in complex surgical cases and enjoyed their respect as a peer. Entering into the recruiting industry as a contingency recruiter was a harsh reality. It was a demotion of epic proportions. Going from working with professionals to now dealing with "gate keepers" and HR people who really don't know what they don't know. The myriad MPC calls and cold calls, the phone time/call software. Managing minutia... Don't get me wrong. It all works and you can make a very good living doing it. It just wasn't for me.

I prefer to have clients make a solid commitment to me and retain my services before I work on a search for them. I prefer to have them return my calls 100% of the time and respect my time as much as I respect theirs. I also care about my clients and am grateful to be allowed to partner with them in the strategies and solutions to big problems. I have their respect because I earn it and because I can also articulate the distinct value proposition of retained search. I believe it is always in their best interests to retain me to do a search rather than hire someone with a lesser commitment. If you now want to tell me that you will do the same level of search work on contingency for your clients, my first answer is, no you don't. You may think you do because you've done some retained search. However, if you really did, you wouldn't want to work any other way. Retained search is far more rewarding and satisfying than contingency search. It is also the best way to ensure that your priorities are the same as your clients. If you were actually doing the same quality work on contingency as a good retained search consultant, and I say good because there are plenty of lousy ones too, you would be grossly underpaid for your work. But if you are doing retained quality work for lower fees and without a guarantee that you are getting paid, then I feel sorry for you. Because companies will pay up to 33% of total compensation for excellent search work. You don't have to work for 20 or 25% of base salary or on contingency. But if you like discounted not get paid on some of the searches that you worked on, more power to you. I know that you can make a good living doing it, and if that is all you want, it's your loss.

If that makes me "holier than thou," or "arrogant" then I guess I am. I don't apologize for making the transition from Contingency to fully Retained and taking my average fee from around $30k to over $100k. I honestly thought that this site was for people to encourage each other to get better and not merely for congratulating themselves for maintaining mediocrity. But suit yourself.

I've blogged on this a bunch at www.druedeangelis.wordpress.com and I've helped several contingency folks make the transition. It isn't easy which is obviously why so few of you seem to do it. But I for one, wouldn't be in the recruitment business if it was contingency.

Good luck to you all!

Comment by David Wells on May 27, 2013 at 4:20am: Your response says it all. Because your personal experience at MRI was not what you wanted, you took your anecdotal experience and applied it to an entire business model. This could be considered a narrative fallacy.

It never occurred to you that people could choose contingency search over retained, while not discounting their fees and not not dealing with the aggravations you detailed.

You are correct that this site is for people to learn, share information and " not congratulate themselves on maintaining mediocrity." But choosing (I know you find that shocking) to work as a contingent recruiter is not "maintaining mediocrity." And the fact that you assume that all contingent recruiters operate in the fashion you describe speaks volumes about you, not us.

You mention money and fees so much I can only assume you basically treat your clients as an ATM machine and not as a business partner. Odd considering what you think of us.

Finally I love that you say you are not arrogant and then in the next paragraph state that you have helped "several contingency folks make the transition" as if us contingent recruiters are just waiting for the chance to go retained. Sorry to burst your bubble but many of us choose this career and I am happy to keep running up against people like yourself and taking their business.

Good luck to you.