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 JP Sutton on May 27, 2013 at 10:12pm: Hey Drue,

I appreciate your insights on Retained vs Contingent Recruiting. And I have to say that they are interesting none the less. However, I would be curious on your thoughts of hourly staffing? If placing mid level positions with 20k fees is mediocrity, then staffing out $10/hr jobs must be like charity work to you.

I don't mean to be ugly, but I think that individuals which speak downward towards others and their career paths have a lot to learn about humility and life in general. You see, even the lowest level of employees has a part in the biggest of businesses. No one here thinks that placing high level candidates on a Retained search is a bad thing, on the contrary, I would love to learn more about that end of recruiting, just because its interesting to me, not because I want to change what I am currently doing, in lieu of it. I am doing pretty well where I am at today and accept all the aforementioned issues that you described previously. I would have to say that I have encountered some of those same issues myself, but not to a large, overwhelming extent - It's just Business...

Where I'm going with this is, You shouldn't think that a certain level or type of Recruiting determines an individual's KSAs or financial earnings. On the contrary, I know more wealthy people that own staffing companies than I know own a Retained or Contingent Search company. There is money in all levels of recruiting. I myself have also recruited and placed talent on every level of business imaginable, but you will never see/hear me speaking negatively of one level, calling it a lesser area of recruiting, that's just un-wise. They all matter, and are relevant, or they wouldn't exist, especially 20 Billion dollar staffing companies. Again, I'm not trying to convince you that your line of recruiting is anything but great, I'm just saying, don't tell others that theirs isn't.. Bests.

Comment by Drue De Angelis on May 27, 2013 at 11:57pm: Jim, I appreciate your thoughtful response. To answer your question, I used to do some contract staffing in the past during the MRI days, but haven't done hourly contract staffing since. We do place consultants with our clients now which is similar to an extent, but we do that on retainer as well.

To your other remarks, I would agree that recruiting in all its forms has its place. I don't mean to talk down to anyone but I am very passionate about the quality of work I do and the quality of the relationships I have with my clients. When you find something really significant that positively impacts your life, don't you want to share what you've found with your friends? My motives are two fold, 1. To see our industry improve its reputation. and 2. To help people find out new ways to improve their professional performance. That is just who I am. I would say to anyone interested in reaching up and attaining a better way of conducting business that it is in reach. I am fortunate to have "cracked the code" to build a retained search practice. I went from hating this business to loving it. Why would I not want to help others find the path. Perhaps my method is crude, but it is hard to convey all the info in a blog. But, if I am causing people to think about it, maybe that is the first step. If people are "dug in" and stubborn, then they can just stick with what they're doing.

I'm happy to discuss this more off line anytime.

Comment by Matt Woods on May 29, 2013 at 8:35am: Having only just signed up to Recruiting Blogs, I am slightly late in joining this conversation. However it is timely for where I am currently at and certainly presses on some of my current frustrations. I am currently in the process of moving from contingency – retained, although I am stuck at the halfway house of working exclusive assignments.

I’ve read through the comments and as being at that half-way house, can understand everyone’s viewpoint however I find nothing more frustrating than taking time to interview and fully understand a candidate to only find out that the client already has the resume. I agree we can ask candidates to sign a ‘right to represent’ however in the UK market candidates are reluctant to do this and we end up having to fight over candidate ownership which can damage the relationship with the client and certainly does our reputation as recruiters no good.

On this point, I think a large part of this debate must come down to the market/ industry that you work in and I’m a firm believer that specialist positions require a specialist approach. One solution for me may not necessarily work for you (and vice versa), however for my business I believe the retained business model is the way to go.

Comment by Jacqueline Bozorgi on May 29, 2013 at 10:15am: Interesting article. I recruit on a contingency basis, and can tell you right now a lot of what you are saying is wrong. I've spoken to a lot of clients who have hired a retain,net firm only to not have any applicable results, and were still out the money. When you hire me, you hire me for results, not labor.

1. The candidates I recruit are not typically physically or emotionally unemployed. Sometimes they take quite a bit of convincing to move to another opportunity and are generally happily employed.
2. I also focus on quality over quantity. Just because I will sometimes sign contingency contracts doesn't mean I am going to bombard my client with endless resumes. I source and screen quite a few people before I send my clients my best guy/gal.

The last question surprised me. If I find out that a candidate who I determined was not a good fit went directly to the client and is being considered, then I am not doing my job correctly if I disqualified a decent candidate.

Comment by Stephen Nehez, Jr. on May 29, 2013 at 11:40am: FABULOUS ARTICLE! This is exactly the kind of material that fuels our success. And let's remember how long humanity believed the world was flat. With respect, Drue, you are incorrect. The reason why is that there exists two constants and equalizers in our field that will never change: (1) OUR presented candidate must be offered a job and (2) OUR presented candidate must ACCEPT the job. If both of those don't exist, there's no placement. That exists whether you are placing temp employees, C-level, or individual contributor professionals.

As you've stated in some of your remarks (after the earlier comments where you insult my office by referring to us as "garbage" and calling me a "drone"), you correctly admitted there are, indeed, different approaches in recruiting. (....to reiterate the obvious.)

The automotive industry was incredibly devastated by many factors a few years ago and tens of thousands of automotive professionals were displaced in relatively short period of time. At the same time, the State of Michigan ranked 49th and 50th in unemployment in the country. Some of these people left and some stayed put in their homes with market values half of what they owed on their mortgages. As time has proven, every automotive downturn in history has been followed by an upswing in hiring and recuperation of the industry.

Big-brand automotive suppliers such as Lear and Delphi were flooded with tens of thousands of resumes. HR departments throughout the industry were reduced and reorganized. As often the case, an HR department is taxed with attempting to manage hiring and all of the other HR activities. At the same time, Engineering Managers, for example, have been left with tinier departments struggling to manage increased R&D activities.

Our audience on the client side is two-fold: The Manager seeking a superstar and the HR person who wants the requisition filled.

Unfortunately, if you take a couple of parts like an engine bushing versus an exhaust bushing, they are incredibly different. Engineers who specialize in one versus the other are NOT interchangeable. Hence, this creates a very competitive environment for recruiters.

In this example, an e-mail blast to engineers having done bushing design would potentially yield our targeted candidates. However, we can create an even more robust campaign by combining the e-mail blast with other techniques and tricks (which I don't feel compelled to outline) to surface even more potential candidates.

At that point, there is no other option but to contact candidates one-by-one to determine if they have the targeted bushing experience that's required. This can be a tough and tedious task for an internal recruiter or HR generalist. Remember, only a small number of the approximately 3,000 automotive suppliers have the resources for internal recruiters or HR sourcing specialists.

And by the way, the stressed out Engineering Manager doesn't have the time or resources to train an engineer from scratch on the complexities of their engineering process, the design process, the validation and testing that has to be completed, and finally, the acceptance from the customer.

I'm sure you own a car. So do I. So my 15 year old daughter will soon have her permit. See. If an exhaust bushing fails, the muffler falls off the car. No biggie. However, if an engine bushing fails, there's a pretty high probability that you could die, hurt, or kill someone.

Our system identifies these people faster with high quality results. It works. If I was building a spaceship in my backyard to fly to the moon out of used parts from the garage, I don't think I would be volunteering to talk about it on a radio show.

Also, it's been quite an experience for all of our recruiters who speak each day with engineers that you refer to as "physically unemployed" or "emotionally unemployed". These people are devastated and we take a few minutes to see what we can do or if we can point them elsewhere. Keeping with my example, someone that has spent 20 years designing engine bushings may not know how to job hunt, especially after they feel betrayed by an industry they dedicated their lives to. Maybe you can imagine the joy when we, yes, MPC market that person into an engineering department that could use that experience. I don't think he would feel like "garbage" and I don't think he would consider our recruiters "drones".

The MRI Manager who taught me how to recruit and who taught me how to train recruiters played football under Lou Holtz. That means I was only one degree away from learning Lou's competitive teachings, best practices, and able to apply them into our field of expertise. I'm thankful for that.

You could be on to something but I want to be clear that the "quantity" side of my office activity simply involves broadcasting open JO's and NOT the submission of candidates. However, we do have clients with very large R&D operations that seek engineers on a more mass basis. The "quality" side of that type of search may involve other intrinsic aspects that must be communicated by phone. I suppose we're chameleons in a way. Chameleons. Not ambulance chasers. We speak with over 2,000 candidates per week to find a handful of them a new opportunity. We're not apologetic of our system and we have yet to have a client or candidates criticize it.

I believe our earnings are as green as yours.

Steve

Comment by Barbara Goldman on May 30, 2013 at 10:36am: Interesting post. Contingency search is survival of the fittest, you have to be fast. Contingency search is also more effective if highly specialized. We are highly specialized. So, contingency works for us. We are a retained firm, but not exclusively retained. We'll take good business. The problem with retained search is the protracted effort in marketing retained services. I get bored with the process. Because of specialty, we have candidates, which is the point. We can usually fill a position faster than we can get a retained contract approved.

Every office is different, and it all works. Retainer is good, and contingency is good.

Don't assume that contingent recruiters are all the same either.

One other thing, in 2013, we have filled two positions that were on retainer with ANOTHER FIRM. In both cases, the retained company failed to produce qualified candidates after six months. The decision was made to hire our candidates and pay us in addition to whatever retainers were paid. Doesn't mean that retained firms are bad, but looks like in those two particular situations it didn't work out.

Comment by Seth Lidren on May 31, 2013 at 1:32am: I don't really know many of your on here outside of the few posts that I've participated on and what you write. However, I must say, cat fight.

First, who the hell cares? Recruiting is Recruiting is Recruiting. Regardless of it all, we are all recruiting. Some have different methods than others. Some are only in it for the money. And some just suck. But hey, we are all doing what we feel is recruiting, right? If you call yourself a recruiter, you do the best that you can, and are successful by your own standards (and the organization you are with)...screw the rest.

This post is what's wrong with you agency folks. You think you're King Midas, turning everything you touch to gold. Try once doing something for your client, for your candidate, for your firm without thinking about the money at the end of the line (or in retained cases, half up front, half after the job is completed--it's like your a hitman for the mob or something). Seriously, try it once. Hard to forget that $20K-100K, huh?

If you want to educate, then wax knowledge and philosophy. But don't disguise some sort of misplaced aggression towards either line of agency business as "education". That goes for both sides of this argument.

With respect,

Former contingent recruiter

Former hourly recruiter

Overall--Recruiter

Comment by Sandra McCartt on May 31, 2013 at 10:34am: The reason narcissists are so difficult to be around and deal with is that they truly don't understand that when they are unhappy not everybody shares their angst or need to be the center of the universe. Neither do they understand that when they find a spot where their damaged ego can be fed as they need it to be,not everybody needs or wants what makes them happy. In either state of being they are simply irritating.

Comment by Jerry Albright on May 31, 2013 at 11:59am

Comment by Linda Ferrante on May 31, 2013 at 1:36pm: Drue, I'm really glad you posted your brief story so we could better understand you and your situation. After reading it I would say that you were clearly in the wrong position, wrong industry. I'm a little concerned that your intro to the industry was after 'purchasing' a franchise. I'm glad you won awards and all, but what did you think you were getting into?

Some of the points you mentioned probably have to do with the way the organization was run. What was required, expected, their method of doing business, etc. Maybe, going forward, these are questions you will ask before jumping in and purchasing something that isn't a good fit for you.

All that being said, I love my career as a recruiter. The important thing is to find the process that works for you and your clients. If the two conflict, you will NOT be successful.

I do find your attitude about contingent recruiters to be quite disrespectful. It's didn't work for you, but it DOES work. It works for those who work hard at it and can produce. Please don't discount the hard work of others because you think you found a better mouse trap. Different personalities succeed better in different environments. To be disrespectful about it says volumes.