Contingency or Retained Recruitment
Contingency and retained recruitment are different ways in which recruitment agencies and consultancies work.
If you are looking to hire new talent, you might be thinking about how best to go about this. No doubt, you’ll be asking should we outsource to a recruitment agency.
If this is a consideration, then you should also be asking how do I want to work with a recruitment agency.
Let’s take a look at the difference between contingency and retained recruitment models.
Contingency recruitment is similar to the “no win, no fee” advertisements you hear from time to time. This means that the recruiter only gets paid when they have found the client a suitable candidate.
It is often deployed when the recruiting company wants to cast the net wide and will work with multiple agencies. They may even be using their own recruitment methods also.
Retained recruitment is the opposite where companies will work with a consultancy on an exclusive basis. This can also be referred to as headhunting, executive search or search and selection.
It will usually involve an upfront fee to conduct the search, a payment on the production of a candidate shortlist and then a final payment when they find a successful candidate.
The retained model allows for a greater one to one consultative process. This enables the consultancy to understand their client’s culture and requirements. Which, in turn, improves the likelihood of finding candidates who are a good fit with the company and job profile.
The Pro’s and Con’s
With both models, there are upsides and downsides that the recruiting company should consider.
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The Pro’s for Contingency Recruitment
- Casting the net wide may invite more applications.
- The fees are only paid when a successful candidate is found for the client.
- It is generally a cheaper method of recruiting.
The Con’s for Contingency Recruitment
- Recruitment agencies are less likely to prioritise their time on contingency models. This is logical when you think about it. Time allocation will be less if there is no guarantee of payback for your time.
- It places an emphasis on volume rather than quality.
- It does not always provide the best recruitment experience for the candidate. For example, the candidate may not receive the personal experience they would expect. They may also be put forward for roles that do not suit their CV and become bombarded by multiple agencies pushing a CV forward for the same position.
- Working with multiple recruitment agencies can be time-consuming for the recruiting company. The communication is likely to become more “sales” led than consultative.
The Pro’s for Retained Recruitment
- The exclusivity the consultancy receives will ensure they undertake greater due diligence throughout the process.
- Both the recruiting company and candidate will receive a consultative process. The recruitment consultancy will work with both client and candidates to ensure both are a good fit.
- This will create an increased likelihood of finding a better-quality candidate
- The recruitment process is likely to be more transparent. Transparency from the recruiting company as well as the consultancy.
The Con’s for Retained Recruitment
- It is likely to be a more expensive process.
- The process can sometimes be slower. This is because the focus is on finding the right candidate and not trying to find a candidate as quickly as possible.
- The client may need to provide the consultancy with more information than they are used to with a contingency model.
When to Use Retained and Contingency Recruitment
Firstly, it depends on the needs of your business and the role you are recruiting for. It also depends on the resource and time you have within your recruitment department.
Contingency Recruitment can work well for junior roles or positions that require less staff screening. Jobs that can be easily trained or requires less qualification and criteria is a good example of this. Therefore, casting the net wider can be a more suitable approach.
Also, it can work well in markets where there is plenty of demand for the role. Knowing that there are plenty of available candidates to choose from, then contingency can be applied effectively.
Whereas retained recruitment is better suited to senior, hard to fill, niche and higher salary roles. These positions require greater screening and identification of not only the right skills and qualifications but also the right personality traits.
Senior members of staff are responsible for embedding the company culture throughout the organisation. Therefore, a thorough screening process is required to ensure they fit with the company culture.
Specialist Recruitment Works Well with Both Models
In either scenario, working with a specialist recruitment agency can help you to understand which model is best applied to your industry.
With having an in-depth knowledge of the industry, the recruitment agency/consultancy can advise if there is a crowded job market or if a targeted approach is better.
Their experience will often reveal which method often finds the right candidate that best suits your needs.
Sigma Recruitment provides specialist recruitment and talent attraction services for companies in Cardiff, Swansea, Newport and the rest of South Wales. But we also specialise in Technical, Engineering and Manufacturing Industry Sectors nationwide.
To see how we take a consultative hiring approach with our clients click here