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Contingency Vs. Retained Recruitment

Most people don’t realise there are two types of recruiter out there in the wild. There are those who work on a retained basis and those who work contingency. So, what’s the difference between the two and what does it mean to you, the employer.

Retained:

Retaining a recruiter to fill a vacancy at your organisation usually means you’ll pay an up upfront fee for the time and effort of the recruiter, not necessarily the results. The retained recruiter will usually work closely with you as an employer to ensure they fully understand the needs of the role and the culture of your organisation, thus ensuring success when it comes to introducing the right candidates. Retained recruiters usually work exclusively with their clients meaning they won’t be competing against other recruiters, internal HR departments, advertising etc.

However, retaining a recruiter doesn’t come cheap. Many recruiters charging a significant percentage of the projected first year annual salary of the successful applicant as a fee.

Contingency:

Contingency is a phrase often used in the legal industry where a lawyer would take on a case on a contingency or ‘no win, no fee’ basis. In recruitment, contingency simply means that you don’t pay a recruiter a single penny until the person introduced to your company commences employment. Considering the recruiter is often competing with other agencies and possibly an internal HR team, it’s likely they’ll be fleet of foot and quick to seize any opportunity with the right candidate.

The differences in approach:

In theory, the retained recruiter will go the extra mile to ensure processes are followed and the perfect candidate is delivered. The retained recruiter is always guaranteed a fee.

The contingency recruiter will often work faster to deliver results. The lack of exclusivity and the possibility of not getting a result and thus not getting paid is a big motivator for the contingency recruiter. It forces them to act quickly to corner the market.

What does this mean for you, the Hiring Manager?

In theory, the retained service will cost more but should almost guarantee results whilst the contingency service will be quicker but won’t guarantee the quality of candidate introduced. You might also want to ask yourself:

Who is the most motivated recruiter? The one who’s already been paid or the one who won’t get paid unless they get a hire?

At 80-20 we’ve turned this model upside down to give you all the advantages of a retained service whilst paying only a contingency fee. Our customers work with us on a contingency basis and don’t pay us a penny until we’ve found the right candidate and they’ve commenced employment. Your costs are fixed and agreed in advance, regardless of how long it takes to fill the role. You can be very specific in your brief, you’re not paying for our time, you’re paying for the results.

Give us a position exclusively and we’ll happily work on a contingency basis, no matter how senior the role. You’ll get the same level of consultancy, professionalism and attention to detail as you would if you paid us up front without any of the risk. Contact us now for more information or to place a vacancy with 80-20.