Contingent recruitment is bad for everybody.

If you believe what you read, this harmless looking smoothie actually contains as much sugar as 3 1/2 Krispy Kreme doughnuts:

Innocent

Not everything that looks good for you is good for you. And so it is with contingent recruitment.

First – a definition. The contingent basis of contingent recruitment is that the fee is contingent on the result.

Somewhere in recruitment’s long and distinguished past, a plucky recruiter decided that they would offer their services on a ‘no-win-no-fee’ basis and started a precedence that still shapes the majority of the recruitment industry to this day. Combined with misaligned incentives at recruiter level, it’s also probably responsible for everything that’s wrong with the recruitment market today. Contingent recruitment is bad for everyone – the client, the candidate and the recruitment agency.

It’s very important to add that it’s not necessarily the contingent model itself which has done this – more the way that this model as been abused over the years. With no initial outlay to engage a recruitment agency, most clients don’t think twice about engaging multiple agencies on the same roles(s) – they only have to pay the one who fills the role after all.

But longer-term, this isn’t great for them. In fact…

It’s bad for the client

Given that contingent recruiters only get paid for results and not for the work itself, they have to prioritise the low hanging fruit – the quick wins, the easier roles. This could relate to the type of role, their strengths, candidate base or network in that area; their relationship with the hiring manager, the number of other recruiters on the role, etc.

Recruiters don’t actively work on tricky roles – the ones you really need them for. There’ll normally be an initial surge of submissions as the agencies’ respective quick win candidates come through. After that, the activity will quickly abate as the recruiter moves onto roles that are more likely to convert.

The other outcome of this is that every agency goes out to market and talks to the same people about the same roles, which can create the perception of desperation. Not great for employer branding.

The greater the number of agencies you engage, the worse this will be. Scatter gun with your recruitment agencies and expect to be scatter gunned back by them. It creates something of a race where agencies compete on speed, often overlap on the same candidates (causing squabbles between agencies and other such nonsense). It encourages agencies to cut corners.

Which means…

It’s bad for the candidates

Candidates often find it difficult to trust recruiters, and who can blame them?

A lot of these agencies work on the basis of speed, and this means cutting corners – many don’t meet candidates, some send CVs without permission (a friend of mine was once sent her own CV as a submission for a role she was recruiting for, by an agency she wasn’t registered with).

Incentives have a lot to do with this too – most recruiters work on a commission basis and often make most of their earnings this way. It promotes a culture of putting the fee before the candidate, as well as attracting a certain type of person into the recruitment industry (this guy).

Although many recognise the value and do invest time, contingent recruiters aren’t incentivised to work for the candidate. Candidates can often feel that they are a commodity, which informs the way they deal with other recruiters.

And that’s just one of the many reasons that…

It’s bad for the recruitment agency

Ultimately, using the contingent model as a means to brief multiple suppliers hugely devalues the work that recruiters do (or are capable of doing). To use a crude analogy, it’s a little like asking 5 builders to build you a wall but only paying the one who builds the wall you like best.

From a business perspective, it makes forecasting very tricky as you’re always weighing up risk and potential rather than anything concrete. It promotes the necessity to spread yourself thinly in order to hedge your bets and limit your risk. This means less focus on each role and less chance of converting respectively.

Saying that…

It’s not all bad

There’s still some merit on the contingent recruitment model, but I think it only lies in using contingent recruitment on an exclusive basis. I think it’s important that a client selects an agency partner based on their capacity to deliver on that specialism and invests time into a proper briefing and continuous conversation throughout the process. This way it’s better for everybody.

A disclaimer

 

This article relates to the job-rich, candidate-short digital marketing sector in particular – I’m not claiming to understand the nuances of other sectors which might behave differently.