Contingency Recruiting

What is contingency recruiting?

Contingency recruiting is a type of recruiting service, wherein the selection representative gets paid on the effective hires they accomplish for the organization. In simple terms, the client pays the recruiting firm only when the candidate sent by them meets all expectations and is hired in the organization. Contingency recruiting firms work for multiple hiring clients at the same time.

How does contingency recruiting work?

  1. The hiring client first gives the job description of the required job role to the contingency recruiting agency.
  2. The hiring client and the agency then decide and agree on a fee to be exchanged on every hire.
  3. The agency then starts their journey of sourcing talent from various sources.
  4. Once they short list the candidate, the initial screening is done so as to assure that the candidate is the right fit for the hiring client.
  5. Only after the candidate screening stage is successful he sent to the hiring client.
  6. The candidate then has to go through the recruitment stages structured by the organization. If the candidate succeeds in these rounds, they are selected for the role and the role is offered
  7. If the candidate accepts the job offer made and completes period of service agreed by both contingency recruiting agency and the hiring client, the employer then pays the contingency recruiting agency the pre-decided fee.

How are contingency recruiters paid?

Contingency recruiters, also known as third-party recruiters, are typically paid on a contingency fee basis, which means they only receive payment if they successfully place a candidate in a job. The fee is usually a percentage of the candidate's first-year salary and is paid by the hiring company, not the job seeker.

The percentage fee can vary depending on the industry, the level of the position, and the recruiter's experience and reputation. Typically, fees range from 15% to 30% of the candidate's first-year salary.

Advantages and Disadvantages of contingency recruiting

After learning about what is contingency recruiting, let's take a look at the advantages and disadvantages of it.

Advantages -
  1. Cost effective - The cost involved in sourcing contingency recruiter is preferably lower than any other modes of recruiting, since you pay the agent only when a candidate is hired and working.
  2. Quick hire - With the help of contingency recruiting, the time to hire can be fastened and organization can fill the position quickly
  3. Lower in-house HR requirements - The outsourcing of recruiters eventually helps in cutting down costs and manpower of company's in-house HR requirements.
  4. Time effective - With contingency recruiting agency taking care of screening and pooling candidates the enormous amount of time spent on it by organizations is saved letting them focus on their business and also sourcing in qualitative talent.
Disadvantages -
  1. Quantity over quality.- The contingency recruiting agency will focus more on his share of income and try to send more number of candidates irrespective of the quality of talent
  2. No exclusivity - The contingency recruiting agency works for multiple organizations and that might be a huge barrier as the agency might source best talent to the higher paying client.
  3. High fees - The fees charged by the agency might be quite high depending on the demand in the market.


In conclusion, to answer the question what is contingency recruiting? One can say that Contingency recruiting is best for who are seeking to hire qualitative candidates quickly and want to save money on HR costs. Sourcing the perfect candidate at the perfect time can be challenging. It's not strange for employers to have more than one alternative for sourcing qualitative talent through their own careers page, employee referral programs, and outside recruitment firms. The most important thing for a business to run successful starts from hiring right! Hence it is very necessary to use all the tools and resources available.

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