Contingency recruiting is a type of hiring practice in which outside companies screen and evaluate the best candidates for a certain position. This type of recruiting may be done by a firm of one or two persons only, or it may be performed by large firms with many employees analyzing prospective candidates for jobs. Unlike a contract recruiter who receives a flat fee for services, contingency recruiting firms are paid upon the successful hiring of a proposed job applicant.
Recruiting services usually include research into a potential employee’s personality type, full background checks, and verification of references, experience, as well as claimed and appropriate education. Depending upon the firm, this type of recruiting may offer elaborate personality testing, lie detector testing, drug testing, or other research methods to try to find the best employee for a prospective company.
Those signing up with a contingency recruiting service who are job searching do not usually pay a fee to the recruiter. Instead, the company hiring the employee pays a fee, if and only if the firm provides an appropriate candidate. Usually, contingency recruiters have contracts with companies looking for employees, and the fee for services upon hire is agreed upon prior to the contingency recruiter doing any work.
Since this type of recruiting works on contingency basis, fees for it tend to be higher than flat fees charged by contract recruiters. Business experts suggest that this method may be the best way to hire a single employee, but may become very expensive if multiple employees need to be hired.
Often, the fee associated with the successful hiring of a candidate is between 15-30% of an employee’s first year’s salary. So a contingency recruiting firm might receive $30,000 US dollars (USD) for facilitating the hiring of an employee who will make $100,000 USD. Unlike the contract recruiter, however, recruiting on contingency involves a higher element of risk, so most feel their higher prices are justified.
Contingency recruiting firms often maintain databases of prospective employees, which helps make selecting candidates for jobs easier. One can seek out recruiting firms if one is looking for work. Many looking for jobs feel that working with a firm is slightly more successful, since the firm must be highly motivated to get people hired or they make no money.