Talent Acquisition

4 Ways Contingency Recruiters Can Harm Your Business

All companies make hiring decisions and recruitment partner agreements based on a variety of factors that are important to their specific organization or department. Critical factors in making this vital choice will include budget restraints, confidentiality, management style, competitors, skill set and market availability, culture and the seniority of the position. Only the hiring manager is privy to their exact needs and which methods are most suited to finding the right person for a specific opportunity.

For the hiring manager to make an informed decision on which recruitment partner they should use, it is vital to know what your alternatives are and also which methods could help or even potentially harm your business.

When hiring senior level individuals, most business leaders would agree that Executive Search or headhunting is the fastest, most effective and targeted method of identifying, sourcing and attracting the best candidates.

These Executive Search consultancies or headhunters as they are better known, provide a retained service where the client pays a proportion of the fee upfront. This ensures client commitment, exclusivity, and investment in a professional and discreet service. These experts will represent your business in a highly professional and confidential manner and can approach the right people and fast. They will dedicate all their resources, time effort, research and energies on your project until it is complete because you have paid for their expertise up front. If you partner with the right company, the return on the investment will be exponential, and the new hire should be able to add value quickly to your organization.

At this stage, it is important to highlight a few points that explain the possible dangers and consequences of using the wrong type of recruitment service for your important hire. Contingency or ‘success only’ recruitment is strictly speaking not headhunting if they use a database. Consider the situation from the perspective of the recruiter: you have 20 vacancies on your desk that you are working on and a client will only pay if they like a candidate you present. How much time and effort will you spend on each of these high-risk positions with no possible reward? How will the candidates be treated and how will they feel about the approach, security of their information and coaching or feedback? Remember contingency recruitment is essentially a sales job, and contingency recruiters want to make commission on the roles they fill. You normally only have an agreement with a contingency recruiter if you hire one of their candidates. So what happens to the ‘confidential information and job profile you hand over? What about the unsuccessful candidates and the details provided in your companies name?

  1. You cannot assure confidentiality on contingency projects. Whether your project is confidential or not it is imperative that a private and secure manner of handling the assignment is shown to prospective candidates. Any data you provide to a contingency recruiter can and will be freely distributed to the market at large. Candidates are now wise to the recruitment industry, and many don’t trust the security of their personal data in the wrong hands. Contingency recruitment companies often add CV’s to their database without asking for candidates consent. This means you are seeing the profiles of individuals who have been previously unsuccessful. Furthermore, imagine the information your competitors can find out from a recruiter – without the right safety checks in place and no NDA’s being signed you are giving your competition a wealth of information.
  2. Candidates will be approached by several recruiters about the same job if exclusivity is not agreed. This looks unprofessional and demonstrates to the market that the client is unwilling to invest in a professional and discreet headhunting service. If it is a particularly sensitive position and crucial to the success of the client, then it’s not worth the risk. Also, the rest of the team are at risk of finding out misinformation, and this could have severe consequences for their morale and perception of their employer.
  3. Any recruitment company that delivers a contingency project knows their chances of success are slim. This is especially the case if there are many other recruiters working on the same job. Therefore they will not invest optimal time or effort into your assignment. Contingency recruiters work on many projects simultaneously, and it’s a numbers game resulting in little commitment and seeking out only low hanging fruit. You are not paying for expertise but just someone to sift through CVs.
  4. Contingency recruiters are extremely expensive considering the service they provide. They may look on a database and make a few calls, unlike retained headhunters whose researchers will scour the market and call up to 100 potential candidates. Is it worth saving a few percent of the total fee when you can be assured of the industry’s best service with guarantees for a few points more? Many prospects return to us as clients, having experienced no success with contingency recruitment firms and we are then left with the massive challenge of approaching and persuading people that have a preconceived negative experience.

Whilst we don’t underestimate the challenge a hiring manager has when deciding which route to take it is vital that the initial outlay is not the only determining factor. Having worked in both environments, I can honestly say that retained headhunting is the only truly secure and professional method of identifying and attracting the industry’s best high achievers, and the total cost is only marginally higher than other ways that could harm your business.

About: Ed Robertson is a seasoned Marketing Manager writing about a range of topics covering executive search, employment, and education. MSC-Headhunters is a retained executive search firm serving corporations around the world.

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