Has contingency ruined the recruitment industry?

Firstly, you might have no idea what “contingency” is, so to cover this off first, it’s the most common form of recruitment for jobs ranging from entry level through to middle management. It involves an agreement where the client (recruiter) does not have to pay any fee to the recruiter (agency) until they find them the right person for the job, and they start.

contingency recruitment

 

So effectively recruitment agencies have to work for free, unless they fill a role, it’s the recruitment sectors version of “No Win No Fee”. And in a sector where the bulk of a salary can be made from commission, this is a big driver in the way some consultants have to work.

I often hear a lot of complaints from candidates and clients on a multitude of things that could be solved if they were working on a retained basis (part payment up front, part on completion). And whilst I believe it’s incredibly important to do the best job you can regardless of the payment arrangement, this form of recruitment unfortunately does not always encourage the right kind of professional attitude towards the way people work. Especially at agencies charging much lower fees.

There’s often a complaint of recruiters “bashing out the numbers” or “only caring about the fee”, unfortunately in agencies that do 99% contingency, for the business to stay afloat, they have to work on the basis that they might only fill one in every 5 roles and as such there is a numbers element. And if whether you get to keep your job or not depends on your billings, then of course they can’t help but think about the fee. Everybody needs to pay their mortgage, eat, feed their children and pets…

The difficulty is that people that are not able to balance the level of customer service they provide, with the numbers they have to bash, and figures they need to bill, can find themselves giving a bad experience to candidates. As they don’t get back with feedback, don’t respond to applications, and mess up with arrangements. But if you have 50 calls to make each day, 20 live jobs at different stages, 20 clients to keep happy, 40 job applications, and 50 different candidates all active at one time, would you be able to balance this? And is it 100% their fault, or are they an unhealthy product of the contingency era.

Clients can complain that consultants haven’t met all the candidates, that some of the people they send don’t hit the brief, and that they’re too slow.  But when they refuse to work on a retained basis, and encourage an environment for their recruitment that lends itself to number bashing and poor customer service, are they not responsible as well?

I’m not for one second stating that anybody should be excused for bad customer service, but I’m yet to meet a single consultant in my career in recruitment, that has been able to manage their desk and not make mistakes due to a massive workload. I worked with a guy who tried once, but he left his job, as trying to do things perfectly for everyone actually made him ill.

In my opinion, contingency has massively aided the downfall of standards in the recruitment sector, and I would choose to work on a retained basis for every job I have were I able, as this allows you the money to advertise more, the time to manage things perfectly, and the assurance you will be paid for the work you do. The result; candidates get better service, clients get better service and a cheaper fee, consultants get paid, and the only difference? You pay part up front.

Hardly a lot to ask for everyone to be happier?

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3 Comments

Anna Mcgrath

Sadly, I would have to agree.

To not pay somebody for their hard work, whether they’ve been successful or not is quite simply, unfair.

If you worked a 9 to 5 shift and didn’t get paid for bringing in the customers they desired, this would simply be awful; so why should it be any different for recruiters?

I read a similar article recently from an article recruitment company:
https://www.ljdoulton.uk/blog/contingency-why-it-just-doesnt-work-in-recruitment-anymore/

It various folk are literally seeing the same problem here, then something needs to change.

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