What does the word contingent mean to you? Is it a synonym for “free?” Does it represent an effective way to find the best talent available? Is it meaningless? The staffing world is a unique industry filled with hiring models and terms that are often misunderstood. In my 20+ years working in this arena, I’ve never seen the misunderstanding of a single word cause as many negative repercussions for clients and staffing firms as I have with the word contingent. Here’s what “contingent” really means, and how your business can thrive under this hiring model.
In plain terms, a contingent hiring agreement means a staffing firm searches for qualified candidates for a client’s open role. Once an appropriate candidate is hired, the staffing firm is paid for their services. When understood and used correctly, this is a mutually-beneficial model for businesses and staffing firms alike as the brightest talent fills the right roles. Unfortunately, this foundational view has become muddled and often forgotten beneath a mountain of emails, conference calls, and other pressing concerns. For some businesses the definition has morphed in recent years, leading to hiring inefficiencies.
In practice, contingent staffing models have often fallen prey to exploitation, whether by accident or on purpose, in a way that is unique to the staffing industry. For example, imagine for a moment you’ve enlisted a contractor to build a new house to your requested specifications. When they finish their work and ask to be paid before handing you the keys, is it possible to change your mind and tell them you’re no longer ready to move, refusing to pay them? As sensational as it sounds, this is exactly what happens to recruiters when the contingent model is not used as intended. Recruiters understand that hiring situations can change; it’s simply the cost of doing business. But when this happens regularly, there are ways to prevent it.
A big roadblock to productive contingent hiring lies in vague or changing timelines. Having a clear vision of when talent is needed is a prerequisite to engaging in this staffing model. Timelines that change indefinitely are unproductive for both parties, as a recruiter spends time sending over great candidates only to discover the hiring date has been pushed back. Top talent in the creative and IT industries does not stay on the market long, and moving a timeline means starting searches over from scratch. Why spend time meeting with a string of candidates only to delay hiring them? Your time is best spent focusing on your critical business tasks, and that’s why you’re engaging with a recruiter in the first place.
Staffing firms vet candidates and produce the cream of the crop to save their clients time, and extending the process negates the value added of working with a recruiter. I’ve seen it all too often. In one memorable case, a client engaged KORE1’s services over the span of two and a half months. Countless top-level candidates were sent over for interviews, and in the end, the client determined they weren’t ready for a new hire. While they did not spend any money, they spent a great deal of time working with us. It hurt them, and it hurt those on our team that spent months putting in fruitless labor.
Similarly, a good hiring strategy involves determining the exact type of talent needed at the start of the process. Create a job description and outline the role’s essential responsibilities, and most importantly, stick to it. Just as with timelines, I’ve seen countless instances where a job description changes multiple times. After receiving several candidates meeting the right criteria, businesses have decided other skills are necessary. This is inefficient, and when combined with a contingent staffing model, becomes a drain on resources.
Sometimes, managers can get so swept up in high-level work that they may not anticipate the effects of changing course mid-search. We all know things change quickly in the business world, and that’s ok, but the frequency of this in contingent labor agreements has been growing. Changing a job description and brushing it off as a minor decision adversely affects and delays a manager’s ability to hire the best talent.
In life, the best and most productive relationships are based on trust and honesty. This holds true for recruiters and their clients as well, especially in a contingent staffing model. Working for KORE1, I am proud of not just our ability to find the absolute best talent for clients, but of our strict adherence to industry morality. Our biggest contingent-hire wins have come when our client is open with us and treats the model as if their money is invested from the beginning. After all, we’re in this together.
After two decades in the industry, I’ve seen dishonest business practices cause hiring problems many times. Businesses have enlisted the work of recruiters solely as a barometer of the current level of talent available, with no intentions of making a hire. Others have pitted five recruiters against each other over a fourth month span, telling each that they are the sole staffer being engaged. The staffing industry is a small world, and taking advantage of one recruiter is not just counterproductive to a business, but a detriment to a company’s image. Openness and honesty between client and recruiter is the most important tip for making a partnership work for everyone involved.
When approached correctly, contingent labor brings success to a client’s business, the recruiter, and the talent settling into their new role. Just as in any other staffing model, the end goal for all parties is to make a great hire. As long as there is an open and honest relationship between client and recruiter with that mutual goal in mind, then contingent labor can continue to be a productive hiring method for the creative and IT industries.