Contingency Recruiting

Contingency Recruiting is a performance-based recruitment model in which a recruiter or recruiting firm is only paid if they successfully fill a position for the hiring company. Unlike retained search models that involve upfront fees, contingency recruiting involves no payment unless a candidate is hired - making it a low-risk, high-competition solution for employers.

It’s commonly used for non-executive, mid-level, or volume hiring, and often involves multiple recruiters competing to place a candidate first.

Key Facts

• No Hire, No Fee: Employers only pay the recruiter after a successful hire, usually as a percentage of the candidate’s first-year salary (typically 15%–25%).
• Non-Exclusive Agreements: Companies may use multiple recruiters simultaneously, increasing competition but also candidate exposure.
• Used for Common Roles: Best suited for mid-level, non-specialized, or easily sourced positions, where speed and reach are more important than deep market insights.
• Fast Turnaround: Recruiters are motivated to act quickly, as they only get paid if their candidate is hired first - often leading to a shorter time-to-fill.
• Low Risk for Employers: No upfront cost, which makes it attractive to small or medium-sized businesses and organizations without large recruiting budgets.
• Quality Versus Speed: The race to submit candidates quickly can sometimes sacrifice deep vetting, cultural fit, or long-term success.
• Contract Terms Matter: Agreements may define guarantee periods (for example, if the hire leaves within 90 days, the recruiter must find a replacement or issue a refund).

1. What is contingency recruiting?

Contingency recruiting is a hiring model where recruiters are paid only if their candidate is hired. It’s commonly used for non-executive roles and requires no upfront payment.

2. How does contingency recruiting work?

Recruiters source and submit candidates to a company. If the employer hires one of their candidates, the recruiter earns a placement fee - typically a percentage of the candidate’s salary.

3. What’s the difference between contingency and retained recruiting?

• Contingency: Paid after a hire, often non-exclusive and used for mid-level roles.
• Retained: Paid upfront to conduct an exclusive, in-depth search - commonly used for executive or hard-to-fill roles.

4. What are the pros and cons of contingency recruiting?

• Pros: Low financial risk, fast candidate delivery, wide reach across multiple recruiters.
• Cons: Less control over candidate quality, potential duplication/conflict, focused more on speed than long-term fit.

5. When should a company use contingency recruiters?

When you need to:

• Fill roles quickly and affordably
• Source a large volume of candidates
• Avoid upfront recruiting costs
• Get extra support for internal HR teams