The promise of contingency is extraordinarily enticing: you don’t have to pay unless the firm delivers the winning candidate. But there’s a reason our parents taught us that “if it sounds too good to be true, it probably is.” The contingency search model is flawed, and as a result, it frequently comes up short, failing to fill critical openings. While you focus on the benefit of not having to pay them to do the search, you may overlook contingency’s tremendous cost. You always pay a steep price, regardless as to whether a placement is made.
The opportunity costs of the contingency model include:
- Failure to include passive candidates who are not actively seeking work, eliminating more than 90-percent of the candidate pool
- Failure to document what steps, if any, the firm has taken on your behalf, providing zero accountability
- Failure to commit to working on filling your opening. Contingency firms are free to walk away and often do
- Failure to help you identify and resolve issues that get in the way of filling difficult openings
- Failure to leverage investigative research to uncover star candidates others miss
- Failure to deliver the value-add of all the research: they rarely do research
- Failure to fill the role
Contingency firms offer unnecessary redundancy. They primarily focus on the same active candidates on the same job boards that your recruiters likely frequent. Moreover, because contingency firms frequently abandon searches without telling their clients, you may be under the mistaken impression that they are feverishly working on filling the search when the exact opposite is true. As a result, the opportunity cost can be enormous. A critical position that languishes unfilled can cost a company hundreds of thousands of dollars in lost revenue and productivity. Clearly, it is time to come up with a new contingency plan, one that doesn’t include the word “contingency”.
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