Contingent Conundrum: Building Relationships or Slinging Spaghetti?

Hard to get dollar illus - freeWe’ve lost the human side of recruiting to the tools and repetitive tasks of recruiting.

I could go into a long diatribe, but a short one will do. I’ve said over and over in many different ways that recruiting, by and large, is a broken system. True recruiting is a complex process that takes years to refine and there is no panacea that makes it easier. Tech startups are popping up regularly with new gimmicks to make recruiting easier. They are trying to build a better mousetrap and companies are the “suckers” that buy into it. It’s these tools that I believe are preventing recruiters from learning how to actually recruit, a process that many of us “old timers” learned years ago.

Paid By Employers To Fill Jobs?

Not necessarily. If you are a retained recruiter you’re paid to fill jobs. If you are a contingent recruiter, you’re not paid to fill jobs. You’re working for FREE, until you make a placement. Most companies work with several recruiters on each job opening to mitigate their risk, and improve the chances of finding the right person. This is why the majority of contingent search folks sling spaghetti against the wall to see what sticks.

Companies get what they pay for. Before I get a rash of angry contingent recruiters wanting to tar and feather me, remember that I was a contingent recruiter and know not all recruiters operate this way. It’s just that, overall, contingent search is an ineffective model. When I did contingent work I followed a retained model. It was a good model, but the problem with retained work in a contingent environment is that it’s only minimally effective. There’s no committed partnership between contingent recruiters and their clients regardless of the “relationship” you think you may have.

So let’s look at an important question you should be asking yourself and your clients/hiring managers. Do you believe for one minute any of your clients would take a job if, in the interview process, they were told,

We really want you to work for us, but you won’t get paid until you complete the project?

I have asked that question many times over the years, and without exception, the answer is always NO (in case you didn’t already have that figured out). So why do they expect recruiters to do that? It’s because they’ve always done it this way.

I can’t tell you the number of people I’ve heard complain about how much they hate recruiters, and that they don’t do a good job. I hear this regularly from former contingent clients and even new prospects I’ve been referred to. They whine that both their internal and contingent recruiters aren’t effective, yet they have no ability to change anything. Seems like a self-fulfilling prophecy to me.

Is The Human Side Of Recruiting Being Sidelined?

Of course it is. The more we rely on technology, the less human interaction there is. The more companies utilize a model that pits recruiters against each other, the less time there is for recruiters to build relationships. The more companies use contingent models to fill multitudes of engineering type positions, the fewer candidates will even respond to recruiters who pitch them “opportunities” via email.

Here’s a recent story:

I was hired by a startup in Boston (they received Series A in March 2013) to find some engineering and developer types. Full disclosure: I don’t ever place these types of folks, but I was referred in by the VP sales, and was convinced I could get the job done after speaking at length with the founder.

I will say I’m almost sorry I accepted the project, not because of the company, but because these tech types are next to impossible to engage with. I have a very effective method of getting people to respond to me, but technical people are a different breed than the sales types I’ve primarily dealt with over my career. If I were unable to leave voicemail I’d resort to email. Ninety percent of the time I’d get a response something to the effect of, “Send me the job description, name of the company, and compensation and I’ll let you know if I’m interested.”

Ugh! Really!

Then it was more emails to convince them further that they wouldn’t be disappointed if they would just have a call with me. I will say that once I got someone on the phone I had him. It was just the arduous process that made me crazy. Even when my researcher found candidates for me, I still had to go through this ordeal to get them on the phone.

Why has this become such a problem? Because there is an overabundance of contingent recruiters deluging these poor guys with emails pitching jobs without even knowing anything about the individual being targeted. Contingent firms and staffing agencies are hiring more and more people with little to no experience to pound the phones. I wouldn’t want to speak to any of these “recruiters” either if I were in these candidate’s shoes. Plus, most contingent firms have a turnover rate in excess of 50%. Is this the model our industry wants to hold up to our clients as success? If firms can’t keep employees how do they expect the firm to do an effective job finding them the right candidates?

Do Recruiters Stand For Anything Other Than Just Filling Jobs?

Yes, but I assert this is the minority. An industry has been created where the bulk of “professionals” are paper pushers. The Boston founder I mentioned above told me he’d worked with a contingent recruiter for 3-4 weeks before engaging me.

“They had good volume, but the quality was never there. They eventually stopped sending me resumes since they concluded I was too hard to please. The recruiter actually said I was the #1 picky manager he’d ever worked with,” he wrote me in an email.

This is so pervasive throughout the contingent industry, and is the common denominator of what I believe is wrong with search today. Who’s really to blame though? I say it’s the companies using this model. It forces recruiters to send volumes of candidates to clients. How did this model ever come into being?

In addition, many say we should be helping the millions of people who are out of work. I’m not disagreeing, but how can recruiters help when the hiring manager says they won’t speak to out of work candidates? This is just another problem with the contingent model, which leads me to my next point.

“Agent of Management” or “Consultant to Management?

Let’s forget about the nuts and bolts of the effort being made by some recruiters to educate hiring managers for just a minute. Most recruiters are “agents of management,” meaning they just fill the job spec they’re given. There are some who attempt to function as “consultants to management,” but in the contingent world managers don’t necessarily listen. Why not? Because when people aren’t paying you for your advice and counsel they have no motivation to listen. Sure there are exceptions to this in the contingent world, but they are in the minority. If companies truly wanted a consultant to management they’d retain you for your expertise in search. If your advice were truly valuable to the client they’d pay you for it.

What Would Happen?

Eliciting change is never easy, especially when people are used to doing things a certain way. Changing the minds of decision makers who have always done search via contingent methods is an uphill climb.

I got an email from a former hiring manager of mine that said, “Our stance is that mid-level and below should not be retained, but that above mid-level or for strategic it almost always makes sense to do retained.”

I find it interesting that for front-line sales guys (the ones ultimately responsible for generating revenue) more companies don’t see the importance of ensuring the right hires. I wonder what would happen if contingent recruiters began telling their clients they would no longer work for free. What do you think would happen?

It would take time, but I believe the model would eventually shift. You need groups of people working together for that change to occur. The results of this action would be that the low quality recruiters would either go away or rise to the occasion and become great, and the industry would shift for the better.

Image courtesy of cooldesign / FreeDigitalPhotos.net

About the Author

Carol Schultz is a pioneer in the recruitment process optimization and career strategy industries. She has built a client base of countless individuals and myriad companies from early stage pre-IPOs to publicly traded companies. She uses 20 years of recruiting experience where she honed her industry expertise and formed an intrinsic understanding of successful recruiting processes and the critical nature of alignment with corporate goals and objectives.

She takes a thoughtful approach to talent and focuses all her time on assessing, analyzing, and deploying recruiting strategies and processes that work. Her consulting and training company, VerticalElevation.com offers a fresh approach to talent strategy and incorporates the executive management team’s core values so they permeate every aspect of the hiring process. As an advisor and coach to corporations, she makes a stand for best practices to attract and retain the best and the brightest.

  • druedeangelis

    Well said! When working on contingency, one must spread out the risk so as to ensure you get paid something. The typical successful contingency recruiter must work on 15-30 searches at once which makes it impossible to do dig deep into the passive market. What is so funny is how so many of them fight for their legitimacy rather than fight to go to the retained model. Thanks for speaking truth! The best way to improve our industry is to convince more people to reject contingency terms. http://www.druedeangelis.wordpress.com

  • Edward N. Woycenko

    In today’s market, if companies are serious about hiring top quality people, they should be willing to put skin in the game. The average recruiter spends between $9-$12K in time and money conducting a search. Using the contingency model, only about 10-12% of contingency searches are successfully concluded. If companies are not willing to make an investment in the most important asset they have, the people who work for them, then what are they willing to invest in? Companies need to function like sports teams to ensure they have the best people in every position. This approach does not rely on luck, such as having people respond to job board advertising or relying exclusively on social media recruiting. If we are going to change the way companies approach recruiting, we need to walk from contingency only assignments that are not exclusive. Statistics show a 94% success rate when companies participate in a shared risk approach.

  • Keith D. Halperin

    Thanks, Carol. IMHO, much of the problem is caused by:
    1) If clients are paying 3PRs (contingency or retained) NOT for the type of professional, highly-experienced, well-trained work that’s worth at least a 30% fee, then they are wasting their money as much more cost-effective alternatives to this lower-level type work exist. I believe that much 3PR work is performed by junior, low-skilled recruiters for clients unaware of the existence of these useful alternatives.
    2)There really isn’t need (or ability to pay) for a great deal of this high-level 30% work, and even if there were, most 3PRs aren’t able to do it effectively- they may be too “green” or may simply be unable to do it well. (I COULDNT do it, well, that’s why I’m in contract recruiting…)
    -Keith

  • JW

    Did any of you bother to read the revenues in the contingency vs. retained recruiting in the Bullhorn report on this site?

  • https://about.me/nicholasmeyler Nicholas Meyler

    Sounds like good ideology, but when I read the part about “countless clients”, it sounds like someone is really a spaghetti-thrower in disguise. The mentality of viewing a candidate pool as “client” is fundamentally contingency-based, which Carol clearly can’t understand, although she certainly pays ‘lip-service’ to the opinions of the ignorant crowd. She seems like a “shit” recruiter to me, to use her words.

    carolbschultz commented on Nov 5, 2013
    Thanks for posting this email. I’ll say that as a search pro with over 20 yrs experience, the fact that Meyler is recruiting this way lumps him in with the 95% of recruiters who are shit. What’s particularly disturbing is that the guy has been a recruiter since before the Internet. He should know better. He should know how to reach out to candidates in a way they’ll be more apt to return his calls/emails. I’ll assert he’s doing contingent work (what most recruiters do) which exacerbates the problem. It’s all about slinging spaghetti against the wall to see what sticks. The root of this problem, however, lies with the companies that refuse to use a retained model and utilize corporate recruiters who are clueless about how search needs to be done. It is only with this model that search can be done professionally.

  • https://about.me/nicholasmeyler Nicholas Meyler

    The “quote” below is NOT what I wrote. Again, the Fordyce Letter is doing fraud and misrepresentation. I specifically asked for a retraction as well. Crappy journalism by crappy recruiters taking pot-shots at their betters is all the Fordyce Letter has ever accomplished.