Contingency Search Firm
The term contingency search firm refers to an organization that is paid by their client when a successful candidate is presented and hired. Contingency search firms are frequently used when a company is looking to fill low to mid-level manager and individual contributor job openings.
Contingency search firms do not get paid unless they successfully present a candidate to an employer (their client), and that same candidate is eventually hired by the employer. While their client is usually an employer, they can also work directly with an individual looking to change jobs. Companies will work with contingency agencies when they have a need to fill low to mid-level job openings.
Contingency firms often compete directly with their client's human resources organization and other firms providing similar services. Recruiters are usually paid on a commission-only basis; therefore, they may be working to fill a relatively large number of job openings (20+) at the same time. For this reason, contingency firms cannot afford to conduct extensive research into a particular opening, and may never speak with the hiring manager about their job specifications. Typical fees for a successful placement are 20% to 35% of the candidate's first-year base salary.
Clients are usually presented with a large number of potential candidates (10+) one to two weeks after a recruiter starts their assignment. Providing a relatively large slate of candidates increases the odds of a successful placement. Since the recruiters working for a contingency firm cannot afford to closely examine each candidate and job specification, hiring managers or the company's human resources representatives will need to conduct a second round of screening of potential interviewees.
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