When a company needs talent and turns to a Recruitment Agency or Headhunter, what services or typical models of employment do they provide? Traditionally, clients are given three different choices: Contingency, Retained, and Temporary Recruitment. Some might say choices are the backbone of any good industry, and very similar to the fine dining, fast casual, and take out choices in the restaurant space.
Contingency search is a low commitment/fast casual model of recruiting. The company can ask a recruitment agency to fill a role but put no money down. The recruiter takes on all the risk that their labour, marketing spend and relationship with candidates will result in a placement and fee being earned or not. The main determinants of success in a contingency search are the companies’ hiring process, salary range and communication. Like fast casual restaurants, where three clients may come in the door but only one might buy and pay for a whole meal, while 2 of their friends stand in line and take up table space, result in huge inefficiencies for the expensive real estate and costs that go into a fine dining restaurant. Contingency search—due to the low commitment—allows companies to fill roles themselves or the recruiter to reduce their efforts, due to a low chance of an ROI.
Retained search can be a highly committed/fine dining model of recruitment. The process includes committing to timelines, having an excellent understanding of both company fit and culture, and getting a deposit, usually a large portion of the service fee. By putting up a deposit the company puts skin in the game and can expect white glove table service. Arranging interviews, assisting with all aspects of screening, relocation assistance and consultation with both candidates and the client is expected. Due to the commitment and funding, there are few 5-star fine dining restaurants outside of big cities. The same can be said of retained search experts for rural and small towns where casual dining and take out are staples of life and there are often limited fine dining options.
Calling Temporary recruitment the “take out” of recruiting may be a mistake, perhaps it’s more the “fast food” of recruiting. A company needs 10 people or 1 person to fill a role in the following week and doesn’t want to do all of the hiring, onboarding and payroll. A Temporary recruitment agency will deliver ready-to-work candidates and will essentially be the employer, providing contractors to work on the company premises. Similar to ordering pizza, the recruiter takes on all of the initial costs. But even better, the company doesn’t have to pay until after the employee has worked their first week or two, and then there are often payment terms. This is a great deal for companies from a cash flow perspective, but has added costs due to all the payroll costs and legal risks the recruiter takes on.
New models of restaurants are always turning up. Like Blue Apron delivering pre-measured meal ingredients and a recipe for you to cook yourself, recruiters now offer Recruitment Process Outsourcing, hourly recruiting and even recruitment consulting. These new models of recruiting take more time to set up correctly but can avoid some of the obvious problems with the three traditional contingency retained and temporary recruitment models. What model do you think is the future of recruiting and what have I missed, or did I just make you hungry?
Kael Campbell is President and Lead Recruiter of Red Seal Recruiting Solutions, a company providing recruitment services in mining, equipment and plant maintenance, utilities, manufacturing, construction, and transportation. When he is not recruiting, Kael spends as much time as possible with family in the great outdoors and on the water. He volunteers his time as a Board Member of the Entrepreneurs Organization of Victoria and a Member of Victoria Marine Search and Rescue. You are invited to subscribe to our employer newsletter or submit your resume.