If you ask a tech organisation about working with a recruitment business, the responses you get are likely to be mixed. Whilst some might be positive about the experience they’ve had with recruiters, others may share stories of poor quality hires and inefficient services, and some may have avoided recruiters altogether because of the bad reputation they’ve gained.

Not all recruitment horror stories are to be believed, and in the case of labour-heavy, entry level or high-churn roles, contingency recruitment is actually the most efficient approach. However, by avoiding recruiters because of bad experiences, tech companies stand to miss out on a lot of benefits that working with the right recruitment partner can bring. The issues that are caused by many of these agencies and individuals happen because they’re using a model of recruitment that is inherently broken for the modern world.

This poor model breeds bad habits that result in low-quality outcomes. The contingent model rarely pre-screens for competency, company culture fit and value alignment, or even focuses on trying to reduce candidate attrition for its clients. It's less partner-led.

Poor-quality recruitment services give a bad name to the businesses in the industry that have moved beyond conventional recruitment models and are trailblazing new methods to provide high-quality talent-sourcing services, especially in the current candidate-scarce, candidate-led market. In this article, we’re going to explain the problem with contingency recruitment and suggest the best alternative for tech businesses looking for recruitment support.

The Problem with Contingency Recruitment

One of the key reasons that tech companies like start-ups and scale-ups are put off by the idea of working with a recruitment business is that their understanding of recruitment comes from the contingency model.

Contingency recruitment is a recruitment approach where a company wants to fill a specific job role and asks multiple recruiters or recruitment agencies to find a suitable candidate. In these situations, a recruiter only gets paid if their candidate is selected for the role by the employer. The key problem with this approach is that all of these recruitment agencies are going after the same pool of candidates on the market and they want to be the first to have their name on a candidate.

Instead of taking the time to screen and source an ideal candidate, many recruitment businesses scrabble to be the first to fill the vacancy, which instils a speed-over-quality mentality. They’ll fire over CVs as quickly as possible without screening candidates or considering whether they’d be a good culture fit, or they’ll try and get a response from their candidate network as fast as possible.

Job adverts in contingency recruitment often only consist of the job description and don’t give any detail about the company or the kind of candidate that would be suited to the role. Candidate databases are contacted without any kind of refinement or personalised approach, meaning that most recruiters will only get a couple of responses to hand over to a potential employer.

Instead of setting up bait and waiting for interested candidates to bite, they’re throwing a stick of dynamite in a lake and seeing what rises to the surface first.

The result of this is a poor collection of candidates being passed on to companies looking for new employees, extending recruitment processes as hiring managers have to weed out unsuitable candidates. This creates more work for an HR team or in-house hiring managers, as well as leads to employees being hired that aren’t right for the role or the company, which causes plenty of problems in the long term when it comes to attrition.

The real cost of a failed hire is much more expensive than most people think. On average, it costs a business 33% of the departing employee’s annual salary every time a candidate leaves a role and has to be replaced. 

Candidates are also negatively affected by the contingency recruitment model, as it can mean that they are regularly sent over job adverts that don’t actually match what they’re looking for. They may also be contacted by more than one recruiter about the same job, as many recruitment businesses end up using the same databases.

This is a very bad look for your businesses. If you have a confused, jumbled-up, uncoordinated recruitment outreach strategy, it could raise concerns about other processes in your business from a candidate’s viewpoint.

When candidates grow tired of working with unsuccessful recruiters, they’ll stop responding to opportunities and shrink the talent pools that these recruiters are using. This gives recruiters even less talent to work with, making it even less likely that they’ll find a company where a potential employee would be a good fit.

It makes sense that a poor recruitment model would lead to poor recruitment efforts, but the problem is that contingency recruitment is still often viewed as the conventional way to fill a role. This is what has led to recruitment agencies gaining such a bad reputation, with these bad reviews often overshadowing the successful and alternative approaches that some recruitment businesses are now successfully using.

What’s the Solution?

Plenty of recruiters now view the contingency model as a legacy approach, favouring the retained recruitment model instead. In this approach, recruiters receive an upfront payment and are usually paid in three stages. A common fee structure, and something that we regularly adopt, is 25% upfront to cover the search, 25% on shortlist, 25% on start and 25% 60 days later.

This means that these recruiters aren’t pressured to be the first to fill a vacancy, which means more time can be spent on pre-screening, doing competency-based interviews and making sure cultural alignment is present alongside technical ability.

Retained recruitment leads to a higher quality of candidate, as most of those that are shortlisted are passively hunted and sourced from other firms. This means that recruiters in retained searches can do more creative things to attract the best talent and provide companies with employees that are better at their jobs and also much more likely to stay with them for longer. It also means you get access to higher-quality talent alongside a wider talent pool, as those who are not actively looking for a role tend to be happy and successful in their current roles.

Contingency recruiters usually operate on a legacy, outdated database and job descriptions posing as job ads, which means that you're only getting people who are looking for roles. This isn't always a bad thing, but working with a retained partner generally yields much better rewards.

The majority of recruitment partners use this approach to find suitable candidates, and we feel that it is the best solution to overcoming the hesitancy that tech organisations feel towards working with recruitment businesses.

Recruitment partners take the time to get to know your business; they’ll comb through your history and values, speak to your current employees and ensure that they have a full understanding of the structures and processes that your company relies on. Not only will this help them to put together much more accurate job adverts to source candidates for the role, but they’ll also gain an idea of the kind of people that will thrive in your company culture and avoid selecting candidates that won’t be the right fit. This results in better long-term attrition figures and faster ramp-up times for candidates, resulting in huge financial and productive gains.

33% of candidates in the tech industry rank company values and culture as a key factor that influences their decision to accept a job offer. Culture alignment is a growing priority for candidates in today’s market, and a retained recruitment approach ensures that this is carefully considered when matching candidates to the right roles. 

By working with a recruitment partner, you benefit from a recruitment model that leads to more effective sourcing and increased retention. But you also gain a business partner that can assist with your overall recruitment and business growth strategy. You’re part of a partnership, not a transactional-based relationship.

If you know that you need to expand your team but are unsure of which roles to fill first or the best way to scale up, a recruitment partner can be an excellent support system. Not only do they have the experience to offer tailored advice, but they’ll also be able to suggest a growth plan that may involve contract employees as well as permanent ones, using their technology partner and candidate network to find suitable candidates.

A recruitment partner can also be a valuable asset when it comes to developing an employment brand and an employer value proposition (EVP). When a business invests in developing and promoting its employer brand, it can see up to a 50% cost-per-hire reduction and experience 50% more qualified candidates applying for their roles. Working with a recruitment business long-term allows them to get a good idea of how candidates perceive your company and the actual employee experience you offer, both of which are key elements of understanding and marketing your EVP, and which ultimately results in better candidate attraction and retention. 

It’s an unspoken issue in the recruitment industry that plenty of recruitment businesses are still using contingency recruitment methods instead of investing time in building long-term relationships with their clients so that they can offer retained recruitment services. However, the benefits of a retained recruitment approach are undoubtedly worth putting in the time to find a suitable recruitment partner, which is why tech companies should invest in working with recruitment partners that offer these services.

Why Inspire People are Different

Inspire People is an organisation that offers talent services to tech start-ups, scale-ups and established organisations that ensure an efficient and successful approach to recruitment. We don’t use any methods associated with contingency recruitment and instead offer a range of talent acquisition consultancy and support that is tailored towards businesses working in the Tech for Good sector.

This focus is reflected in our values; we believe that technology has the power to bring about impactful societal change, and we want to work with organisations that are going to make this happen. Our talent services utilise our industry insight and connections to source candidates with the ideal skills and experience for roles ranging from DevOps engineer to Cloud architect, whether you’re looking for a contract or permanent hire.

Our talent services are grounded in the ethos of ‘Finding the Fit’ which means that we prioritise screening candidates for both essential skills and desirable traits and values. This ensures that candidates are matched with roles that suit their experience and personality and that our clients experience smoother onboarding and increased employee retention.

We use a range of innovative candidate-sourcing techniques to ensure that we find the best talent for our clients. Our network is built on long-term relationships and sustained connections, and we can tailor our headhunting approach for executive search if clients have a particular kind of candidate in mind.

As well as our highly-rated recruitment services, Inspire People also offer support with developing an employer value proposition, which is an essential tool for standing out in today’s job market. We’ll help our clients tap into what makes them unique and attractive as an employer and then utilise this in our recruitment approach, building a desirable brand image through inbound recruitment marketing as well as featuring this EVP in job adverts.

Our specialist experience in the technology industry also means that we can offer our clients learning and development support for current employees, helping to develop and upskill the existing workforce as well as finding new members. We’ve partnered with an online training provider to offer access to a wide array of courses and IT certification exams, making it easy to develop existing skills and cultivate talent within an organisation.

Summary

We understand why tech companies might be wary about working with recruitment businesses, but our services and approach are different. By taking the time to get to know our client’s specifications, culture and values, we ensure that we find candidates that are the right fit for your business and will stay with your company for longer.

About Inspire People

We believe that technology has the power to change the world for the better and we love working with businesses whose technology or purpose has a positive impact. We help businesses that share our vision access the people, resources and strategic advice they need to achieve their digital transformation goals

Our service is designed to accelerate your digital growth. We created our offer in response to emerging challenges in an uncertain business landscape: a blend of Advisory, Talent and Project led services that will help you achieve your strategic aims and deliver more for your employees and customers. We’ll connect you to rare specialist talent, experts and insight to help you navigate your biggest challenges and remain competitive in a changed world.

Get in touch today to discover how working with us could help you innovate and grow.

Speak to our expert team on +44(0)20 7871 8550 or email  hello@inspirepeople.net