Contingency Recruiting Pros & Cons
Successful payments and fintech companies face the constant challenge of finding and attracting top talent to drive their success. To address this challenge, contingency recruiting may be an option for your payments or fintech organization.
The contingency recruiting model leverages external recruiters to find suitable candidates for job openings, with payment contingent upon successful placement. As compared to other types of talent acquisition strategies, contingency recruiting is a popular choice for emerging and mid-market payments and fintech organizations because it requires a low up-front investment and limited time commitment on behalf of the business.
While this approach offers cost and resource advantages, it also comes with some disadvantages. Let’s explore some of the pros and cons of contingency recruiting.
Pros of Contingency Recruiting
The placement fee of 20 to 25% of the first year’s salary is only paid when a candidate is successfully hired, reducing financial risk.
Payments & Fintech contingency recruiters have more extensive talent pools and access candidates who might not be actively searching for jobs on job boards or company websites.
Contingency recruitment does not require long-term contracts, or any guarantee of on-going compensation is required or expected from the company.
Third party contingency recruiters are compensated based on finding suitable candidates quickly, often resulting in a faster hiring process.
Hyper focused contingency recruiters like Group W Partners specialize in the payments and fintech industries providing a deep understanding of the skills and qualifications needed resulting in more successful hires.
Cons of Contingency Recruiting
Due to the impact of the pay for results business model the potential uncompensated costs for contingency recruiters drives a quantity of less vetted candidates, superseding candidate quality.
Contingency recruiters can’t guarantee that a successful placement will occur, the hiring evaluation and final decision is the responsibility of the hiring team.
The contingency recruiter is not compensated for administrative and reporting tasks limiting insight into activity, results, and weekly reviews.
Candidates are not exclusive to any client company and can be presented to multiple clients in order to maximize the chance of earning placement fee.
The pay for results pressure to fill positions quickly can lead to suboptimal candidate matches as compared to a fee based or outsourced recruitment model focused on a partnership driven approach.
The evaluation to use contingency recruiting should align with your company's specific hiring needs, position level, and priorities. Many organizations strike a balance between contingency recruiting, contained recruiting and RPO recruitment methods to find the best candidates based on the position requirements.
As part of your careful consideration of the pros and cons, give Group W Partners a call to discuss and help you make an informed choice that leads to successful hires and long-term organizational success.
Founded in 1999 Group W Partners is a team of payments industry executives connecting top payments talent with emerging, mid and F500 payments and fintech organizations.
