by Mark Oppenheim
Use of contingency recruiting often wastes time & money and harms nonprofits – don’t do it. Contingency recruiters fund part or most of their work until they convince clients to hire candidates they introduce. Certain HR Departments engage these folks to extend their recruiting workforce at what seems to be low cost and risk; however, incentives for these recruiters are perverse and recruiting results are substandard.
How do contingency recruiters go about identifying candidates?
In contingency recruiting, HR Departments limit their commitment to any particular recruiter, recruiting process or outcome, and the HR Department seemingly is positioned to exercise power over financially exposed recruiters waiting to be paid. As a result, the contingency recruiter’s every incentive is to take a least-cost, platform & ATS-reliant recruiting approach, quickly identify job seekers whose resumes are increasingly also shaped by AI, filter candidates based on how well they present on video and in person, and pass on to clients the resumes of the most charismatic of these thinly researched candidates.
Candidates are sometimes given a test to take. We predict that this practice will increase because tests are easily administered, quickly given & graded, are cheap, and results can be shaped to deliver the impression that candidates who pass are technically competent and a good personality fit. One problem: there is scant evidence of any correlation between such test scores and success in a position with a nonprofit.
It is beyond the ability of contingency recruiters to fund more costly and rigorous person-to-person outreach, intel-gathering, interviews by experts, fact checking or contextual analysis of the claimed experience and accomplishments of candidates. The financial model that pays contingency recruiters doesn’t reward time spent that way.
So if your nonprofit is in reality being served by recruiters functioning as the human interface for Linkedin, Indeed, Idealist, etc., you might as well do that yourself. It’s less expensive and at least you’ll have better exposure to interesting data.
The consequences for nonprofits of contingency recruiting
Since contingency recruiting rewards speed, volume and activity, candidate pools generated this way fall to the left (ie. the below average) side of the talent bell curve.
You will get to see the subset of current jobseekers who are conveniently engaged and those always on the hunt. While there may be outliers, contingency recruiting isn’t shaped to invest in engaging busy people who aren’t looking, or those who are particular about their next professional move.
It’s not in the interest of a contingency recruiter to find inconvenient data that might slow hiring, so contingency recruiters consciously or unconsciously avoid such information.
Advancing candidates based on their ability to sell themselves into a role is in the contingency recruiter’s best interest. When nonprofits hire such people, management team attributes shift toward favoring leaders who are attractive and charismatic. An ability to convince becomes more important than the ability to quietly deliver concrete results.
Nonprofit clients go into a contingency recruiting process being assured that they gain access to the universe of available talent. Instead they get lots of thinly sourced resumes, and valuable time is absorbed interviewing lightly filtered job seekers able to charm and convince.
So here’s the bottom line…
Contingency recruiting is attractive because it’s cheap, easy & fast, but contingency recruiting harms nonprofits over time. Results are poor, staff performance declines and there’s higher turnover.
So don’t do it – you have way better options without the downsides.