Season 6, Episode 7:

How Does Research and Sourcing Fuel Recruiting?

We employ several experienced recruiters who have worked at a variety of firms, each with different business models. Given their broad experiences in the field, we were curious to see what they thought of each model. Check out the video to see two of our recruiters, Hanna and Ken, discuss the issue.

What Are the Pros and Cons of Contingency Recruiting?

According to Hanna, the best thing about contingent recruiting was the opportunity to do things outside of the office. Hanna said she went to a lot more IT meetups and lunch-and-learns, and got to interact with the community.

As for disadvantages?

“They preached that they were all about quality over quantity…but in actuality, the metrics and everything was driven by quantity. “Where’s your dials, where’s your submittals, where’s your leads?” When in actuality it should be, “What’s your submittal to hire ratio? What’s your submittal to interview ratio? What’s your retention rate?” Those are the things that matter to me about whether you’re a good recruiter or not.”

Ken mentioned how contingency recruiting often encourages you to rush the process a little. Whoever submits a candidate first gets rights to the candidate. As a result, recruiters working by commission will often submit a candidate even if they don’t quite meet the qualifications on the off chance they do get hired. It puts a direct conflict of interest between quality of hire and the recruiters’ own profitability.

What Are the Pros and Cons of Retained Recruiting?

Ken brought up how one of the biggest pros of retained recruiting is that it fosters a stronger relationship between recruiters and the client. The client wants to see the recruiter be successful, so they are often more communicative and more responsive to your needs.

As for the problems with this model, you’re still competing with other recruiters and the fee is often rather high for the client. In some cases, you are unable to make the placement, and the client is unhappy because they’ve already spent a significant amount of money on the services…but they didn’t get anything out of it.

Ultimately, Ken believes retained is a little better than contingent because it builds more of a relationship.

What About an Hourly Model?

Ken said the hourly model was the best he’s worked with.

“I think we have a very unique model…it significantly has its advantages…it’s got some of the retained advantage, where it fosters a relationship with the client, but it doesn’t have that high cost fee.”

“From the recruiter standpoint, you’re giving up a little bit maybe the ability to earn a high commission earning, but the tradeoff would be its a lot less of a stressful environment. You’re not terribly worried about speed to market, getting as many candidates as possible, just to make a placement so you can get that commission check.”

Hanna concurred.

“What I like about the hourly model is that not all roles are made equal. Right now it’s pretty much a standard 20% hire fee in direct hire firms and that’s not always enough for certain types of positions. And in the hourly model, we get to actually charge what it does cost to find those high level, very niche, very specific roles that are out there…we also have the option to hold ourselves more accountable to metrics based on quality…our clients trust us that if we send one candidate over, and that’s THE candidate, they’re okay with that.”

Clearly there are advantages and disadvantages to each recruiting model – but we’ll always be partial to the hourly structure!

About Recruiter Fuel

Recruiter Fuel is a weekly video series dedicated to all-things recruiting and talent acquisition. Learn More our mission and how you can submit a topic, be featured in an episode, or nominate an expert to guest star on an upcoming episode.

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