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How Contingent (No Win/No Fee) Recruitment Agencies Work

Reading Time: 2 mins

Beware of strangers bearing gifts!

Hiring managers often turn to contingent recruitment agencies in a pinch, especially those that can quickly send over CVs to meet immediate needs – much like the lure of cake to a fat kid.

These agencies are effectively brokers selling options to buy job seekers, typically offering a quick service based on their reach and access to candidates, but this reach is always limited to active job seekers already registered with them. As a result, the candidates they present are often tactical job seekers making short-term, deadline-driven career moves, rather than those focused on strategic, long-term fits.

The odds of finding someone for a specific role (with no financial incentive involved) are not as good as finding clients for a specific candidate – the recruiters priority is placing the candidate over addressing the unique needs of the role. This highlights the fundamental difference between a service-oriented approach and a true solution-driven strategy.

Operating on a “no-win, no-fee” basis, with no incentive to conduct a tailored search, these agencies rely on volume to succeed, individual recruiters generate and manage multiple open roles, but are unable to dedicate time to deep, targeted searches – their KPIs are all related to generating jobs not candidates. By reposting client job descriptions across job boards and their own sites, they become competitors rather than allies to the hiring company, diluting its unique brand and candidate reach.

Internally, agencies prioritise roles based on their likelihood of a quick placement – challenging roles, low-fee clients, niche requirements, and below-market salaries receive the lowest priority and, consequently, minimal attention. This explains why hiring managers often see an initial wave of CVs followed by radio silence. With no upfront payment these recruiters are not incentivised to proactively find candidates.

Engaging multiple agencies for the same role doesn’t yield better results, despite feeling like improving the odds of success – it usually leads to overlap, with candidates approached by several recruiters for the same position. This practice can erode trust in the hiring company, similar to a house with too many “for sale” signs.

In the end, these agencies operate in a sales-driven environment, where placements are often a by-product of volume rather than a result of a focused, strategic search, making this a suboptimal approach to recruiting for complex, high-stakes roles.

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