If you are looking for a new job, you are going to need some new tactics in your recruiting arsenal. There are plenty of recruiters out there in the marketplace, so what will set you apart? Many of them use retention strategies, which involve keeping workers at their organization, while others use contingency recruiting, which consists in hiring workers as temporary workers on a per-project basis. The difference between the two strategies is in how employers structure their offers.
Retained recruiting refers to an arrangement where Uber pays marketers a percent of the driver’s fare if they recruit the driver. The incentive exists because Uber needs drivers, and so the company wants to give drivers a reason to sign up. On the other hand, contingency recruiting refers to an arrangement where a business pays marketers a percentage of a sale if the customer signs up for or purchases a product. The incentive exists because the business wants more leads and wants customers to sign up.
When recruiting, it is common to come across two common methods—retained and contingency. These recruiting methods essentially give recruiters options for how they approach potential employees.
Retained recruiting is the traditional form of recruiting. Unlike contingency recruiting, the company finds candidates and recruits them directly in retained recruiting. The benefits include:
- Avoiding time and cost-consuming applications.
- A faster candidate response rate.
- The best talent, as the job fit is more accurate.
- A lower hiring risk.
A company hires a retained search firm to find candidates to fill a position that’s already been filled. The firm then finds candidates who match the job description and passes them on to the hiring company.
Contingency recruiting is not retained but works with candidates who have contacted the recruiter directly. The contingency recruiter then submits these candidates to the hiring company, and if hired, the recruiter receives a percentage of that person’s salary.
Retained and contingency recruiting are the two most widely used techniques in the talent acquisition industry. Both have their advantages and disadvantages, and both have different goals. Retained recruiting is the process of using an agency to find and recruit candidates for specific positions. Agencies act as the liaison between the company and the applicants and serve as recruiters by screening candidates, targeting appropriate candidates, and presenting the best candidates to companies. On the other hand, contingency recruiting is when the recruiter is paid only when a candidate is hired. When a recruiter chooses the contingency recruiting method, they typically target candidates that would be retained, which means the recruiter is looking for a candidate who can be hired and not necessarily a candidate who would be happy working with the company.
Importance of retained and contingency recruiting:
Recruiting talent has always been a challenging task for businesses. Businesses are always on the hunt to find and hire talented people. Recruiting the right talents can make or break a business. However, there are different approaches to recruiting. Not every recruitment strategy will work for every type of business. According to talent management experts, there are four popular approaches to recruitment, all of which produce different results. Today, recruiting is one of the most important parts of your marketing strategy. Whichever way you look at it, recruiting can make or break your company one way or another. You need to know the difference between a retained and a contingency recruiting strategy.
Retained recruiting means paying a recruiter a monthly fee for recruiting for you. Then, once the recruiter brings you the top talent, they will keep them on a monthly retainer. Contingency recruiting means paying a recruiter only when hiring the top talent they get to you.
Recruiting is a vital part of company growth and success, but successful recruiting involves more than just sourcing candidates. Getting the most qualified applicants is only the first step. You also need to know how to follow up and communicate with candidates, whether they submit applications or not. It is a critical component of any successful business, but it’s important to know which recruiting strategy is right for your business, especially regarding retained and contingency recruiting; determining which one you should use and when can significantly impact your business’ success.
Retention of employees is a major concern for all companies. Retained employees offer greater productivity and lower recruiting costs. Companies that retain their employees show higher returns on investment. While there is no magic bullet to retain employees, both retained and contingency recruiting have important elements.