Why contingent search leads to bad hires

A contingent search is a non-exclusive search where the first person that brings a candidate that’s good enough wins. For the recruiter, it means balancing speed and quality and it also means managing the risk that they won’t get paid for the work.

Managing the risk of being paid

In a contingent search, each agency has a simple choice, they can go for the best person (which may take longer), or the most convenient person (who’s never the best hire).

They may want the best for their client but the end outcome will depend on what the other agency is trying to achieve.

Let's use the prisoners dilemma to see how this plays out.

• If Ella goes for the best hire, she will either earn nothing or have a 50% chance of earning a commission
• If Ella goes for the average hire, she will either earn a commission or have a 50% chance of earning a commission

Therefore, to maximise the chance of getting paid, Ella will go for the average hire.

We want you to hire great people, not convenient people

Berg doesn\t participate in any non-exclusive work because it conflicts with our core mission, finding people that will take your business from good to great.

Some people believe that an exclusive process may lead to less urgency (competition makes people faster) and this may be true for some businesses but not ours. The entire founding team has come from the expert network industry, where potential consultants must be delivered in less than an hour.

Getting the best talent

Whichever way you look at it, a contingent search will incentivise the fastest acceptable candidate. It will incentivise pushiness to get the deal over the line and focus on ensuring the agency gets paid for their time.

If you want fast and average, go contingent.

If you want fast and great, go retained.

Some hiring managers might be worried that retained search means that they pay money regardless of if an acceptable candidate arrives or not but here’s the thing. It’s not difficult to find average candidates.

We all have Linkedin recruiter accounts. We know everyone in the world who’s currently looking for a job and it takes only a few emails to get them interested. A retained search will always deliver at least the level of a contingent search with the opportunity for upside!

The only financial difference of a successful search is the cadence of spending the money. Retained search means you pay your fees earlier and contingent means you pay later.

Just remember that, with a bad hire, you’ll be paying a lot.