The Inside Scoop on How to Work Most Effectively with Contingency Recruiters

Who is this article helpful for? Founders, hiring managers, heads of people, internal recruiters and anyone that has decided to engage with a contingency recruiter to make a hire.

I spent three years as a contingency technical recruiter at one of the most highly-respected recruiting agencies, SingleSprout, where I learned an incredible amount. In January 2021, I joined a venture capital fund, FirstMark, to work directly with startups backed by the firm.

Given these experiences, I thought I could provide a unique perspective into how startups can get the most out of working with contingency recruiters. The 7 key points:

1. Understand what actually happens inside contingency agencies (and how they differ from retained search firms)
2. Understand recruiters’ financial incentives
3. Be extremely clear about what you’re looking for
4. Give feedback quickly and often
5. Provide strong selling points for your company and team
6. Partner with recruiters to close candidates
7. Remember that recruiters are an extension of your brand

Understand what actually happens inside contingency agencies (and how they differ from retained search firms)

What contingency agencies don’t do: source for your company specifically. It’s important to note that the majority of contingency firms are not specifically sourcing for your company. If you need someone dedicated to sourcing for a role, you should look into engaging a retained search firm. Retained firms are typically more expensive, but they dedicate specific resources to source for the role. Retained firms are typically best for VP and C-Suite level searches*

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What contingency agencies do, do: source more generally for great talent and then submit to the companies within their client list that would be a fit.

*Sometimes contingency firms will have “embedded” models where they will have a dedicated recruiter working on your roles. This is something you should discuss further to see if this service makes sense for your hiring needs.

Understand recruiters’ financial incentives

Most recruiting agencies charge a fee (anywhere between 20–30%) of the candidate’s first year salary. It’s ok to negotiate, but recruiters will naturally work harder for the companies that have a higher commission potential so you will want to make sure you are paying a fee that is in line with their other companies in their portfolio.

Also, if possible, let them work on more than one role. You don’t pay them until a hire is made so you might as well see the resumes they have to offer and then decide if you will continue to engage. If you give a recruiter one really difficult role (for ex., DevOps Manager), it is unlikely that the recruiters will prioritize your company, however if you give them multiple roles, they will be thinking about, talking about, and pitching your company more often.

Be extremely clear about what you’re looking for

During the initial onboarding call, founders — who are very used to ‘pitching’ their company — understandably fall into pitch mode. I would recommend spending much more time on what the ideal candidate looks like, and less time talking about past exits, the business financials, how much you’ve raised — agencies don’t need to know all of the details (and they probably already researched these bits of information anyway)

Make sure you share the answers to these questions with the recruiters:

• What skills are you missing on the team that this person must have?
• What are the “nice to haves” but not mandatory?
• How many years of experience is necessary?
• Who will this person report to (and manage if it’s a leadership role)?

Share a few ideal profiles with them, any companies you would want them to focus on sourcing from, any companies to avoid, etc. Lay out a clear, succinct interview process that you share with the recruiters at the start of the process. Lastly, be realistic when sharing the budget for the role from the get-go.

Give feedback quickly and often

An extremely important, and underrated, part of the process is the calibration period. This is the period in which you will go back and forth with the contingency recruiters on a few candidates until you start seeing the right profiles.

This will naturally take time, but to shorten the calibration period, I recommend giving the recruiters as much feedback as possible early on. If you are not happy with the first batch of candidates you see, share specific reasons as to why so they can change their approach and send the right people your way sooner.

One way to shorten the feedback loop is to establish a direct channel of communication with your contact person at the recruiting company. Communicating over slack or text, especially for time sensitive candidates, is usually easier than email if those mediums work for you.

Provide strong selling points for your company and team

It seems obvious but it’s critical to note that external recruiters will be pitching your company before the candidates talk to anyone who works at your company. For this reason, you’ll want to arm contingency recruiters with crisp bullets on why your company is great, what your competitive edge is, why you have a strong culture, and what you offer to employees.

I would suggest you carve out 30 minutes to get in front of the recruiters and share your top selling points. Just as importantly, share the most common concerns you’ve heard from candidates about your product and how you typically respond, to help recruiters overcome any pushbacks early on. This 30 minute investment will pay off.

When time permits, I always found it helpful when companies would do a quick demo so our team of contingency recruiters could have a better understanding of what the product does, and therefore, sell it better.

Partner with recruiters to close candidates

Once you’ve set your recruiter on the right track, you’ll start to see excellent candidates — and ultimately you’ll reach the offer stage. One common mistake that companies make is the decision not to involve their agency in the details of the candidate close process.

Recruiters develop close relationships with their candidates, and you should use that to your advantage. They likely know key information about the candidate that will help get them over the finish line.

Be transparent and collaborative when thinking through compensation, offer presentation, and how to sell the opportunity. Recruiters often have a lot of valuable data, as they work with many startups at a time, so if you’re unsure about budget or what a good offer process looks like, ask them and they can provide guidance here.

Lastly, remember that recruiters are an extension of your brand

Be nice to them — you want them to want to hire for you. They are the ones who will go to bat for you and push the candidate forward in the process and it is a very competitive market. Do what you can to ensure that the recruiters talk about your company intelligently, and with genuine excitement.

Finally — make sure to vet out a few firms to find the right recruiter for your company. It’s important to choose high-quality recruiters who understand they are an extension of your brand.

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