The global staffing market is projected to grow to $650bn (£523.4bn) in revenues in 2025, which illustrates growth of about 5% – not bad in an era of average GDP growth rates of 1.8-2.2%. The bulk of the market, about 85%, sits within what is commonly known as ‘staffing’ – and a significant proportion of the staffing market is contingency recruitment.

Unlike retained recruitment, where fees are guaranteed, contingency recruitment operates on a success-only basis, meaning the recruiter only gets paid when you place a candidate. And with average job fill rates across the recruitment industry sitting at roughly 25%, it is a sobering realisation that 75% of all the efforts of your hardworking teams may not be paid for.

However, look again at the market size numbers: contingent recruitment is alive and well and a small percentage of that 85% of the market would keep most of us very happy. Smart recruiters understand that if you are going to be active in this contingent space, and make it highly lucrative, there is a strategic approach to adopt. Here’s how, in my humble opinion, to make it work:

Work with clients that value your service

This might sound contradictory, but even if a client decides they want to work with a preferred supplier list (PSL) of four or five firms, they can still appreciate the value of a skilled recruiter. Avoid the companies that view recruiters as a distress purchase and only to be used as a last resort; target those that you know will have an ongoing need for talent, that recognise the cost of unfilled vacancies and are willing to pay fair fees – and on time.

Negotiate competitive fees

What ‘competitive’ means will vary depending on your cost to fill, but understand your profitability constraints and stick to them.

Build a strong candidate pipeline

Having a robust network of qualified candidates will always position you advantageously. If the contract is significant enough, think about creating a dedicated delivery team who source and nurture specific candidate types, creating communities that are ready to go. You will be able to respond quickly – a key factor when part of a PSL. Reduce your time to fill and increase your placement success.

Master speed and efficiency

Since a key factor in contingency recruitment success is speed, efficient processes are key. Utilising a great applicant tracking system is paramount, so you can consistently manage all candidate data, track all applications, and processes and streamline all internal and external communications. Automating tasks like scheduling and transcribing will free up time for higher value activities. 

Mitigate risk with a solid contract

To protect your revenues, always aim to have a clear and legally sound contract in place. Ensure it includes clear payment terms; refund/rebate terms that are fair and exclude scenarios outside of your control; minimum hiring commitments where possible; clear service level agreements and a commitment to the process, including not extending the PSL and/or not accepting speculative approaches outside of the list.

Develop fantastic client relationships

Repeat business and the ongoing renewal of preferred supplier arrangements is key to making contingency recruitment sustainable. Provide exceptional service and value add and you will reduce the need for constant new business development.

Choose the right niche and target high demand roles

One of the biggest mistakes SME recruiters can make is to serve too many industries or client types. Specialising in a sector or niche allows for credibility, deeper market intelligence and understanding of workforce dynamics and stronger client and candidate networks.

Contingency recruitment remains a powerful and profitable market – even more so with the right focus on cost and speed of delivery, and target client. Good luck!

Tara Ricks is a non-executive director, co-chair of Elite Leaders and director of Consulting Eve