- Southeast Asian companies, including those in the Philippines, face significant challenges in hiring and retention.
- Headhunters provide services like offshore staffing, resume sourcing, and contingency search to help businesses overcome hiring challenges in today’s competitive market.
- Contingency search is a “no win, no fee” recruitment model where businesses only pay when a candidate is successfully placed, making it a cost-effective and low-risk option.
- Sysgen RPO is a trusted recruitment partner in the Philippines that leverages its decades of experience and a client-driven approach.
Hiring and retention are major challenges for 64% of Southeast Asian companies. The Philippines, for example, has one of the highest rates at 19.1%—second only to Indonesia’s 20.8%.
As a response, many organizations are turning to recruitment agencies to navigate the complexities of today’s competitive talent market. These firms offer offshore staffing and resume sourcing, helping businesses access a wider pool of candidates and reduce time-to-hire.
However, contingency search stands out as a solution for companies looking to fill critical or high-level roles. Unlike other strategies, recruitment agencies only require fees once a candidate is successfully placed.
This article will cover everything you need to know about contingency search. We’ll explain what it is, how it works, and its benefits for businesses. You’ll also discover how to maximize contingency search services.
What is Contingency Search?
A contingency search happens when employers partner with recruitment agencies to find candidates for an open position. It is commonly used for filling mid-level to specialized roles, which may need specific skills or experience that internal HR teams may not easily find.
Commonly called a “no win, no fee” strategy, contingency search means that employers don’t have to pay the headhunters unless they successfully place a candidate. This makes it a cost-effective and low-risk solution for businesses looking to hire quickly and efficiently.
But how does contingency search differ from other recruitment models?
Retained Search
Retained search or executive search is a more proactive approach, where an employer partners with a recruitment agency exclusively. This model is typically used for executive-level roles or positions requiring a highly specialized skill set, where headhunters extensively vet candidates to find the perfect fit.
Unlike contingency search, the employer commits to paying the fee, whether or not the search is successful. The upfront payment ensures that the recruiter dedicates their full attention and resources to finding the best candidate for the role.
The fee for these services is typically higher than for other types of recruitment due to the specialized nature of the roles and the extensive process involved. However, the payment is often split into three installments:
- Initial payment: Paid when the search begins.
- Midway payment: Paid when a shortlist of candidates is presented.
- Final payment: Paid upon successful placement of the candidate.
The investment is often worth it because an executive-level hire brings great value to your organization.
Related Reading: Retained Search: Why and When to Get It
In-House Recruitment
In-house recruitment refers to a company’s internal HR team managing the hiring process directly. This method gives companies full control over the recruitment process but may lack the extensive networks, specialized expertise, and industry knowledge that recruitment agencies provide.
While in-house recruitment can be effective for filling entry-level or high-volume roles, it may struggle when it comes to sourcing candidates for more specialized or senior positions. This is where contingency search stands out—providing an effective solution without the need for internal resources to manage the hiring process.
Common Misconceptions About Contingency Search
When it comes to contingency search, several misconceptions can prevent businesses from fully realizing the strategy’s potential. Let’s debunk some of the most common myths!
1. It’s Only for Entry-Level Roles
Many people think contingency search is just for entry-level jobs, but that’s not the case at all. Reputable agencies are fully equipped to fill mid-level and even executive roles with the right expertise and leadership skills.
2. Speed Over Quality
Another myth is that contingency search prioritizes speed at the expense of quality. While the model is designed to deliver results quickly, top-tier agencies focus on finding the best candidates by using thorough screening methods and industry knowledge to ensure a great fit.
3. Limited Talent Pools
There’s a misconception that agencies have access to a small group of candidates. In reality, skilled recruiters also use wide networks, advanced sourcing technologies, and deep industry knowledge to tap into a diverse and broad range of talent, even for specialized roles.
4. Only Suitable for Large Companies
Although contingency search is often seen as something only large corporations use, it’s highly effective for small and medium enterprises (SMEs) too. SMEs can benefit from this cost-efficient hiring solution, gaining access to top talent without investing in a full-time recruitment team.
How Does Contingency Search Work?
Contingency search is a “pay-for-success” model focused on connecting businesses with the right candidates efficiently and effectively.
There are three key players in this recruitment strategy, namely:
- Headhunters or Recruiters: These people are the driving force behind the contingency search process.
- Employers: This term refers to the organizations looking to fill a vacancy. They define the specific requirements for the role, including qualifications, skills, experience, and cultural fit.
- Candidates: Candidates are the individuals being considered for the position. They usually go through a thorough screening process, which may include resume reviews, interviews, reference checks, and skills assessments.
Now, that we know the people involved, let’s dive deeper into how the contingency search process works step-by-step!
Step 1: Source Candidates
Recruitment agencies start by leveraging their networks, job boards, and databases to identify potential candidates. Headhunters also tap into passive candidate pools—individuals who may not be actively job hunting but are open to new opportunities. By utilizing these diverse sources, they cast a wide net to identify candidates with the specific skills, qualifications, and experience you need.
Step 2: Screen Applicants
Once your recruiters identify potential candidates, they will review their resumes to assess whether their skills, experience, and qualifications align with your job requirements. This stage may also include initial phone or video interviews, where headhunters assess not only the candidate’s technical abilities but also their soft skills, personality, and cultural fit for the company.
Some additional steps can also be conducted like:
- Skills Testing: Depending on the role, candidates may be asked to complete technical assessments or tests that evaluate their job-specific abilities.
- Background Checks: Recruiters may conduct background checks to verify the candidate’s employment history, educational qualifications, and criminal record (if applicable).
- Reference Checks: This involves contacting previous employers or professional references to gain insights into the candidate’s past performance and work ethic.
- Psychometric Testing: Some headhunters may use psychometric tests to evaluate a candidate’s cognitive abilities, personality traits, and behavior patterns to ensure alignment with the role and company culture.
Related Reading: Tips to Improve Candidate Experience
Step 3: Shortlist the Best
After the screening, recruitment agencies will shortlist the best candidates who stand out because of their overall suitability for the role. This step allows you to move efficiently to the interview stage, avoiding the time-consuming task of sifting through a large number of unqualified applicants.
They narrow down the pool based on the following criteria:
- Relevant experience: Candidates who have demonstrated success in similar roles or industries.
- Qualifications: Ensuring candidates possess the required education, certifications, or professional credentials.
- Skills: Assessing both technical competencies and soft skills necessary for the job.
- Cultural fit: Evaluating whether the candidate’s values and personality align with the company’s culture.
Step 4: Negotiate Terms
A recent survey found that 40% of employees feel underpaid. To avoid this, once the shortlisted candidates have been interviewed, the recruitment agency will help negotiate salary, benefits, and other terms to ensure both the employer and candidate are on the same page. This step finalizes the offer and addresses any concerns, making sure the transition into the role is smooth for both sides.
For example, suppose a candidate is seeking a higher salary than initially offered. In that case, the recruitment agency can help find a compromise, perhaps by offering additional benefits such as flexible working hours, performance bonuses, or career development opportunities. This approach ensures the offer remains attractive to the candidate while staying within the employer’s budget.
Challenges of Contingency Search
As a “no win, no fee” recruitment strategy, contingency search offers flexibility and reduces financial risk, making it an attractive option for businesses. However, this also introduces unique challenges that can complicate the hiring process:
1. High Competition Among Agencies
More often than not, multiple agencies are working on the same role, which leads to high competition to fill the position first. For example, they may send candidates quickly without fully assessing their long-term fit or compatibility with the company’s culture. This can result in higher turnover or mismatched hires that can affect your company’s ability to build a strong, cohesive team.
2. Limited Candidate Engagement
Contingency search often targets passive candidates—those who are not actively seeking new opportunities—so persuading them to consider new roles can be a challenge. Moreover, since passive candidates may not be fully invested in the search, there is a risk that they could lose interest or withdraw from the process at a later stage, further complicating your recruitment efforts.
3. Difficulty with Niche or Senior Roles
Specialized or senior-level positions require expertise and in-depth industry knowledge, especially within a limited talent pool. For instance, agencies without a deep understanding of financial regulations or the technical skills required for high-level roles may struggle to identify qualified candidates. In the financial sector, positions like financial analysts, compliance officers, or investment bankers demand not only a strong grasp of industry-specific knowledge but also a deep familiarity with regulatory environments, risk management practices, and market trends.
4. Impact on Employer Branding
A rushed or poorly managed recruitment process can negatively affect a company’s employer brand. When multiple agencies are competing to fill the same role quickly, candidates may experience inconsistent communication or a lack of transparency throughout the process. In industries where attracting high-caliber candidates is critical, a negative impression during recruitment can potentially harm your organization’s reputation in the talent market.
Related Reading: Building a Great Company Culture to Fuel Your Recruitment Needs
Industry-Specific Applications of Contingency Search in the Philippines
The Largest Staffing Firms Globally 2023 Report reveals that the world’s 100 largest staffing firms collectively generated an estimated $285.3 billion in revenue. This figure shows organizations’ growing reliance on their expertise, networks, and tailored services.
Philippine businesses are no exception. They are also leveraging contingency search to meet talent demands in several key sectors:
1. Tech
The tech industry in the Philippines is booming, with the IT-BPM Association of the Philippines predicting 1.1 million new jobs by 2028, including 150,000 developer roles to be filled in the next six years.
As the demand for highly skilled developers, software engineers, and IT specialists is at an all-time high, contingency search enables local businesses to swiftly secure top talent to remain competitive.
2. Healthcare
Despite being the world’s leading supplier of nurses, the Philippines is grappling with a 127,000 nursing shortage, projected to grow to 250,000 by 2030. To address these challenges, staffing firms can help hospitals and healthcare providers bridge this gap by sourcing qualified professionals, particularly in high-demand specialties like oncology, anesthesiology, and critical care.
3. Engineering
According to the Department of Labor and Employment, there is a shortage of one million skilled workers in the engineering, architecture, and construction sectors. This poses challenges for businesses seeking to meet deadlines, ensure quality, and drive growth in a highly competitive industry. Staffing firms using contingency search address this gap by sourcing certified professionals with the right expertise and experience to drive progress.
4. Accounting
A 41% drop in enrollment in accounting programs and a 35% decline in Certified Public Accountant (CPA) examinees between 2019 and 2023 has led to a serious shortage of accountants in the Philippines. This talent crunch makes it increasingly difficult for businesses to find qualified accounting professionals to manage their financial operations effectively.
5. Digital Marketing
The Business Manual emphasized the rising demand for positions requiring advanced digital skills, particularly in digital marketing professionals and leadership roles such as Chief Marketing Officers (CMOs). With more businesses focusing on online presence and e-commerce, finding skilled professionals in digital marketing is crucial to staying competitive in the market.
6. Business Process Outsourcing (BPO)
Despite the BPO industry’s growing adoption of AI technologies, over 60% of IT-BPM companies face challenges in finding talent with the necessary AI and cybersecurity skills. As a result, the competition for adept workers is intensifying, making it even more crucial for agencies to find candidates who not only meet job requirements but also fit the company culture and thrive in fast-paced environments.
Related Reading: How to Find the Best Recruitment Agency for Your Needs in the Philippines
Benefits of Contingency Search for Philippine Enterprises
Contingency search Contingency search offers a strategic advantage for businesses in the Philippines, helping them overcome hiring challenges with minimal risk.
Here’s why this recruitment model is so valuable:
1. Cost-Efficiency
The average cost of hiring a new employee can reach nearly $4,700, which is about ₱270,000! That’s a pretty heavy expense for SMEs to manage, especially if you’re hiring for multiple roles in senior-level or C-suite roles
With contingency search, you only pay when a candidate is successfully placed, so you don’t waste money on recruitment that doesn’t work out. This makes it a much cheaper and safer option for businesses, helping you keep costs down while still finding the right talent.
2. Access to a Broad Talent Pool
64% of companies in Southeast Asia are struggling to hire or retain employees, and the competition for top talent is only going to intensify. One in three organizations plan to increase their headcount by 5% to 20%, further fueling the demand for skilled professionals.
By working with staffing firms, you can tap into a much broader talent pool, including specialized and executive-level candidates who might not be actively job-hunting. This increases your chances of finding highly skilled professionals who can make a real impact on your business.
3. Streamlined Hiring Process
On average, it takes 44 days to fill an open position after posting a job. For executive roles, this waiting period can feel even longer and more critical, as these positions are often key to driving business success.
With contingency search, headhunters manage much of the process—from sourcing to screening and interviewing—so you can fill these important roles more quickly. This streamlines the hiring process, saving your business valuable time and ensuring that senior-level positions don’t remain vacant for too long.
4. Flexibility
Your HR team can already be overwhelmed with their workload like payroll, making it difficult to take on additional responsibilities like urgent hiring. For instance, if a senior manager resigns out of the blue, they might struggle to prioritize sourcing and vetting the right candidates.
Contingency search helps you bypass these challenges by bringing in external recruiters who focus solely on filling the role, freeing up your HR team to focus on other critical tasks. Plus, since you only pay for successful placements, you’re not locked into a fixed process of hiring single or multiple key roles at once.
Related Reading: Offshore RPO 101: Benefits, Best Practices, and Challenges You Should Know About
How to Maximize Contingency Search Services
Your journey doesn’t end after deciding to embrace contingency search services. To really get the most out of this recruitment model, you have to approach the process strategically.
Here are a few tips to help you maximize the value of your partnership:
Tip 1: Choose the Right Partner
Don’t just select a recruitment agency based on affordability, popularity, or brand recognition. Instead, focus on finding a firm that has experience in your industry and a proven track record of successfully filling similar roles.
Take the time to check their reputation, read client testimonials, and ask for case studies to ensure they can deliver results that align with your hiring goals.
Tip 2: Communicate Clearly
Right from the start, set clear expectations with your recruitment partner. Be specific about the skills, experience, and qualifications you’re looking for in a candidate, as well as the type of company culture fit you need.
For instance, if you’re looking for a Chief Financial Officer (CFO), you might specify the need for strong financial forecasting skills, experience in managing large teams, and a deep understanding of regulatory compliance.
Tip 3: Leverage Technology
Many recruitment agencies use advanced tools like applicant tracking systems (ATS), and recruitment analytics software. These tools help streamline the hiring process by automating resume screening, identifying the best-fit candidates, and providing data on key metrics like time-to-fill and quality of hire.
By working with agencies that use these technologies, you can benefit from faster, more accurate hiring decisions and ensure your recruitment process stays ahead of the competition.
Tip 4: Collaborate
A successful contingency search relies on strong collaboration between your internal HR team and the recruitment agency. Align your processes and ensure both sides are working toward the same hiring goals.
Share as much information as possible about the role, company culture, and your expectations to give the headhunters a clear picture of what you need. Regular check-ins and open communication will also help keep the process on track and allow for adjustments if needed.
Related Reading: The Keys to Success(ful Hiring): The Ideal Offshore RPO Services Provider
Why Choose Sysgen RPO for Contingency Search in the Philippines?
Sysgen RPO stands as a trusted leader in recruitment process outsourcing, offering specialized contingency search services tailored to meet the unique needs of Philippine businesses.
Let’s talk about why you should consider Sysgen RPO as your recruitment partner!
1. Decades of Proven Expertise
Originating as an IT staffing company in 1991, Sysgen RPO evolved into a leading provider of offshore RPO solutions. With over 30 years in the recruitment industry, the company has delivered impactful results through customized strategies through numerous companies.
2. Access to Highly Skilled Talent
Sysgen RPO provides immediate access to well-trained recruiters based in the Philippines. These professionals offer flexible, cost-effective solutions that ensure your organization can quickly adapt to changing recruitment needs while maintaining quality and efficiency.
3. A Partnership-Driven Approach
The recruitment agency prioritizes building lasting partnerships rather than transactional client relationships. By understanding your specific needs and goals, Sysgen RPO provides personalized services that enhance your recruitment and even business outcomes.
4. Client-Endorsed Excellence
Clients consistently praise Susgen RPO for affordability, customer service, and the high quality of candidates it provides. Testimonials highlight the company’s commitment to understanding client requirements and adapting quickly to the competitive talent market.
Unlock the Power of Contingency Search with Sysgen RPO
Are you looking to overcome the hiring challenges in the Philippines? Sygen RPO is here to assist you! With over three decades of experience in the recruitment industry, we understand the importance of finding the right talent quickly and effectively.
Our contingency search services are designed to help you access a broad pool of qualified candidates, streamline your hiring process, and reduce the risks associated with recruitment.
Whether you’re in tech, healthcare, engineering, or other high-demand sector, we can help you find the right fit for your business. Contact us today to learn how Sysgen RPO’s contingency search services can simplify and accelerate your hiring process.