The Death of Contingency Recruiting
A Broken Business Model
The majority of recruiters in Colorado and around the country have been working off of the contingency model. In this model, a recruiter works to find right the candidate for an open position and if that candidate gets hired, the company pays the recruiter a fee.
This model seems reasonable. Money only changes hands when a company hires a recruiter’s candidate, and that candidate stays employed for a predetermined period of time.
The contingency model, however, has some inherent problems. As fees for placements rose, and the barriers to entry to become a recruiter faded, thanks in large part the rise of technologies like Linkedin, the pressure to get a job opening before your competition filled it became intense.
Recruiters (experienced or otherwise) played the numbers game. Instead of finding the perfect person to fill a job opening they would try to find many people that ‘may’ be a good fit with the hopes that one of them worked out. Furthermore, the recruiter turned into a master salesperson and would regularly “sell” a job to a candidate and vice versa not addressing actual fit.**
It gets worse. It is common practice to sign several agreements with multiple companies for the same type of position. Then, when the recruiter finds a qualified candidate they “shop” that candidate to all the companies. This approach of hedging your bets appears necessary, but in reality it’s a poor model that creates tension between recruiters and hiring managers (and candidates) because of it’s inevitable move towards quantity and not quality. Needless to say- there is no promise of delivering “the best” candidate to a particular client, it’s just about the most recent interested party to (hopefully) agree to be submitted- AND- often it’s to the highest bidder(s)…not to the org with the best fit…
More often than not, recruiting companies in Denver, Boulder and beyond focus on the numbers game as the primary part of their daily operations. Part of that strategy includes hiring young and inexperienced ‘recruiters’ to make a minimum of 75 calls a day to candidates. These newly minted recruiters are supposed to have an intelligent conversation with highly experienced engineers to determine both culture and technical fit. Let’s just say I can’t blame candidates for not picking up the phone…
This is precisely where things went south – the recruiter went from experienced, accountable matchmaker, with a genuine interest in the best potential fit for both company and candidate- to a pure salesperson, concerned only with his or her bottom line.
Needless to say, there are other more egregious practices that go beyond the level of acceptable / ethical behavior- but I’ll spare you those for now.
At the heart of the problem is the poor dynamic between the three parties- hiring manager, recruiter and candidate. There was no alignment of goals, and poor execution became the norm. The model was officially broken.
The Question of Culture
I have worked as a recruiter placing candidates at startups in Boulder and Denver for Colorado technology for fifteen years. From Rails to Sales; from Front End to C-Level, I’ve worked with them. Most have gone well. A few have not. Along the way it became readily apparent to me that if the candidate meets the base requirements for a position, their long-term success or failure is almost always determined by cultural fit.
While this seems self-evident to most hiring managers, most recruiters are unwilling or unable to spend the time with companies to truly understand what makes a company tick. Even if they take the time to get to know a company- resumes still fly readily, without attention being paid to actual team fit. They throw a bunch of candidates against the wall based purely on keyword matches- in hopes that one will stick. The result is too often an unhappy candidates and disillusioned hiring managers.
The Birth of Project Based Team Building
At Technical Integrity, we decided from the beginning, that we were going to do things differently. Driven by the Boulder startup mantra, “Give First” we spent a lot of time and energy helping to build the Colorado Startup Community, with a focus on making sure that the entire ecosystem met the needs of all involved.
We also decided to do something (that should not have been) revolutionary in the world of recruiting. We decided to treat people as they deserve to be treated- and be genuine, honest partners in the process. We promised both our clients and our candidates to always listen and avoid the ‘pushy-salesy’ approach. We are candid at every turn, and we have nothing to hide.
Career moves are a big deal. It can change the course of someone’s life. We do not take that lightly.
For the startups we work with, hiring the right team is often the difference between life and death. With that in mind, we know that it’s important to take the time to get under the hood and understand what makes that company go.
Our approach has resonated within the Colorado technology community, and we have had some great success while working with some incredible organizations like SendGrid, Gnip (acquired by Twitter) and SpotXChange, to name a few.
That said- it has become clear that there is a logical evolution of talent acquisition for us;
The model is simple:
- Focus on long term, honest and candid partnerships with a holistic view towards building enthusiastic and engaged teams for high growth organizations.
- Work as a dedicated recruiting partner with an eye towards cultural alignment and deep technical assessments.
- Educate both clients and candidates on industry best practices that result in more productive teams and higher retention rates.
- Guarantee access to the best candidates for a given skillset, for the duration of the engagement.
- Continue to ‘Give First’ and help the Colorado startup community thrive.
We’re calling it Technical Integrity Team Building, and we invite you to learn more about not only what we do, but why and how we do it.
** Author’s Footnote ** There are indeed a small handful of ethical contingency based orgs in Colorado and beyond that care about delivering quality results. The unfortunate reality is that this number is incredibly small in comparison to the firms in our industry that do not focus on honest partnerships for all parties as a primary consideration. The model is terribly flawed and that is precisely why we are recommending a new approach.