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Finding top-level talent to fill open positions can be a challenge, especially as your company scales. But if your company isn’t always hiring new employees, an in-house recruitment team isn’t very practical. Using a contract recruiter is a cost-effective way to handle your hiring demands whenever your company is doing batch hiring.
Why Hiring a Contract Recruiter is Worth It
Unlike headhunters or traditional recruiting agencies, contract recruiters work directly with a single company for a specified amount of time. This means that the recruiter will likely spend their entire workday recruiting for your business. Once the contract terms have been fulfilled, the recruiter will move on to work with another company.
This arrangement is perfect for organizations seeking a new batch of employees at once, especially if those roles are specialized. For example, if you need to fill ten new positions over the next three months, a contract recruiter can handle this for your business.
Contract recruiters help you save a ton of time, money, and headaches.
If your company doesn’t have the internal resources to handle a quick staffing increase, it will take forever to fill those positions. But a contract recruiter has incentives to fill those positions quickly with the best potential job candidates.
As a business owner, HR director, or hiring manager, a contract recruiter will take a ton of work off your plate during these crucial business growth stages.
The Investment Needed to Hire a Contract Recruiter
The exact cost to hire a contract recruiter varies based on a wide range of factors. Factors include the complexity of the position, the total scope of the job, your industry, contract length, and the experience level of the recruiter. Contract recruiters are essentially freelancers or contractors, so they set their own prices.
Let’s say you’re looking to fill executive-level positions. The cost of a contract recruiter here might be a bit higher compared to filling entry-level sales roles.
Contract recruiters typically charge anywhere from $25 to $150 per hour. You will likely find contract recruiters somewhere in the middle of these two extremes. It’s also common for recruiters to be paid an upfront retainer fee plus a percentage-based fee after a candidate is hired.
A contract recruiter gets paid whether or not the positions get filled. The contract terms can be set for a predetermined length (like three or six months) or based on the open positions (such as when ten jobs are filled).
In addition to the contract recruiter’s salary and fees, you’ll also need to invest in recruiting software. These start as low as $25-$50 per month and range up to $200-$300 per month, depending on your hiring needs.
We like JazzHR for its collaborative features and large number of integrations, making it work for any scenario.
5 Steps to Hire a Contract Recruiter
Now that you understand the basics of what a contract recruiter brings to the table, it’s time to get out there and hire one.
#1 – Evaluate Your Hiring Needs
While you might be eager to hire a contract recruiter right now, you need to take a step back and get organized. First and foremost, confirm that a contract recruiter is right for your hiring needs.
If you’re just looking to fill one or two open positions, a contract recruiter probably isn’t worth it. You can do this in-house or work with a third-party staffing agency.
As they are generally specialized, contract recruiters are ideal for hiring in bulk, usually ten positions or more. You could also use a contract recruiter if you’re planning to expand or create an entirely new department in your company.
This initial phase also requires you to evaluate the total scope of the contract recruiter’s job. In short, how much work will they be doing?
You might just need a recruiter to source candidates and narrow down resumes before passing the information to a hiring manager. In other cases, the contract recruiter’s role will be a bit more in-depth—even lasting through the employee onboarding process.
The positions you’re hiring for should also be clearly outlined. This includes job titles, job descriptions, salary, employee benefits, and other information related to the jobs in question. More than just the technical side, the contract recruiter will also need to know what type of personality and soft skills the position requires. Understanding your company culture will be critical to the recruiter finding the right candidate.
It’s typically not the contract recruiter’s job to find this information on their own. They’ll simply be taking the information you give them and use it to find potential candidates.
If you don’t prepare this information ahead of time, your contract recruiter will fall behind when you bring them onboard.
You want to set them up for success to hit the ground running and fill these positions quickly. That can’t happen if they’re unclear about job descriptions or there’s any ambiguity about the types of candidates you’re looking for.
#2 – Select Your Recruiting Software
Next, you need to make sure you’re using recruiting software or an applicant tracking system (ATS) that’s recruiter-friendly.
There are lots of different tools on the market in this category. Some are designed for in-house recruiting, others are built specifically for staffing agencies, and the rest fall somewhere in between. It’s those in-between tools that you want to look for here.
You shouldn’t be relying on the contract recruiter bringing their own software to the table. Instead, you want to make sure the software you’re using works well for your hiring workflow.
Then you’ll still have access to the software long after the contract recruiter is gone. If you need to use another contract recruiter in the future, you can simply onboard them to the same tool. Using recruiting software allows you to define and streamline your hiring process before hiring a contract recruiter. You want them to work using your processes and ensure all your needs and requirements are met.
JazzHR is the perfect recruiting software for hiring contract recruiters because it comes with built-in collaborative hiring features.
All JazzHR plans support unlimited users. So you can add a contract recruiter to the system without paying any additional fee.
There are three different JazzHR packages to choose from:
- Hero — $39 per month
- Plus — $229 per month
- Pro — $339 per month
The Hero plan only supports three open job positions, so it’s not really a viable option if you’re using a contract recruiter. You’ll need the Plus plan at a minimum, which comes with an applicant tracking system and supports interviews and candidate assessments.
If you want to give your contract recruiters the ability to send offer letters and collect e-signatures from candidates, sign up for the Pro plan.
The collaborative hiring features from JazzHR let you set up custom recruiting workflows. This makes it easy for you to track the progression of candidates and essentially keep an eye on your contract recruiter.
You’ll also have the ability to provide notes and feedback on specific candidates. You can mention the contract recruiter by name, so they get notified of your comments, all directly within the JazzHR platform.
You can try JazzHR for free with a 21-day trial.
#3 – Narrow Down Your List of Potential Recruiters
Now that you have your hiring needs and technology sorted out, it’s time to start evaluating potential contact recruiters.
There are several things to look for as you’re narrowing down options:
- Budget — As previously mentioned, there’s a significant cost gap between the cheapest contract recruiters and the most expensive contract recruiters. You should have a budget in mind as you’re shopping around and comparing options, which will help narrow your search. Look beyond the hourly rate, and don’t forget to budget for any percentages the recruiter charges for filling a position.
- Market Knowledge — It helps to work with contract recruiters that understand your business and industry. Otherwise, they’ll just be sourcing candidates based on resume keywords, experience, and stuff that almost anyone could do. If you’re trying to recruit top-level talent, the best contract recruiters need to have in-depth knowledge of your industry.
- Experience Level — What’s the track record of the recruiter in question? Look for success stories with previous clients. Remember, contract recruiters get paid whether or not they filled a position. So you need to make sure that the recruiter is actually going to deliver the results you expect. The recruiter should also be able to provide references from past clients.
- Type of Contract Recruiter — Some contract recruiters work on their own as freelancers or sole proprietors. Others are part of larger staffing agencies. There are pros and cons to each, but it’s up to you to determine which option you’re most comfortable with.
All of these factors generally blend together as you’re evaluating recruiters. For example, the cost will likely adjust accordingly based on industry knowledge and experience level.
#4 – Conduct Interviews
Once you have a shortlist of potential contract recruiters, it’s time to take this evaluation one step further with an interview. This will allow you to get to know them better, which will ultimately determine if they’re a good fit for your hiring needs.
In some cases, a contract recruiter could be working with your business for up to a year.
At that point, they’re basically an extension of your core team. So the interview should also assess whether or not they’re a good fit within your company culture, similar to the way you’d hire a full-time employee.
They’ll be working alongside your HR team and sending candidates to hiring managers. You need to make sure that they’ll communicate well with everyone without disrupting your existing processes.
Before you start asking interview questions, prepare the following materials ahead of time so you can educate the prospective contract recruiter about their role:
- A brief description of your business and company values and culture
- Job titles and job descriptions that you’re searching for
- Locations of the open jobs
- Education level, job experience, and skills required for the open jobs
- Your hiring and interview process
- Other contingencies candidates will need to pass (background checks, drug tests, physical exams, etc.)
Once you have the preliminary details out of the way, try to gauge whether or not the candidate thinks they can handle the responsibilities. Give them an opportunity to ask some questions and clarify any details you’ve presented.
Now you can proceed to the next stage of the interview—asking questions. Some great interview questions to ask a contract recruiter include:
- How long have you been recruiting for this industry?
- How many job placements have you had as a contract recruiter in this industry?
- Who are some of our top competitors?
- What is the retention rate of your placements? (percentage of candidates still employed after 12 months)
- What steps do you take to ensure the candidate is a good fit for our business?
- How do you preserve the confidentiality of sensitive information?
- Have you ever encountered a conflict of interest as a contract recruiter? If so, how were those conflicts resolved?
If you’re using a tool like JazzHR, you’ll have some control over how sensitive data gets used. The software has built-in tools for compliance.
You can also restrict access to certain parts of the system and only give your contract recruiter access to information related to the jobs they’re recruiting for. This gives you an added layer of protection if you’re worried about the recruiter accessing sensitive data.
#5 – Draft the Contract and Onboard the Recruiter
After you’ve vetted potential contract recruiters during the interview process, it’s time to make things official by drafting the contract.
You can start with a Statement of Work (SOW) or contract that clearly defines the obligations of the recruiter.
Include how many candidates they need to find and a timeline of the work. Does the work end after a predetermined date? Or does the recruiter continue working until the positions have been filled?
Clarify the pay, including all retainers, upfront fees, hourly rates, and commission structure for filling open positions.
Unlike a headhunter, a contract recruiter will typically receive less of a commission. But the upfront and hourly rates will likely be non-refundable, regardless of the employee’s success or employment length.
The contract should also include an NDA (non-disclosure agreement) and NSA (non-solicitation agreement).
NDAs are legally binding contracts saying that the recruiter can’t share any confidential information or trade secrets about your organization. The NSA helps ensure that the contract recruiter can’t solicit your staff when recruiting for another company.
Once you bring a contract recruiter onto your team, you must manage this relationship with care.
On the one hand, you want to let them work autonomously to achieve the goals you’ve outlined with them. But on the other hand, you don’t want to just let them run free if they’re not generating results. Touch base with them for status reports and give them a chance to succeed.
Introduce them to your HR department and make them feel like they’re part of the team.
As you’re hiring employees at scale, it’s important to ensure everything goes smoothly beyond the recruiting process. Check out our guide of the best onboarding software for help with this.
You’ll also want to have a plan in place to evaluate new hires, setting them up for long-term success. Using performance management software is the best way to handle this initiative.