In cooperation with external service providers, the trend is moving more and more toward success-based models, especially in the area of staffing. In some cases, fees are only paid when the employee sought is hired or even after the employee’s probationary period has ended. A circumstance that vehemently limits the ability of small, authentic consultancies to act.

On the surface, this circumstance is an understandable reaction to an oversaturated market, in which there are quite a few dubious consultants who look fabulous and can sell extremely well, but have little idea of the relevant matter, the sustainable search and staffing of specialists and executives. In addition, there are nonexistent barriers to entry in a market that should be primarily peppered with discreet players with integrity who know their business.

But why does a model tied to the eventual success or failure of the service provider pose a problem at all? This is a legitimate question that is not only asked by laypersons, but increasingly also by decision-makers with corresponding personnel requirements.

If the goal is to minimize a financial risk in the short term, certainly no one with budgetary responsibility will be happy to pay an initial fee rate without receiving anything directly in return. Actually. Because the work of a personnel consultancy is more complex. No material product is produced, nor can there be any guarantees of success.

The work of an authentic personnel consultancy means not inconsiderable costs, especially at the beginning, in the search for specialists and executives, where the adjusting screws are individually adapted to the requirements and needs of the hiring company. Until the first suitable and change-motivated candidate is found at all, 50-60 working hours can pass here fast. Processes such as the time-consuming identification of target persons, their direct approach, the conducting of initial interviews or the compilation of reports are mandatory. An effort that is necessary to create a promising foundation.
The small boutiques and flexible consultancies cannot always afford to pre-finance this enormous expense, especially since there is still the risk that the hiring company will fill the vacancy elsewhere, change the internal structure after the order has been placed, or decide not to fill it at all. In practice, unfortunately, this happens more often than you think, because it costs nothing.

However, there are external service providers and consultancies that specialize in this game. Success-based models can work, with caveats. So there are consultations with candidate pools from forgotten days. It is easy to send their profiles proactively across the republic, and so it can happen that one and the same candidate is presented to dozens of searching companies.

Whether you order a burger from your trusted fast food vendor prepared long before you were hungry, or carpaccio prepared just for you at your favorite Italian restaurant, there’s an important difference. Although you will be full in the short term in both cases, fast food should not be your first choice in the medium to long term.

At the end of the day, as regulation of the market remains unlikely, companies with some staffing needs must face the challenge of distinguishing the good from the bad service providers.

You can separate the wheat from the chaff with the following tips:

-Does the external service provider have the relevant know-how in operational staffing?
-Let us show you best practices and references.
-Is there a team for the processing ?
-Is an industry specialization of the external service provider useful?
-Look for a transparent basic framework of process steps.
-Require regular status reports.
-Is there an authentic assessment by the external service provider of the time horizon? (The industry average for an occupation is about 3 months).