The traditional model of maintaining an in-house recruiting team is becoming obsolete for most growing companies. Both fractional and contingency recruiting offer compelling alternatives, each with unique advantages for different hiring scenarios. Let's explore how each model works and when to choose one over the other.
The Cost Burden of In-House Recruiting
Before diving into the alternatives, let's understand what in-house recruiting really costs:
Full-time recruiter salary: $80,000-$150,000
Benefits and overhead: 30-40% of salary
Technology stack: $25,000-$40,000 annually
Job board subscriptions: $5,000-$15,000 annually
Training and development: $3,000-$5,000 annually
Fixed costs regardless of hiring volume
Management overhead and time
Fractional Recruiting: The Strategic Partner Model
What Is Fractional Recruiting?
A dedicated recruiting resource working 1-3 days per week as an extension of your team, handling end-to-end recruitment activities.
Key Benefits
Predictable monthly costs
Includes recruiting tools/technology
Deep integration with company culture
Consistent hiring process development
Ongoing pipeline building
Employer brand development
Regular market intelligence
Flexible hour allocation
Ideal For:
Companies hiring multiple roles annually
Organizations needing consistent recruiting support
Businesses focusing on culture and process building
Those wanting predictable recruiting costs
Companies with diverse but regular hiring needs
Cost Structure:
Monthly retainer based on hours needed
No placement fees
Typically 30-50% cost of full-time recruiter
Scalable up or down monthly
When to Choose Fractional:
Planning consistent growth
Need for process development
Want a strategic hiring partner
Desire for cultural alignment
Need predictable recruiting costs
Focus on long-term talent strategy
Contingency Recruiting: The Specialist Approach
What Is Contingency Recruiting?
Specialized recruiters who work on specific roles with payment only upon successful placement.
Key Benefits
No upfront costs
Includes recruiting tools/technology
Multiple recruiters working simultaneously
Specialized industry expertise
Extensive candidate networks
Quick deployment
Pay-for-performance model
Access to passive candidates
Ideal For:
Hard-to-fill positions
Multiple roles need to be filled
Technical specialists
Urgent hiring needs
Irregular hiring patterns
Competitive talent markets
Cost Structure:
Success-based fees (typically 20-30% of annual salary)
No ongoing commitment
Pay only for results
No technology or tool costs
When to Choose Contingency:
Specialized role requirements
Immediate hiring needs
Irregular hiring patterns
Need for industry specialists
Want multiple recruiters working simultaneously
Prefer success-based payment
Making the Right Choice
Choose Fractional When:
Hiring Volume is Consistent
Regular monthly hiring needs
Multiple positions across departments
Need for process development
Strategic Focus is Important
Building employer brand
Developing hiring processes
Creating candidate pipelines
Long-term talent strategy
Budget Planning is Priority
Need predictable monthly costs
Want to avoid placement fees
Looking for cost efficiency
Choose Contingency When:
Hiring is Specialized/Sporadic
Executive positions
Technical roles
Hard-to-fill positions
Irregular hiring needs
Speed is Critical
Urgent positions
Competitive markets
Need immediate results
Risk Mitigation is Key
Want pay-for-performance
Need multiple recruiters
Require specialized expertise
ROI Comparison
In-House Recruiting (Annual)
2 Full-time Recruiters: $200,000 (2 x $100,000)
Benefits/Overhead: $80,000
Tools/Technology: $40,000
Total: $320,000 (Fixed)
Fractional Model (Annual)
12 hours/week: $7,500/month
Benefits/Overhead: $0
Tools/Technology: $0
Total: $90,000
Savings: $230,000
Plus: Flexibility to scale up/down
Contingency Model (Annual)
Average fee: $20,000 per hire
10 hires: $200,000 (*Only pay for success)
Benefits/Overhead: $0
Tools/Technology: $0
Savings: $120,000
Plus: Multiple recruiters working each role
The Bottom Line
Both fractional and contingency models offer clear advantages over in-house recruiting, but they serve different needs:
Choose Fractional If:
You need consistent recruiting support
Want predictable monthly costs
Value process and strategy
Have regular hiring volume
Need deep cultural integration
Choose Contingency If:
Have specialized hiring needs
Want pay-for-performance
Need immediate results
Have irregular hiring patterns
Require industry specialists
Either way, moving away from the traditional in-house model offers greater flexibility, reduced risk, and often better results. The key is matching your hiring needs and organizational style with the right external recruiting model.