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Contract Recruiting: A Financially Stable Alternative to Traditional Recruiting

Becoming a niche recruiter who focuses on one particular kind of talent is a smart business strategy for independent recruiters. As a niche recruiter, you face less competition from other recruiters, simply because there are fewer active recruiters in your small slice of the field. You're essentially outside the fray. You can also earn higher fees for your specialized services. Finding niche talent is tough, so employers are willing to pay for results.

One niche that can be incredibly lucrative is contract recruiting. Whereas most recruiters help employers fill permanent roles, contract recruiters specialize in filling contingent and contract positions. Today, in the age of the gig economy, these recruiters are in particularly high demand. As much as 40 percent of all US workers may already be involved in the contingent workforce. As more and more organizations look for ways to utilize contractors, that number will likely grow.

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The Top 4 Benefits of Contract Recruiting

While contract recruiting is not everyone's cup of tea, it does offer those who succeed a number of perks and benefits, from financial to intellectual and even emotional:

1. It Is More Dynamic

When employers need contingent workers, they don't have time to wait. They need those workers now. While some may see this as stressful, others find it exciting. Those who thrive in high-energy environments where every second counts will find contract recruiting a fulfilling profession.

Similarly, those who value person-to-person relationships will enjoy contract recruiting's relationship-focused business model. Contract recruiters must cultivate strong relationships with contractors and clients alike in order to secure repeat business. If connecting with candidates and employers is your favorite part of recruiting, you may want to give contract recruiting a shot.

2. It Offers a Steadier Stream of Income

Perhaps the biggest draw of contract recruiting is its revenue model, which is much more stable than traditional recruiting.

While there is potential to make big money as a traditional recruiter, that money isn't constant. Most recruiters are paid a percentage of a new hire's salary when they make a placement, which means their income can fluctuate wildly over time. One big placement could net tens of thousands of dollars, but the next placement may only bring in a couple thousand. Recruiters may also go through lean periods where their clients aren't making any hires, giving them fewer opportunities to earn income. Or, a recruiter may fail to fill a string of roles in a row, spending weeks or even months without a single paycheck.

Contract recruiters are also paid a percentage of their placement's compensation, but the arrangement is different. Contractors are typically paid hourly rather than salary, and so is the recruiter. Rather than a lump sum up front, a contract recruiter receives a steady stream of income for as long as the contractor is working with the client.

To illustrate this point, the staffing industry publication EMinfo offers the story of a contract recruiter named Don:

"He placed a software engineer at his client for a 10-month assignment. During those 10 months, Don earned $20,275.16. That equals a steady income of $2,027.52 per month. … Many recruiters experience the same type of consistent cash flow that Don did when he made his first contract placement. Add a couple more contract placements into the mix, and the checks will continue to arrive on a steady basis. Want to take a day off work and not even look at your telephone? Go right ahead. Play golf. Go to the movies. Take a trip. The contractors you placed will continue to make money for you."

3. It Gives Recruiters Unparalleled Industry Knowledge

Contract recruiting is flexible and dynamic, and many recruiters in this space work with companies across industries. Contract recruiters are also on the front lines of industry evolution, as clients typically call on them when new developments in the market require a fast response. All of this means contract recruiters have unparalleled insight into hiring and business trends throughout the global economic landscape.

Contract recruiters also have experience with many different recruitment processes, strategies, and tactics. This gives them a breadth and depth of recruiting knowledge that a person cannot learn by working in only one industry or with only a few major clients.

4. It Weathers Economic Downturns

Recruiting is particularly susceptible to the ups and downs of the economic environment. When times are good, companies won't hesitate to spend money to find the best talent. When times are tough, belts tighten. Talent is often cut loose rather than hired, and when organizations do need to recruit, they'd rather handle it in house than pay a third party to do it.

Contract recruiting is different. In fact, economic downturns can actually be good for a contract recruiter's business. When companies need talent in a tough economy, they often turn to contractors as an affordable, flexible source of labor. In a bleak economic climate, organizations will gladly pay a contract recruiter if it means they can fill seats fast and at a fraction of the cost of hiring full-timers.

Interested in learning more about contract recruiting? Keep an eye out for the Recruiter.com Certification Program's upcoming course on how to become — and thrive as — a contract recruiter!

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