Why Paraform's Contingency Model Fails Fast-Growing Startups
Dover
July 7, 2025
•
5 mins
Paraform's contingency recruiting marketplace allows multiple recruiters to compete for the same role, but only the successful recruiter gets paid. When you post a job, Paraform connects you with 10+ independent recruiters who all work on filling your position at the same time.
You don't pay anything upfront, and theoretically, competition should drive better results. Multiple recruiters mean more candidate sourcing, faster turnaround times, and you only pay for success.
This model works when you're hiring one or two people every few months and cultural fit is not a focus. The problems show up when you need to scale quickly and hire 5, 10, or 20 people in a quarter. At that point, you cannot give up the quality of hires.
Dover takes a different approach with fractional recruiting. You partner with dedicated recruiters on an hourly basis who become extensions of your team. Rather than juggling multiple competing freelancers, you gain access to seasoned recruiting professionals who understand your company culture, integrate easily with your operations, and develop sustainable hiring systems that scale with your startup.
Majority of recruiters do unpaid work in contingency and they're forced to charge higher success fees to make up for lost time on roles they don't win. This creates a hidden subsidy system where companies that do hire end up paying for all the companies that don't. Typical contingency fees range from 15-30% of a hire's first-year salary. That $150K engineering hire could cost you $30K or more in recruiting fees.
On the other hand, Dover's predictable hourly model typically results in a cost per hire of $2K-$8K, depending on the role and hiring timeline. You're paying for actual work performed, not paying for a broken economic model.
Let's break down the math:
Role Type | Average Salary | Contingency Fee (assumed 20%) | Dover Fractional Cost |
|---|---|---|---|
Software Engineer | $150,000 | $30,000 | $4,000-$6,000 |
Product Manager | $140,000 | $28,000 | $3,500-$5,500 |
Sales Rep | $120,000 | $24,000 | $3,000-$4,500 |
The cost difference becomes even more dramatic when you're hiring multiple people using contingency model. Reducing your recruiting budget while improving quality of hires become key during growth phases. Fractional recruiting solves this by fitting into your budget and following your speed of hiring.
Managing one recruiter is doable for a startup founder. Managing 10+ competing recruiters? That's a nightmare.
Many recruiters on Paraform are taking on multiple projects at the same time, turning the recruiter-client relationship transactional rather than a true partnership.
During boom hiring cycles, this creates several problems:
Inconsistent candidate experiences: Different recruiters share conflicting information about your company, role requirements, and hiring process, causing candidate confusion.
Duplicated outreach: Multiple recruiters often contact the same candidates, making your company look disorganized and desperate.
No process standardization: Each recruiter uses their own screening criteria, interview questions, and evaluation methods. You can't build consistent processes when every recruiter operates differently.
Dover's fractional model offers a dedicated partnership with consistent processes that scale with your growth. The fractional recruiter becomes an extension of your team.
The Institutional Knowledge Gap
Contingency recruiters have zero reason to really get to know your company since they're competing with other recruiters and might not even get paid out in the end. Why bother learning about your culture or building relationships with your team when nine other recruiters are doing the exact same work?
You become stuck in endless onboarding cycles, constantly explaining your company, what the role needs, and your ideal candidate to new recruiters over and over. Without that deep company knowledge, the candidate quality suffers.
Dover's fractional recruiters make it a priority to understand your company values, represent them well in front of candidates, and build long-term talent pipelines. The best fractional recruiters become experts in your industry and your hiring challenges. We develop those collaborative hiring processes that fit easily into your team's workflow.
Quality vs Quantity Recruiting Challenges
The fundamental problem with contingency recruiting is misaligned incentives. Your aim and the recruiter's aim are not the same. You want to hire great people. They want you to settle with the first hire they find. This subtle difference can cost you a lot of time dealing with low quality candidates.
This quantity-over-quality approach creates several problems:
Resume spam: Dozens of barely-qualified candidates who meet basic keyword requirements, but lack the skills or experience you need.
Poor screening: Contingency recruiters often skip thorough phone screens or technical assessments because they're rushing to submit candidates before competitors.
Weak candidate preparation: Candidates arrive at interviews unprepared because recruiters didn't invest time in proper briefing or coaching.
Bad hires are expensive, disruptive, and can set back your growth path by months.
Our hourly model and fractional recruiters at Dover help you conduct proper screenings, prepare candidates effectively, and focus on measuring quality of hire rather than just quantity of submissions.
Candidate Experience Suffers During Rapid Scaling
Employer brand is important during growth phases when you're competing for top talent. Multiple competing recruiters create a candidate experience nightmare that can damage your reputation in the market.
Common problems include:
Unprofessional outreach: Recruiters sending messages with grammatical errors, or generic templates fail to reflect your company's standards.
Incorrect information: Different recruiters sharing conflicting details about salary, benefits, remote work policies, or role responsibilities.
Misleading candidates: Overselling opportunities or misrepresenting company culture to increase submission rates.
When candidates have bad experiences with recruiters representing your company, they associate that poor experience with your brand. Fractional recruiting can help your startup maintain consistent, professional candidate experiences.
At Dover, we make sure dedicated fractional recruiters become brand ambassadors who represent your company professionally and accurately.
How Dover's Fractional Model Solves These Problems
When Fractional Recruiting Makes the Most Sense
Frequently Asked Questions
Conclusion
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