How much does it cost to use an employment agency and why do they charge what they do?
Finding new employees is an essential and costly process for any organisation and many businesses do not have the tools, or the time to screen, shortlist, and interview extensive lists of would-be next hires or the candidate contacts that have been built up over years of searching. This article sheds light on the work that recruiters do to warrant their fees and dispel the myth that recruiters make money from old rope.
The cost to use a professional recruiter will range between 15% to 20% of a candidate’s starting salary. This might sound expensive, but they essentially work for you for nothing regardless of whether the vacancy is filled or not. So, it’s in the recruiters interest to make sure they get it right, because if they don’t they do not get paid. Similarly, in the instances where an introduction converts to a placement, the recruiter will normally refund you all or part of your fee if something goes wrong.
How much do good recruiters get paid?
Employing a dedicated recruiter with the expertise and experience necessary for effective talent attraction can cost between £35,000 and £60,000 per year, a substantial financial investment for any business. By outsourcing the work to a professional recruiter, you are effectively offsetting those costs for an ad-hoc fee structure which you can switch on and off as and when you like, mitigating the cost of employing an internal recruiter yourself.
How much time do recruiters spend searching for candidates?
This is dependent on the complexity of the role which is why fees can vary as well. With a few exceptions, a run-of-the-mill role will take less time to fill than a specialist one, but if a recruiter is on a commission-based package they will want to make sure they source the best people for the job, so in short…hours and hours of time is spent scouring in-house candidate databases, premium job boards and social media. Recruitment is a time-consuming process, especially in a candidate-sparse market with skill shortages and high employment levels. From time to time they might get lucky and land a candidate on the first cast, but like fishing, you don’t always catch something every time.
From an in-house perspective, these costs combined with the time required to search and select potential new employees can substantially impact a business's productivity, not to mention the sometimes lengthy timelines involved in getting a new employee onboard. Outsourcing this to a professional recruiter can significantly speed up this process, eliminate the need for individual sourcing, and take care of all the pre-engagement onboarding including contract negotiation and referencing.
Screening countless unsuitable advert responses
It’s easy to post a job advert but the time it takes to sift through dozens of applications to find a few golden nuggets can be considerable, and unlike searching you don’t have control over who is applying, and the majority of the applications may be unsuitable. Even when you do find that golden nugget people rarely answer the phone these days or respond to emails and texts from numbers they don’t recognise, taking more time to either try-try again or start over from scratch.
A professional recruiter will put the time in and streamline the process by doing all the pre-screening and the callbacks, introducing the most qualified and the most suitable applicants to the end hirer, saving time and speeding up the process.
First stage interviews
These are essential to establish a candidate's skill set and to get a feel on how their values align with your company culture. The rule of thumb is that a good recruiter will present a handful of short-listed candidates who have been screened, assessed, interviewed, and briefed on the vacancy including the business they are being introduced to, saving valuable time for the hiring manager allowing them to focus on a shortlisted talent pool.
Hours spent interviewing
Depending on the size of an organisation, its speed of growth and turnover of staff interviewing can greatly impact business productivity, taking hours out of the day for hiring managers and key stakeholders. Outsourcing this process allows internal staff to focus on their core responsibilities, increasing the overall efficiency and effectiveness of their role, saving valuable time and money.
Simplifying the interview process
Often decision-making can involve multiple stakeholders required to provide input during the selection and interview process. In larger organisations this coordination can be a challenge, resulting in delays due to extended timelines and more often than not key talent is lost to competitors. A disgruntled candidate may also tell their friends and family about their experience which can also damage a company’s employer brand.
A professional recruiter will streamline and speed up that process by managing the candidate journey with the coordination of interviews and post-interview feedback, leading to a faster and more decisive outcome mitigating the risk of losing key talent to a competitor or risking a bad review on sites like Google or Glassdoor.
Going back to the drawing board
When the interview process is not well-managed or the decision-making process takes too long candidates will be put off and go elsewhere, resulting in the need to restart the recruitment process again from scratch.
A professional recruiter will manage the process from start to finish keeping candidates engaged and hiring managers informed, minimising the risk of losing out on the best candidates in the talent pool.
The cost of a bad hire
Good recruitment is a challenge in any industry and there is little doubt that all businesses have made a bad hire somewhere along the line. A bad hire is bad for business. The hidden costs associated with onboarding, in-house training, productivity, and contractual implications can also affect team morale which will have a direct impact on productivity and output. It can take up to six months to fully integrate a new recruit into a business which will equate to thousands of pounds of money down the drain if things don’t work out.
When you factor this into your recruitment budget you will be surprised how the costs can stack up. But it doesn’t just stop there, the cost of a bad hire can be up to three times their salary. Improving the candidate journey will greatly improve the probability of attracting and securing the right people who stay in the business for the long term, So, it makes sense to get it right the first time around.
What you should expect from a professional recruiter
A good recruiter will want to meet with you virtually or in person to get a feel for your work culture and gain a real understanding of what it is you do. They will fly the flag of your organisation and will be fully committed to finding the right person fit to fill your vacancy, and they should always keep you informed along the way.
Understand what you are getting for your money
You should feel like you are getting value for money, so don’t be afraid to ask what it is they will be doing for you. Your investment will probably include advertising, which you should approve before it is posted on the net. Timescales are also important; a good recruiter will manage your expectations and agree ones that are workable. In most cases initial introductions will filter through quite quickly but a thorough recruitment campaign could be ongoing for a number of weeks.
A good recruiter will keep you informed, and they will tell you when things are not going to plan so you can make informed decisions based on real findings. They will also meet with potential candidates before they are introduced to you, after all, you are not just paying for a transactional CV forwarding service. You should expect that your next best hire will have been properly vetted.
Don’t agree to binding exclusivity. Recruitment is like a roller coaster and candidates can let you down, so it’s best not to be left with no one else to turn to if the river runs dry. At the same time don’t saturate and put your job out to as many recruiters as you can find on a Google search. As soon as they get wind of this, they will put their efforts elsewhere.
Lastly…when a recruiter truly understands your business and you the hirer value the recruiter's time, they will work tirelessly for you, a bit like having your own in-house team but without the contractual ties. A good recruiter can add real value to your business and help it grow, and a good recruiter will challenge you and advise you, so you can shape your business with the ebb and flow of the employment market. But it is also a two-way street…the work done by the recruiter will all go to waste if the hiring manager does not act quickly, review introductions, and communicate with constructive feedback as good candidates are not around for long. When the two-way street becomes a one-way street it’s likely that the recruiter will not want to work with that hiring manager in the future, so invest time into your recruiter and they will invest their time in you for years to come.
Getting the experts in
Since our inception in 2004 and over the years we have attracted and retained some of the best regional recruiters in our region. In fact, between us all we have over 150 years of combined experience with an average length of service of 9 years.
With web optimisation, SEO, PPC, job boards, digital CV databases, aggregation software, and social media, the world of recruitment is a very different world to the one that existed ten years ago; technology firmly dominates the horizon. One to One has invested heavily in state-of-the-art software and search technology that keeps us ahead of the curve and confident that we have the very best search tools at hand that ensure we leave no stone unturned.
Although new technology is essential, behind it all there is still a person and over the years we have become experts at developing professional relationships, headhunting, networking and finding the best talent on the market.
The combination of old and new is what has made us into one of the most trusted and valued recruitment partners in our region.
Our service is built around your business needs and our customers are at the core of absolutely everything that we do.
Old-school methodology with a modern twist!
