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How To Avoid High Recruitment Agency Fees

How to Avoid High Recruitment Agency Fees

As with the flat fee estate agency model, fixed cost recruitment isn’t far behind.  In fact, recruitment could even be further advanced – have you tried it yet?

You probably know that recruitment agency fees can be as much as 30%; for the example explained here let’s work to 20% of basic salary & disregard other charges that recruitment companies invoice which can include car allowance, bonuses and retainers.

If you recruited a candidate on a £50k salary with the support of a recruitment company you would be charged £10k. This is palatable if the candidate goes on to be a successful member of your company but what if it doesn’t go according to plan?

When agreeing to terms with your recruitment partner, there is normally a rebate period, but what if the candidate leaves after 3 months? You may have paid nearly £10k to the recruitment company, given up your time to recruit this person & provided support with the employee induction. On top of this, the employee would have been paid their salary and when you consider the total investment made, it’s hard to fathom that you may need to do it all over again.

Let’s look at the recruitment flat fee solution in more detail.

Like all companies, you start by advertising your position across all the job boards; with fixed cost recruitment companies this typically costs less than £200 which is great value when you consider doing this with the job boards directly would comfortably cost over £1000.

With a flat fee recruiter, you are in control. Upon placing the advert, you decide whether you do the next stage & what you do next will largely depend on the success of the previous process.

The likely outcome is that you will have had lots of applicants to choose from and if this is the case, you may want the recruiter to filter through and identify the best candidates to approach.

If you want to source candidates who are passive in the market, or attract people who didn’t apply for the job, you can instruct the recruiter to do a social search across platforms like LinkedIn, or request them to research the job board databases. These databases often come at a large cost so by working with fixed fee recruiters you gain further discount.

For most requirements, typically you want about 40 applicants and to target 5 people to interview.

At different stages of the recruitment process, the choice is yours. As mentioned, you can just place an advert on all the job boards, you can search for candidates across social media and the job boards. The recruiter can filter CVs for you, engage with the candidates and qualify their suitability, set up interviews and even close offers or, should you prefer, you can do the parts of the recruitment process that you prefer to do.

Are there any other benefits?

Lots but the main ones are free access to software (ATS) which helps you drive your recruitment process by managing the applicants. You would have also built a talent pool of candidates because of your endeavours and this is your talent pool, meaning you can recruit as many candidates from the campaign as you wish, for no extra cost.

If you were to use all the services offered by a fixed cost recruitment company, typically the cost would be £1000, but you can recruit for any position, in any location, across any industry for as little as £200.

Is everyone doing this?

Larger companies don’t need to as they have direct recruiters working for them who focus on CTR (Cost to Recruit) and TTR (Time to Recruit) and they use software and discounted job adverts to help them hit their targets.

In fact, the fixed cost recruitment model is geared towards SME’s who want to benefit from the discount and software that the corporates benefit from.

So no, not everyone is doing this, but it is becoming common practice for all type of positions, both junior and senior.

Should you still work with your traditional recruiter?

If your recruitment agency has a network and access to people who you don’t think are accessible elsewhere, then most definitely you should continue to work with them.

If you feel the candidates that you are trying to attract are online, either because they are looking for work or they are on social media, then the most cost-effective way to source candidates is by placing an advert across all the job boards.

It’s quick, easy and there is a strong chance you will be able to recruit a highly sought-after candidate because that person is searching online and, as you know if you are buying a car, shopping, booking a holiday or getting insurance quotes, you typically do this online; finding a job is no different.

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