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How to Avoid High Recruitment Agency Fees

How To Avoid High Recruitment Agency Fees

We all know that recruitment agencies like to take a sizeable commission when finding you a successful candidate for your role. While some companies view this as an essential or unavoidable expense considering the benefits of time and convenience, there might just be another way to hire the perfect candidate with all the benefits but at a much lower cost. However before we look into alternatives, it’s important to understand the business models recruitment agencies use.

How do recruitment agencies charge their clients?

Did you know?  Recruitment agency fees can be as high as 30%

For example: If you recruited a candidate on a £50k salary with the support of a recruitment company you could be charged £10k (20%). 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?

Keep in mind this excludes any other fees such as car allowance, bonuses and retainers.

Other problems when using recruitment agencies

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.

Recruitment agency business models

Some agencies will operate on different business models, for example some agencies will take a smaller percentage of the salary over several months, while others will charge based on hours worked, & performance. You can also have a recruitment agency on a monthly retainer. This leads us nicely on to the alternative recruitment business model, flat fee recruitment.

Avoid high recruitment costs with flat fee recruitment: 

The flat fee recruitment business model is a low cost alternative to using an agency. With a flat fee recruiter, you are in control. You write the job description (we have a large library of job description templates for you to choose from) and upon placing the advert, you decide the level of exposure you want your job advert to receive with our fixed cost job advertising services.

The benefits of flat fee recruitment

Its cheaper than agency fees 

For example: You can pay a fixed amount to promote your job advert across various job boards and social media sites (both well known and niche). 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. This is significantly greater value when you consider doing this with the job boards directly would comfortably cost over £1000 or the cost of doing this with an agency.

Find passive candidates

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.

Freedom & Flexibility

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.

Filter the best candidates

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. For most requirements, typically you want about 40 applicants and to target 5 people to interview. That’s where our free recruitment software comes in handy!

Free Recruitment Software (ATS)

This 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.

So why isn’t 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 with a flat fee recruitment company.

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.

How to get started

If you are new to the process, take a look at our job description templates to ensure you only attract the best candidates, take a look at our job advertising packages, and get in touch with a member of our sales team and together we will find a promotional package that’s perfect for you.

Happy hunting!

Next, read A Guide On How To Hire Employees or Alternative Ways To Advertise A Job.

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