Why Hire a Recruitment Agency?
Benefits, Fees, and Everything You Should Know About These Businesses:
If you need to place employees in seats, you might want to consider employing a recruitment agency or service. There are numerous services available, but should you use them and how can you get the most bang for your buck?
The cost of recruiting an employee can approach €40,000. Certainly, some of that cost is in training and missed production. However, the recruitment process itself accounts for a significant chunk of the cost: the amount of time HR personnel and management spend discussing the job; advertising; hours spent screening; interviewing; re-interviewing; background checks; and so on. HR departments regularly take these measures only to have to repeat the procedure. If you have a dedicated recruiter on staff, you already know how much it costs each year. Have you deducted their salary, benefits, and perks from the total number of hires each year? In terms of hiring costs, that’s simply the tip of the iceberg.
So, why utilise a staffing firm? Recruiting in-house is rarely a prudent use of resources, especially for small businesses where employees’ time is already stretched tight. If you don’t have a dedicated recruiter, you’re taking away valuable work time from other employees, which has an impact on your bottom line. When you want to get the most bang for your buck, a recruiting agency to find the perfect people (not simply a pool of applicants) may be the way to go.
Understanding the hiring requirements of businesses
You should have a good grasp of your employment needs before employing a recruitment agency so you can make the best use of the agency’s services.
Having a professional recruiter on staff is unnecessary if you only employ once or twice a year. An agency can bring in the right applicant, screened and guaranteed. Setting up meetings to evaluate if they’re a good fit and making the hire will be your only responsibilities.
Perhaps you hire on a regular basis, perhaps once a month. You may have someone who handles the majority of your recruiting and is trained to screen and interview prospects in a professional manner, but they may require assistance in bringing candidates (rather than applications) into the door. According to SK Recruitment Agency, you may expect to receive 75 resumes for every job position. That’s a significant amount of screening. Even if you only spend five minutes on each resume or cover letter (which is generous), you’ll be reviewing them for almost six hours in the hopes of finding an excellent applicant.
According to the same survey, at least half of the resumes received by recruiters were from unqualified individuals, wasting three hours. When it comes to screening, a recruitment firm can help lessen the work so you can focus on the most eligible prospects.
Let’s imagine you hire frequently: you’re usually posting, interviewing, verifying, or filling a position at any given time. You’ve got a lot of balls in the air at once, and juggling them all can be difficult. Having a full department to assist would be ideal, but neither the cards nor the budget allow it. A recruiting firm can act as your human resources department. They can relieve you of the majority of the job, allowing you to employ for quality rather than quantity.
You hire in bulk. You’re downsizing, have a lot of turnover (which you should investigate if you have the time), or are hiring for several or seasonal positions. You require assistance!
Every spring, one of my old employers employed 400 seasonal workers to prepare for the summer rush. It was difficult to get enough people into the kitchen with a staff of six. Some agencies are prepared to handle this volume: they collaborate with neighbourhood organisations, foreign workers (who can help you verify work visas), and other outreach programmes to meet high staffing demands.
Not interview slots, but jobs.
Agencies are compensated for filling positions, not for scheduling interviews. You’ll probably get fewer applicants, but they’ll all be qualified. I got to know my clients well as a recruiter and subsequently as a branch manager for a recruitment firm. They would not only tell me what skills I needed, but they would also tell me who would fit in well and who would not.
You can tell a recruiter about soft skills even if you don’t wish to discriminate. A section that is quiet may not be seeking for someone who is easily excited. Or perhaps you’ve had a lot of turnover since everyone wants to move up in a year, and you’re searching for someone who will be happy with this job for the long haul.
I worked for a company that had exactly same problem: they continued hiring for the same position every six months or so. While I enjoyed the commissions, I was disappointed that they had to rehire so frequently. I made a proposal to the hiring manager during our conversation. Stop recruiting young graduates and start looking for someone with more experience (upping the salary a bit). You want someone who understands exactly what they want to do all day and isn’t searching for a stepping stone or a way to improve their résumé. As a result, I was hired on a long-term basis, which cost me commissions but gave me a link with the organisation. That is exactly what a reputable recruitment business will do. They intend to be in it for the long run. They want to build a relationship with you and will go to any length to do so, even if it means a short-term loss.
Snare and Trial (or Pare)
You have no choice but to hire a temp to fill a vital team member’s position when they depart on family or medical leave. Consider utilising this as an opportunity to screen someone for a future position at your organisation. You might even want to cross-train them during their temp stay to see if they’d be a good fit if they’re a good worker, work well with the team, and are eager.
Have a job that requires more training than the 30- or 60-day trial period? You might be a good fit for temp to perm work. It can take months to determine whether a candidate is a good fit for some positions. You’ll have a longer trial period if you do temp to perm. You don’t even have to fire them if they don’t work out! Simply contact the agency and have them handle the unpleasant aspects. They will also send you a replacement.
What happens if you decide they’re ideal? Some businesses choose to buy out the contract, paying a fee to have the employee removed from the “temp” payroll and placed on their own. Depending on the length of the buyout period, you may want to keep them on as temps as long as feasible. You not only spread out the cost of the buyout by maintaining them as an agency employee, but you also extend the probationary term. You can also begin your own regular probationary term after they leave the agency payroll and join yours. What a clever technique to protect yourself!
Taking Advantage of the Guarantee
All agencies provide guarantee periods in addition to recruitment assistance. You do not pay if the hire does not work out, and they, not you, begin the hunt again. With certain agencies, you can negotiate fees, guarantee durations with others, or do both. It hurts to inquire. Especially if you hire in bulk or if you’re a new customer, try to negotiate one or both of these things. Whatever the guarantee period is, it must be used solely as a probationary period. Allow the agency to restart the procedure if things don’t work out.
How much of your turnover may be ascribed to hasty hires, lack of screening, or settling merely to fill that role, if you look back? When you hire a recruiter, you stop making your own errors and start making them work for you.
Your guarantee period gives you the chance to reassure the new hire that they are the perfect fit. Establish reasonable expectations for what the new hire should have learned, accomplished, or mastered throughout the warranty time. It’s time to trade if they don’t meet those targets. It can take a few tries to find the appropriate fit, but you’ve put in very little effort and, as a bonus, the agency learns more about your business. Once they gain a sense of your priorities and culture, they’ll be better positioned to fill your next position.
What It Costs to Do Business
There are many different sorts of agencies, each with its own price and warranty structure. Here are the three most common types:
You’ll usually pay up front and offer them exclusive rights to fill the position. These are uncommon and are usually reserved for high-level or difficult-to-fill positions.
Cost: On average, 10% of the annual pay is spent on recruiting, with another 10-15% or more spent after employment.
Guarantee period: six to twelve months
After the new hire has completed the guarantee term, these agencies send in prospects and take a share of the annual wage.
Cost: 15–25% of annual salary, on average.
Guarantee: 60 days in most cases.
Temporary to Permanent or Permanent to Temporary
These companies send in temporary workers who can come and go or transfer to your payroll if they’re a good fit. Their contract can be purchased out for a charge, or you can have them for free after a period of time. The cost of the buyout is usually calculated on a sliding scale: the sooner you transfer them off the agency payroll and onto yours, the higher the cost.
Costs: 20% to 50% of the hourly pay
After 90 to 120 days, the buyout is usually completed.
If you’re still not sure that using a recruitment agency is a good idea, consider the following additional benefits. They may be difficult to quantify right away, but they are very real. You probably don’t have thousands of talented individuals lined up to work for you unless you’re Google or Apple. A recruiter, on the other hand, will “sell” your organisation to a candidate as well as the candidate to you.
Let’s imagine you’ve finally made the decision to hire a developer, but your HR team has no experience with coding. Recruiters who specialise in a certain market can assist you in developing fair compensation packages, advising you on what to expect from the market, and, most significantly, introducing you to prospects in their applicant pool who are the perfect fit.
Using a recruitment firm can also save you money in the long run. Agency fees are deductible as business costs, which can help you save money. The average cost of filling an open position, according to SK Recruitment Agency, is about €4,000. However, agency fees are a valid business expense that can help offset some of the cost.
Only 12% of the workforce is actively hunting for work, according to SK Recruitment Agency, while 85 percent are interested in learning about new chances. Rather than waiting for a qualified applicant to walk through the door, agency recruiters will scour your competitors and the marketplace for people in comparable roles to see if anyone is seeking. Because they live and breathe recruitment, agency recruiters have the time to find and contact passive applicants in a way that your staff probably won’t be able to.
Recruitment companies may condense a month-long search into a matter of days. Knowing when and how to utilise them effectively can help you ensure a long-term hire while also reducing the stress of recruiting.