The use of recruitment agencies is very common for businesses of all sizes: small companies may feel they just don’t have the expertise or the time in-house and larger businesses may assume that outsourcing recruitment is the best way to fill multiple roles. The biggest issue with the use of agencies is that it is expensive with most charging anywhere from 10%-25% of the first year’s salary. On this basis, for every 4 or 5 roles you appoint using an agency, you could have paid another person for a year with the fees you have spent. So, is using recruitment agencies a bad idea?
The answer to that is not a simple one because it depends on a number of factors. We believe that recruitment agencies definitely have a place but the key to cost effective recruitment is knowing when to use them and when not to.
Full disclosure: we are not a recruitment agency but we do help companies to recruit more effectively.
We know that many companies use agencies for their recruitment because they don’t feel they have the skills in-house or perceive that agencies have access to better quality candidates. We believe that by creating and implementing a properly thought-out recruitment strategy, with some professional support, that most businesses would benefit from taking back control of their own recruitment. This is both in terms of cost saving and of finding the right people at the right time.
Creating a recruitment strategy does involve some work and some investment up front but the difference between automatically bringing in an agency for vacancies and taking a holistic approach to recruitment is that you have a long term plan rather than knee-jerk responses when people leave or workload increases. You don’t need in-house specialists either: the creation of the strategy can be outsourced, in close collaboration with your business, then your staff can be trained and mentored to incorporate recruitment best practice into their existing roles. Ongoing support can be retained at whatever level required.
So, recruitment agencies ARE unnecessary then?
Not at all: agencies have a really important place in the landscape of recruitment. For example, if you need to recruit a sales role, an agency may be able to fill that kind of role quickly and therefore the cost of the agency fee would be offset by the income you could stand to lose in sales if the post remains vacant for too long. Likewise, for a very specialist role, an agency that focuses on niche industries could be best placed to find appropriate candidates.
What is the right recruitment mix?
That’s different for each organisation but we would definitely put the onus on strategic in-house recruitment, supported by agencies where appropriate. Of course, being able to make the call on the balance is a skill in itself and something that should be incorporated into your strategy.