I’ve heard some (horror) stories about Recruiters offering discounts for Black Friday. Here at CST, we’re NOT going to be offering any fee discounts for Black Friday; there is flexibility though, we’re happy for you to pay us more if you like…
I thought instead, I’d use the opportunity to talk about recruitment fees and why recruitment costs what it costs.
I’ve heard it all over the years, that we’re a ‘necessary evil’ and ‘don’t do anything for the money’. Whilst undoubtedly there are bad Recruiters out there, the good ones are worth their weight in gold.
Businesses that work with Recruitment firms nearly always try to tell us we’re too expensive, but I believe we represent good value for money.
“A recruitment fee should be viewed as an investment”
First off, I think it’s important to understand what it is that you’re paying for. A recruitment fee should be viewed as an investment. So, what do you get in return for your recruitment fee:
- You’re investing in having a problem solved. What is the real cost of not having a Project Manager in place for that new project with that key new client?
- You’re investing in having a recruitment process managed. What would be the cost of advertising, managing responses and sifting through large numbers of unsuitable CVs?
- You’re investing in securing the services of a new employee, who in all honesty, will pay that recruitment fee back many times over. (And if the job doesn’t do that – it wouldn’t exist would it?).
So what does all of this really mean for you and your business….
How much of your time does recruitment really take up?
Let’s say you spend time briefing multiple Recruiters (I don’t advocate that but it’s often the reality).
Let’s assume 4 Recruiters at 30 mins each – that’s 2 hours
Each Recruiter sends you 8 CVs (too many for me but not uncommon) that’s 32 CVs, 5 minutes to read each one – that’s 3 hours
Arranging interviews and logistics for 6 people – 30 mins
Interviewing – 6 candidates – 3 hours each (allowing for prep and post interview ‘cooldown’) 18 hours
Offer negotiation/clarification – 2 hours
Post acceptance onboaring meetings – 4 hours
This is conservatively 30 hours, IF everything goes to plan.
What if I told you you could get some time back and improve your chances of getting things right first time? Keep in mind, if anything goes wrong you might have to start all over again and the clock resets….
What’s the real value of your new employee?
That new Senior QS makes you £150, 000 in year 1. The recruitment fee might be £12, 000. This is a huge return on your investment. And better still you only pay the fee in year 1. The employee keeps producing for you and creates several hundreds of thousands of pounds each year over the course of their employment.
And we haven’t even talked about the potential costs of a mis-hire. Estimated by Dr Bradford Smart these could be 5 to 25 times the value of the salary (think compensation, hiring costs, disruption costs, maintenance and opportunity cost – work you should’ve won or money you should’ve made).
It’s not you – it’s actually us…
I believe much of this disconnect comes down to a lack of understanding. And, in fairness, I don’t believe we as Recruiters take enough time to explain to clients what we do and how we solve business problems for them, so what does ‘real-world’ recruitment really look like:
Perception vs reality
‘You’ve all got the same candidates’ is a common comment from hiring managers. Even if this were true, there are many things a skilled Recruiter does which means that they will have access to people no one else will. But even if that were the case, the quality of ‘outreach’ (initial contact with the candidate) is a key defining factor in getting a candidate interested. Who wins out and gets the interest of someone who isn’t desperate to move but might for the right opportunity?
How this plays out in the real world
A bad recruiter calls or sends out a one-line message to the candidate saying they have a job opportunity with the hiring company. Or they’ll just cut & paste a ‘shopping list’ job spec which tells the candidate what the job duties are – a bizarre thing to do as they know what they do in their job every day! Most importantly, this doesn’t show someone what’s in it for them and what the job could do for their career.
A good recruiter carefully crafts a message to gain interest, and having worked with their client to understand how to sell the opportunity, puts attraction points about the job front and centre of a high-quality presentation.
“Who have you got on your books?”
Another comment clients often make is: ‘who have you got on your books at the moment?’ The thinking here is that Recruiters have a ‘ready-made’ list of people (all qualified and ready to go for the job) so all we need to do is speak to them quickly and send them over.
Now I can think of some sectors or kinds of recruitment where things might work a little like that – maybe trades and labour recruitment. But even to have someone ‘on the books’ and ready to go at an exec level at a point of need for a client might take years of work to build a relationship with that person.
The big problem is, as Recruiters, we’re terrible at showing the real work that goes on behind the scenes. Clients only see the tip of the iceberg in terms of a CV being sent over and interviews being arranged.
You’ll only see the tip of the iceberg of the work a good recruiter will do for you.
Here are just some of the things Recruiters do that you don’t see:
Turn a shopping lost job spec into something that can be sold and will attract top candidates. I’ve talked before about ‘shopping list job specs‘ and how they usually come into the world previously.
Hiring businesses almost never have selling points in job specs, so for many jobseekers there’s no point of difference from one firm to the next. According to recruitment advertising expert Mitch Sullivan if you can’t tell someone working for one of your competitors why they should work for you, you’re going to struggle, and he’s spot on.
Not selling the benefits of the vacant role means missing quality candidates that a good Recruiter will help attract. Whilst they might not be desperate for a job they could be open to the right opportunity correctly presented.
Unrealistic salary expectations
Greg Savage a leading Recruitment Trainer calls ‘pushback’ a superpower. But it’s important to think about who really benefits here. As Recruiters, if we challenge you about a salary range or the amount or kind of experience you require for a role, we’re not trying to be awkward. It’s because we want to achieve the best possible solution for you in the marketplace right now. You may have a view of what you want to pay in the market, but honestly, our view will be closer to the current reality. You might recruit three times a year, but we’re doing this all day every day.
Quality through qualification
I’ve been in recruitment for over 20 years. I’ve got a firmly held belief that the most important interactions we have are those first calls to a client or candidate. I try to take as much time as possible to qualify with a candidate what their aspirations are to match this as closely as possible with a client’s job. When I can match a candidate’s aspirations with the selling points of a job, we’re in a situation where everyone can benefit. This is not easy.
That said, I’m proud of the quality in our work.
At CST, we’re proud of the quality of our work to create value for businesses in their recruitment.
The reason these numbers are what they are is because I don’t send candidates to a job where their aspirations can’t be met or where they don’t solve the hiring problem in the business.
I don’t send people over for interview for the sake of it, saving you as the hiring manager time.
Networking & headhunting
18 years of my recruitment career have been spent in Civils. In that time, I’ve built up relationships I can rely on. People who can help me and recommend me to others (which I’m grateful for).
Then there’s headhunting. It takes real skill to call someone who is gainfully employed and doing well in their role, interrupt them in their working day and interest them in another job opportunity. (Try it if you don’t believe me – I promise it’s much harder than you think!)
Offer management and onboarding
Offer management and particularly onboarding are key parts of the recruitment process that many miss or don’t do as well as they could. We can’t get every candidate over the line but managing the process carefully maximises the chances of success.
Whittling down the candidates
A recruitment shortlist is the result of a tremendous amount of work. I might send you 4 candidates but will have contacted over 200 to get to them.
It’s a LOT more work than ‘just sending over a few CVs’. See our previous article ‘Trust the Process‘ for more on this.
Recruiters skills’ and knowledge
Good Recruiters have useful skills and knowledge you can draw on:
- Market knowledge
- Planning/time management skills
- Verbal and written communication skills
- Strategic-thinking skills
- Listening skills
- Sales/influencing skills
- Networking/relationship-building skills
- Negotiation skills
- Marketing skills
- Copywriting skills for adverts and social media
- Video presentation skills
And I could go on – all of these can be brought to the table to help you solve your problem.
I choose to believe that most reasonable people will make a balanced decision when given all of the information about a product or service, rather than one based on price alone. Now you’ve got more information it’s up to you. Keep in mind though, like everything else in life, you get what you pay for.
But we’re not going to convince everybody, and for the undecided here’s a quote from a businessman friend of mine John Ruskin:
“There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man’s lawful prey.”
Ok, I’m bracing myself – what do you think about the fees Recruiters charge…
