I’ve heard and seen this a lot recently but I must admit, I’m struggling to understand the logic.
My immediate response is “Why”?
Yes, of course hiring through an agency comes with a cost to the business – a recruitment fee.
However, not having someone in a role also comes with a cost to the business. If not, why hire them at all?
Furthermore, not having the best person in the role comes with an even greater potential cost to the business.
In finance recruitment, examples of these costs could be the business missing out on the analysis which helps the business win a key contract or missing an opportunity to improve a key process which could drive large cost efficiencies. I’m sure there are similar examples for other sectors.
These opportunity costs are generally far greater than any recruitment fee charged by an agency to find the best person. This ultimately means that the time to hire a role is critical and any delay can and will cost the business money. Hiring managers get this.
All too often though, I see significant delays in time to hire whilst a direct sourcing process is untaken, only then to present the right solution once we have been engaged to support. This could have been avoided if we had been engaged at the same time the direct sourcing approach was started.
I would add that the recruitment fee is not charged – and therefore there is no cost to the business – unless the agency successfully finds and places the person into the vacancy (discounting retained searches of course).
So, back to my original question – Why? The business doesn’t pay a fee unless the agency finds the best person and the time to hire is minimised by avoiding delays in agencies being engaged. A perfect complementary service to the internal recruitment function.
And the business gets to see the whole market, not just a snapshot….
By Paul O’Hara