A Good Recruiting Partner = Great ROI ??

People aren't your most important asset; the right people are. - Jim Collins

Jim Collins, the author behind timeless business books like "Good to Great" and "Built to Last," is renowned for his extensive research on what sets apart successful companies. It's not surprising that some of the world's most successful business leaders share his perspective:

A company's employees are its greatest asset, and your people are your product. - Richard Branson

The two most important things in any company don't appear on its balance sheet: its reputation and its people. - Henry Ford

People are your most valuable asset. Only people can be made to appreciate in value. - Stephen Covey

Employees are a company's greatest asset – they're your competitive advantage. You want to attract and retain the best. - Ann Mulcahy (Former CEO of Xerox)

Certainly, there are other vital components to running a successful business, but the reality is, your business doesn't have to be brilliant from the start. If you find and recruit the right people, they'll help build the business, identify areas for improvement, and elevate it to the next level.

Part of finding the right people involves identifying areas where your business needs support. It could be because you, as a business leader, aren't adept in those areas, or they involve tasks you don't enjoy, or you simply need additional resources because your current employees are overburdened. Another aspect of recruiting the right people is providing a clear picture of what they're signing up for, setting realistic expectations, and implementing a well-structured onboarding process over the first 6 to 12 months on the job.

Perfection is not the goal, and your business will always evolve. However, finding the right people who align with the right roles at the right time ensures the long-term success of your business, allowing it to grow exponentially.

Clearly, finding the right people is paramount and has a significant impact on your business. If securing the right people yields a substantial ROI, it's worth the investment. Many times, the right people won't simply come to you; they need to be actively sought out. And this is where the value of effective recruitment resources comes into play. A reliable recruitment agency can be a game-changer, sourcing and connecting with the right individuals through their extensive network, tools, and resources while promoting your business to attract top talent.

By not harnessing the power of a recruitment partner, you're essentially relying on candidates to come to you. This narrows the talent pool considerably. According to Recruitee , approximately 75% of professionals are passively open to new roles. In other words, they're not actively job hunting but are receptive to the right opportunity. The more specialized or senior the role, the smaller the talent pool, and the higher this percentage becomes. Without recruitment resources to actively seek out these passive candidates, you're limiting your options to just 20-25% of potential candidates. Moreover, many of the best candidates are among that 75-80% that you're not reaching.

Recruitment fees may seem like a significant investment, causing sticker shock for many companies. The knee-jerk reaction is often to handle the hiring process in-house and hire an internal recruiter. However, this can be a long-term commitment that is not necessarily more effective or cost-efficient. Using a recruitment agency can actually be more economical. External agencies provide flexibility, as they are only needed as and when required. In contrast, an in-house recruiter demands a fixed salary, benefits, workspace, equipment, and tools, along with the challenge of effectively managing the recruitment process.

Additionally, there are other critical considerations when thinking about in-house recruiters. Their experience and expertise may be limited in scope, and their motivations for transitioning from external recruitment to an internal role may raise questions. In essence, external recruiters are subject matter experts who can serve as invaluable resources for your business. They excel at identifying and securing the right candidates for positions that will significantly impact your organization, extending well beyond just C-suite or senior management roles. Many of these individuals are currently in stable positions, not actively seeking new opportunities.

Here's the breakdown:

External Agency Fees: In the recruitment industry, a standard fee is around 20%, based on the new hire's first-year base salary. Suppose a company chooses to work with recruitment agencies for three key hires, each with an average annual base salary of $100,000.

Cost per hire: $20,000 x 3 hires = $60,000 annually

I understand that this might initially seem like a substantial investment. However, if your business makes just a few crucial hires each year, investing in a trusted recruitment partner who can identify and recruit the right people for your business is a sensible choice. When you work with a recruitment partner, you'll only need to dedicate a small amount of time, allowing you to focus on your business.

Using a Recruitment Agency:

• Initial Meeting: 1 hour (The first meeting is typically the most extensive. As your relationship develops and they become a true partner, these meetings can be as short as 10 to 15 minutes to confirm specific role details).
• Resume Review: 5 minutes per resume (A good recruitment agency will send only the best candidates who have been fully pre-qualified, typically no more than 3 to 5 resumes), maximum 15 to 25 minutes.
• Interviews: 1 hour per interview (Let's say you interview 5 candidates in the first interview and bring in 2 candidates for the second interview), totaling 7 hours.
• Offer Stage: Maximum 30 minutes.

Maximum Time Investment: 9 hours

Not Using a Recruitment Agency:

• Meeting to Discuss Role: 1 hour
• Crafting the Job Posting: 1 hour
• Filtering Through Applications: On average, a job posting attracts around 250 resumes. Research indicates that companies typically spend only 6 to 7 seconds reviewing each application. Consequently, this takes roughly 30 minutes.
• Scheduling Initial Phone Screens with 15 to 20 candidates: 2 hours
• HR or Internal Recruiter Initial Phone Screens with 15 to 20 candidates: 15 minutes per call, around 4 hours in total.
• Sending Decision Maker the "Top 10" Filtered Resumes: 5 minutes per resume, approximately 50 minutes.
• Organizing Interviews with the Top 4 to 6 Candidates: 1 hour
• Initial Interviews: 6 hours
• Second Interviews (if applicable, with 2 to 3 candidates): 2 hours
• Offer and Negotiation Stage: Highly dependent, but in a smooth scenario, roughly 1 hour (though it rarely goes this smoothly due to candidate desires and expectations).
• Arranging Start Date and Onboarding: 1 hour

Total Time Investment: 20.5 hours

You might be thinking, "That's not a huge difference!" However, this internal process estimate is quite rough and may not accurately reflect the actual complexity of managing recruitment in-house. In practice, internal recruitment can be more time-consuming and less effective than these numbers suggest, particularly when considering the complexities of qualifying candidates thoroughly. Moreover, the hidden costs include the time lost by all personnel involved in the hiring process, the risk of not finding the right person and having to restart the process, and the potential costs of onboarding the wrong hire.

While external agencies do not guarantee success every time, their understanding of your business makes it highly probable. In my seven years in recruitment, out of hundreds of placements, there has been only one instance where a candidate didn't work out, and I found a replacement at no extra cost. Most recruitment agencies offer a guarantee, typically lasting around three months. If the candidate doesn't work out due to factors within the agency's control, they will find a replacement for free.

The key is not just to use a recruitment agency but to incorporate them into your hiring strategy. If finding the right people is the most valuable thing you can do for your business, then give them a seat at the table. Treat them as an integral part of your business, a genuine partner who understands your business inside out. By doing so, they can effectively sell your business and the opportunities it offers, attracting top talent.

I cannot stress enough the importance of trusting the recruitment partner you've chosen, investing a little time upfront, and following their system throughout the hiring process. Miscommunication and disorganized processes often stem from a disconnect between the client and the recruitment agency. Trusting your partner and providing all necessary information ensures a successful outcome. The goal is to find the best people for your organization – there's a reason you're using their services. Trust their expertise.

Are you seeking a recruitment partner to supercharge your hiring strategy and discover the right talent for your organization? Want to delve deeper into the world of recruitment agencies and uncover the benefits of collaborating with the best? At Twin Staffing Inc. , we're eager to connect with you and answer any questions you may have. Let's embark on a journey to find the perfect fit for your business together! Reach out to our dedicated Client Executive team, consisting of Jon Banfield , Nic Banfield , or myself, Parker Evans .