Choosing a Third-Party Recruiter

“Send me the terms, I’ll review it, and get back to you”.

Did you know that it is actually counterproductive to agree or disagree to terms over an email. Here’s three reasons why:

1. How can you determine the value of a service just by calculating the cost?
2. How can you agree to sign an agreement without knowing a recruiter’s ability in representing your firm??
3. How do you know if their candidate pool is indifferent to yours??

For the reasons stated above, see below factors to consider in helping you make an informed decision when partnering up with a third-party recruitment consultant:

1. Budget for Recruitment: While you may be in a desperate need to hire, it’s important to collate your finances and assess how much you can afford to spend on recruitment. If you already have multiple internal recruiters or spend thousands of dollars on marketing to attract talent, it is crucial to assess what hiring strategy has consistently worked well for the team.

?While having in-house recruiters can feel like your saving costs but if majority of your success has come from direct applicants or referrals; how effective is it to have multiple in-house recruiters as opposed to using third-party specialist recruiters when you require specific assistance with hiring?

2. Critical Hires: Once you have identified how much you are willing to spend on external recruitment, you need to determine which positions which require the most attention. Too often, global as well as boutique companies sign a standardised agreement simply because, they are happy to move forward as long as the terms are low or industry average.

This creates another problem before you even know it, you find the company filling positions that the company have direct success with or hiring unicorn candidates because they don’t come around often.

In all honesty, as a recruitment consultant that has helped multiple business grow in remote locations, I truly believe in opportunistic hires as they are crucial for strategic growth. However, if the positions that are critical for team are not focussed on, you may find yourself in excess of your recruitment budget leading to loss over a period of time.

3. Type of Agreement: This one is personally my favourite one because if you are in partnership with me, you know I never believe in one-size fits it all!

For example, remember a time you wanted to buy a clothing item and it said ‘one-size’ and then you’re left thinking, “what if I’m not the average size?”. Followed by, not making the purchase at all or taking a risk and buying it anyway because you were unable to make an informed decision.

This why the it’s imperil to discuss an agreement that best suites the hire/hires you require assistance on. Highlighted below are different types of agreement with company references to understand why types suites your businesses needs.

????(A) One-Off Agreement:?

• If your company grows with an average headcount of 1-2 employees per year.
• If your company is struggling to fill one position for over 3 months.?
• If your company has had no experience or a bad experience working with third-party recruiters. There is less risk involved in this partnership as it gives you a chance to assess the success rate and service provided.?

????(B) Retained Agreement (Up-Front Fee):

• If your company requires immediate assistance due to influx in growth or high turnover.??The reason I suggest this is option is because the longer the position/s are open, it could lead to a downfall on several factors such as project deadlines, quality of work, profits, reputation, or further turnover.?
• If your company requires the position to be filled in a short-time frame. As this will motivate a recruiter to spend more time and resources ensuring you reap success in the timeframe agreed on.?
• If your company is struggling to fill multiple positions for over 3 months.?

????(C) Exclusive Agreement (Up-Front Fee):?

• If your company is recruiting for an executive position. This would mean, you don’t have multiple recruiters working on the same role, as it would hinder the confidentiality required in the search.
• If your company is satisfied with a consistent delivery of a third-party recruitment firm. This option is beneficial to both parties: (A) For you, it’s because they will learn to represent your company at best and over period of time get embedded into the culture of your firm. This will result to sending profiles of candidates who are both a technical and cultural fit. Furthermore, this will improve the efficiency in the recruitment process so you don’t have to make the time to speak with multiple recruiters, overlapping submissions, and sifting through emails. (B) For the recruitment firm, since forecasting plays a crucial role in determining annual revenue, the more guaranteed revenue they have from a company, more time and resources will be provided.?

????(D) Contingency Agreement:

• If your company grows with an average headcount of 3+ employees per year.
• If your company is seeking to fill multiple positions across different locations.?
• If your company are seeking to grow aggressively locally, nationally, or globally. It gives you the option to work with multiple recruiters associating low risk since you are not paying an upfront fee. This aid in indirect marketing for growth and speedy delivery in filling the positions.?

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?4. Type of Recruiter: There are two types of recruiters, some are generalists and others are specialists. Each recruiter will utilize different techniques for their search impacting the value of partnership offered to you. For example, a generalist recruiter will not have an understanding of the job description as they solely rely on direct applicants or mass outreach. Typically, they will also work on a volume basis. Due to the techniques utilized, this impacts the success rate on positions filled and further limiting strategic growth opportunities as they don’t have an understanding of the market.?

?On the other hand, specialist recruiters focus on a specific service line/location. They will also learn about the market to effectively position the branding of the company. This also means they are not relying on direct applicants as they seeking the best talent for the continued growth of the firm. Furthermore, since they take more of a networking approach and less of, aggressive hiring approach they are also able to help motivate passive candidates to make the move and advice on strategic market expansion opportunities.

Lastly, when going into any recruitment partnership, it's worth nothing; success rate is typically very challenging to ascertain since humans are both risk-averse or susceptible to change.

For all the reasons highlighted above, it's crucial you pick a company that is best suited to your business.