External Recruiters can save you money, how?
Shweta Krishnan
Entrepreneur| SheEO Activator| Startmate Coach| Left & Right brain thinker
Let's establish the basics here. Recruiting in-house should be the first port of call (unless you don't have a talent acquisition team) as external recruiters will cost $$$, something you probably haven't budgeted in for.
There is a stigma attached to using recruiters (fair or unfair) and we can put it down to stereotypes, but recruitment agencies are still in business. Why? Because we can't deny the fact that they add value.
Can I please request you to park your prejudice or pre-conceived notion often formed by 'generalization' for the next 5 mins and reflect upon the below? I also look forward to your comments, thoughts, feedback!
- Leaving a position open costs you money
According to the SHRM (Society of Human Resource Management), the average position takes 42 days to fill at a cost of $4,129. If you add that to the possible one-month salary cost of vacancy you can have a cost of over $5,000.
This is general statistics, however, does not account for the below:
- Cost for roles having a direct impact on Topline can be far higher such as Sales, Account Manager/Customer Success
- Time= money! The time it takes to wade through 200+ resumes in many cases
- Few candidates back out at the offer stage which prolongs the process
- You have a very picky Hiring Manager/ Founder who knocks back every candidate because he or she didn't meet the pre-requisite + nice to have + a rare skill 1 in billion possess
2. An external recruitment agency might be able to find you a candidate below your budget saving you $$$ over a period of time?
We have had instances where we have placed candidates below budget whilst getting the candidate a decent hike.
Every individual has a different driver and sometimes this is the role itself, title, company culture, their manager who could be a potential mentor, progression opportunities, etc. As a recruiter (internal or external), it is important to identify this. One of my candidates took a base salary hit because he absolutely detested his workplace which was toxic and ended up making more in commission with the company where we placed him plus got a 30% salary hike the following year because he proved himself.
89% of employers think employees leave for more money but in reality, only 12% do (Source: Gallup)
The reason why this is uncommon is that recruitment agencies are incentivized on a candidate's salary hence a vested interest in negotiating a higher package.
Have you considered the below?
- Converse arrangement ie incentivize your agency for securing you a fantastic candidate within or below budget? We at RedBeard offer this, ask us about the commercials (perhaps you can use this with your agency?).
- Work on a fixed fee so your recruitment agency is aligned with you in terms of the package. Again, we at RedBeard offer this, ask us about the commercials (perhaps you can use this with your agency?).
Not to disregard the fact that a good recruitment agency acts as an extension of your team and helps as a third-party facilitator to close the candidate.
Use your agency smartly and save yourself $$$ in the long run!
3. Activate the passive talent pool in tandem with the active search, why wait to fail?
Most companies activate the Recruitment agency agreement after failing themselves.
It would be safe to assume that a company would advertise on Job Boards and Linkedin thereby covering the active job seekers.
What about the passive?
73% of candidates are passive job seekers (Source: Talent Now)
Fortunately or unfortunately, most recruitment agencies don't charge any upfront fee and only invoice upon a successful placement. It is a lot of work that goes into finding you a candidate, essentially offering this service for free.
Why not activate an Agency that focuses on Passive candidates (headhunting) rather than waiting which will ensure you cover as close to 100% of your target market thereby expediting your process, saving you money? Because remember an open position costs you money?
Please do not engage with an agency that mirrors your effort, no point in 2 organizations doing the exact same thing such as advertising on Job Boards.
Hope the above has offered some food for thought?
If you're a Statistics Geek like we are at RedBeard Talent, below are some more interesting statistics we stumbled upon:
- Each vacancy costs the average company $500 a day (Source: Solutions Driven)
- 60% of people report that benefits and perks are a major factor in considering whether to accept a job offer (Source: Glassdoor)
- Organizations that invest in employer branding are three times more likely to make a quality hire (Source: Glassdoor)
- Top candidates stay available for just 10 days before getting hired (Source: Talent Now)
- On average, each corporate job offer attracts 250 resumes (Source: Zety)
If you want to pick our brain on Structuring attractive Comp & Ben, or even other perks (valued by candidates), schedule a free 30 mins workshop HERE.
W: https://www.redbeardtalent.com/
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