How Much Do Recruitment Agencies Charge Companies? – The Low Down
This question can’t be answered simply. Depends on various factors. Do you want a personalised service? CV’s with no screening process? CV’s sent to you as and when candidates apply? You want the best? Or just anyone who fits the job description?
Standard terms for one agency can be 30%, another could be 20%, some will work for 10% or 8%. This is a percentage of the package on offer to the candidate. This can include:
- Car Allowance
The recruiters also charge based on a retainer basis. This is where you pay a certain percentage up front before the agency start the work and the remainder when the candidate has accepting the offer.
Spoiler alert– do not work at 8%, you will get rubbish thrown at you with candidates who have been spoken to about the role for less than 2 minutes. You could do the job yourself.
Stick an advert out and choose a handful of candidates to interview that look ‘OK’ . You will then find they are not in the slightest bit suitable (those that show up).
Want quality candidates? Pay the price.
Heard of the term - You get what you pay for? In recruitment, you most definitely do!
Save yourself time and money by using a strategic recruitment consultancy that care about your business and your brand. Do not take their word for it, ask them what their business values are. Chances are if they are similar to yours, they will do a good job. Do not tell them your values, ask them what theirs are.
There are different packages available for clients of all shapes and sizes. The one question recruiters get asked ALL the time is ‘what are your terms’ to then be told, we only work at 10% or some have even said we only pay £1000 one off fee. Right, so you basically want to go out to a thousand agencies, and have CV’s thrown at you. Response – No thank you. In a candidate driven market, you need a plan of action.
Those agencies that work to these terms are doing so with hope that one of the many CV's they send stick. You are not getting a good service, what is the point? As for your brand, candidates probably run a mile when they hear about you because none of these agencies feed anything back to them when they do apply. My guess? You have not responded because ‘you don’t have time’ or the recruiter has thrown so many CV's they forgot who’s who. They don't bother sending them an email or a follow up call to update them.
If you want a lower rate, you are not going to get the high-end service. Paying 20% and having them go down to 8% will mean the level of service you get, is basically…nothing. Yep, Nothing. You are paying for an advert; you might as well do it yourself.
If you just want CV's with no thought process behind it (this does not involve MSP/RPO Volume recruitment) then 8% is bang on.
If you want the best in the market, fully vetted, pre-screened to your requirements, taking into consideration your business values and measurables of the roles, the environment they will be working in, you are looking at 20% plus. BUT if you are the type of company that have a Talent team in place, they need to know what you want as a hiring manager. They need to know what is important for YOU specifically. It is a candidate driven market; you need to stand out to them. Do you know what candidates specifically are interested in? SELL that. Those in the talent team need access to you as a Hiring Manager. We talk more about candidate pipelines and finding quality candidates in another blog.
Exclusivity is a big thing in recruitment. It allows agencies to do a thorough job. Not in a race against time with other agencies, which mean you are getting every CV that could possibility be a good fit with no idea why they have submitted them. Remember, not everyone knows how to write a CV. It is the recruiter’s job to ensure the candidates experience is drawn out into the CV. The brief submitted across with the candidate’s CV should outline why they have been submitted. But – you will not get this paying 8% or 10%.
Side note – if you advertise for the same roles over and over again, because you can not get the traction, then candidates see this and know that there is something definitely wrong with something in the business. Either the salary is too low, the environment is toxic or you are not prioritising recruitment. I will tell you what candidates say – ‘I have seen that job re advertised over and over again, not sure I want to apply for it’. A good recruiter will turn this around, because they care about your Brand, but do you really want candidates to think negatively when they hear the company name. Answer is NO. The amount of time and effort that goes back into building back your brand and reputation can take years. Do not be that Client!
Your business brand is important. You would not want people to think you were not very good at your job, so why would you want people to think the business is not very good? Make time to hire. Spend the time at the beginning with a consultative recruiter who can work with you through the process and get you organised with the right people through the door.
Every agencies services they offer are different. I am sorry to say it, but it is! No matter what you believe or what you have heard, they are not all the same!
Why small, medium and large companies use TechWaves for Recruitment?
You can leave work on time. Recruitment will not take up a chunk of your time when you should be doing your day to day job. You will not need to stay late to complete your tasks and if you are it won’t be because you are spending time recruiting and figuring out how you are going to meet your targets with 2 heads down in the business. You can rest easy at night knowing your business and brand is being protected when we recruit for you.
- A full briefing onsite – with a project plan.
- Find out what the environment is like and the culture of the company
- A full debrief on the organisation, and specifically what the manager is like! Single most important thing. The management style, team dynamics career development again is SO important. You offer someone to start without them knowing the frustrations of working for this hiring manager, they might leave? If they are aware and can deal with it, even better. People work for people, not a business. People also leave managers that they do not get on with.
- A detailed job spec review along with deliverables confirmed.
- We source from the competition as well as the best there is in the field we are recruiting for.
- A snazzy advert out. No we do not copy and paste the job spec, who even does that?
- We screen candidates (45 minutes minimum) and send you the best 3 or 4 candidates within the specified time.
With each candidate we do the following before submitted to you
- Speak to the candidate about the role, if interested send the spec
- Organise a further screening call – 45 minutes at a minimum
- Confirm specifics, package details, notice period, interest in the role.
- Ensure availability for interviews are confirmed
We partner with YOU as a business, we are an extension of your business. We represent your brand in the market place and we are the only agency you use exclusively.
20% - you get all the above along with
- A full telephone screening with the candidate. This will be against your measurables (what you want this person to achieve in the first 3 or 6 months of being in the role). We will also meet with them/skype/zoom
- Strengths and areas of development in a report format for every candidate. We do all the hard work for you.
- We work with you to put the deliverables/measurables document together. What is the saying? Spend time at the beginning to get it done right and you won’t need to spend more time cleaning up the mess if you take short cuts. Did I just make that up? Maybe, but it’s true.
8% - In short, we don’t.
For volume work, you are looking at admin, purchase ledger, helpdesk, easy to source and screen. We expect that you will hold assessment centres for large influx of candidates for customer services roles, or for PL/SL/CC – working interviews. We like to do a good job. It’s our reputation as well as yours. Unless you can spend the time to really bring in the right calibre of candidates, then we aren’t the right agency for you.
If you care about your business and your people, you want to make sure that the people you bring in are happy. You want to look after your employees. You want to reduce attrition. You want to spend less time with the recruitment side and get your daily tasks completed. Increase business profits. Use a damn good recruiter! Someone who will care about your business just as much as you do.
How long does the recruitment process take? How much time do I really need?
All in all, if you want to reduce your time to hire, be prepared to make some changes. This is an example of how TechWaves works with our Clients:
- Two hours at the beginning with us onsite at Client location or ours discussing what they want. This includes
- Reviewing the job spec and putting together the measurables to ensure we are screening candidates correctly. Making changes where required. This along with the advert will be authorised before sent out online/ to candidates.
- CV submission dates confirmed, interview dates confirmed (1st and 2nd stage) to reduce fall out of candidates
- Project plan is mapped out and agreed with those involved
- 1 hr reviewing CVs (for 2 people involved that’s 2 hours work).
- 1.5 hours each for interviewing the candidates, including a tour of the company site and where they would be working. (1st stage). 3 candidates – 9 hours interviewing in total
- 1 hour for second stage interviews
That’s a total of 18 hours of the business time** (two people involved in the process). It is organised, specific and it shows that you are committed to getting only the best talent in. With a thought-out process you are likely to keep these candidates interested, even when they have others offers, interviews in the process.
**this is if you follow our advice, we know recruitment, you know your business. We know what works and does not work, trust us when we advise you.
HR managing the recruitment?
If you work in HR, I can completely understand the frustration of dealing with agencies, and then having to keep taking calls for updates. No offence intended, but the reason you are in HR is not to deal with recruitment? Am I right? Did you just take this as an add on to the role you are in? Do you really enjoy recruitment? Most of the HR Managers I work with do not, they dislike it. Recruitment is a different bag, and not everyone knows how to do it well. Even some people working in recruitment don’t know how to do it well.
I remember in one of the companies I used to work for, they (HR) made a comment 'You just go on linkedin and message people, it isn't hard'. Are you KIDDING me? WOW! That is like me saying, HR just push paper around. Exactly! How offensive is that.
Do not belittle what us recruiters do! Blood, sweat and TEARS go into recruiting. If we fail, we kick ourselves for months (well I do)! Purely because we genuinely want to do an amazing job and for me, if a candidate interviews badly, I take it personally. I feel like I failed them and the business I am recruiting for.
You want honesty, we will give it to you. We won’t waste your time.
Want to prove me wrong with the 8% or 10% agencies. Go ahead and work with more than one agency at this charge rate and see how much of your time it takes up and how long it takes to recruit into that position. To be fair, if you are working with more than one or two agencies at 15% you definitely are not getting the service as I have described. Exclusivity is where it is at.