Employing a recruitment agency to solve your current resourcing needs can be fraught with danger if you do not do your homework. It is important to ensure you know enough about your recruiter so that a simple hiring process doesn't turn into a costly and unrewarding pursuit. In Australia, the recruitment industry includes thousands of agencies - some small, some large, some specialist, some generalist, but all with one purpose: to make money. It is often associated with sales-pressured staff only out to make a quick buck, regardless of the service they provide, and is often viewed in the same light as politicians and used car salesmen in the overall quality of their work and their trustworthiness.
However, there are recruiters out there that do not fit this mould and are there to work to hard to satisfy the clients they are working for. Often this results in success first time every time, with a high level of customer satisfaction. Finding these, though, can be difficult.
Here are five elements that must be present in your recruiter before even thinking of engagement. Some elements may be harder to identify than others, but it is necessary to tick off all these beforehand.
1. Do they engage with you fully? Has the Recruitment Agency taken time to understand your business, get a feel for the environment, speak about the requirement and basically sat down and talked to you? If not, it is probably worth another look elsewhere.
The best recruiters act as a partner with your business. Their efforts to understand how your business operates, what the successful elements are within the business, how you have hired in the past, and the success rate therein show them to be above the pack. In all cases, the agent must show genuine interest in your business and the hiring needs within.
Ideally, you want to have a recruiter that can be called upon when needed, simply because if they have taken the time to understand your business, you will want to hold on to that knowledge. What better way to ensure you get the right staff every time, then by having an advocate for you in the labour market?
Additionally, a good recruiter, with strong understanding of your business, will constantly be on the lookout for people that would compliment your staff. The net effect of this kind of service is the most appropriate people for your business at any given time as well as the pick of top candidates when they become available.
2. Do they offer a timely commitment? Noted agents set out a plan of attack as to how they are going to complete your requirement, within an agreed time-frame. This agenda could look something like:
i. Post add on job board / start contacting networks
ii. Phone interviews completed
iii. Face-to-face interviews completed
iv. Presentation of shortlist to the business
v. Arranging of internal interviews with the hiring manager(s)
vi. Reference checking / Police record checks / other checks as required.
vii. Confirmation of placement/starting details
Only then will you have a clear idea as to not only what the agent will be doing for you, but the time in which they will do it.
Added to this, is the communication channels that will be opened with your recruiter. You, as the client, can determine how often you would like to hear from your recruiter regarding progress. Make sure you are clear as to when you can be contacted and ensure your recruiter abides by these requests.
3. How much are you going to pay? To some this is the most critical, forget everything, number one reason NOT to bring in recruitment agencies. It has been widely noted by people who are knowledgeable or not of the industry that recruitment agency fees are astronomical for the perceived worth they bring in.
Depending on the size of your business, agencies can charge a premium to offer their services to you. What has become apparent is the smaller the business, the larger the fees. Some recruitment agencies see small businesses as a means to an end. There is generally no major engagement and the effort taken to search, screen and select candidates is not major. If you consider paying anywhere from 15 to 25% of the annual salary of a new candidate in recruitment fees excessive, look around.
There is an axiom in business that you pay for what you need. In this case, I would suggest this to be a fallacy. The justification for excessive rates is simply not there, and as a business owner, you have the power to bargain your way to a lower rate. And should the agency you are talking to refuse to budge? Move on. There are a number of agencies that do not charge anywhere near the excessive amounts mentioned, yet offer a service far better than what you would receive with these more expensive firms.
Consider this: an expanding small or medium-sized business needs to bring on staff whilst maintaining it's efficiencies around cost, time and labor. However, if the time, cost and labor is not effectively utilized in the hiring process, the net cost of a bad hire can exceed twice the annual salary of that staff, when you look at:
i. downtime to write job descriptions and online ads
ii. screening of applicants resumes
iii. phone interviews
iv. face-to-face interviews (twice, for effective hires)
v. start-up and on-boarding
vi. redoing any mistakes the bad hire committed, by current staff
vii. a repeat the processes i-v
To any small or medium business, this is an excessive - and unwarranted - cost.
The argument to not utilize agencies when put up against the costs of going it alone seems to pale, and given that most managers are not expert HR Managers, enlisting a bit of help could reduce overall expenditure on hiring and could be strategically beneficial.
4. Do you trust your recruitment agent? This could be as simple as a gut feeling, or more methodical, but in all cases, if you do not trust your agent, you are not going to get along well with them and it would be a wise decision to look elsewhere.
Trust is something that cannot be determined by the size of the organization or what the agent says to you - it must be earned.
Don't be afraid to put them on the spot to ensure you are comfortable with their skills; ask them what they know of the industry you work in (or if they are not sure, how they will research it), if they have contacts in this area, what they understand of the labor market or the potential issues affecting the supply of candidates.
In addition, make sure the agent asks plenty of questions about your business because it is an informed agent that will ensure an appropriate candidate will be presented.
Finally, when it comes to engaging an agency, ensure you are completely aware of their Terms of Business. All agencies will have some form of agreement they will ask you to sign before beginning the process. Always go over the agreement in detail, as trust can be broken over the smallest issue with contracts. Engage a legal representative if necessary to give you peace of mind.
5. What else can they do for you? To any small or medium business, it is not just down to what person an agency can put in front of them, but what additional assistance can be offered to compliment this service - the value-add.
As mentioned, we have looked at what recruiters do as part of their standard sourcing activities. Typically, though, good recruitment agencies will do a number of the following over and above these:
- Help prepare the job description
- Assist you with strategies to get the most out of your interviews with candidates, including interview questions and templates, if required
- Handle the salary / rate negotiations
- Assist with a 'to-do' list to complete on the first day
- Prepare new starters for their first day
- Offer a guarantee on placement - that is, if the placement does not work out for any reason, and within a certain time-frame, the agency will replace with a new candidate
- Assist with preparation of internal recruitment policies and procedures
- Look at current recruitment habits and advise on changes, if needed
- Information on any aspect of the hiring/recruitment process
- Conduct information sessions for you and/or your staff on recruitment issues in small and medium businesses
These value-add functions should be the final tick in the box for the decision-making process selecting a recruitment agent, and a measure of a good agency is the willingness to bring those to the negotiating table. Depending on your needs, and the amount of control you want to have in the recruitment process should indicate what impact the value-add will have on your decision-making process.
By following these simple points, business owners can be confident in the knowledge their choice of recruitment agency is based on exhaustive information gathering and research.
More importantly, though, it will ensure that you and your recruiter both understand where you are coming from, and what the agent can do for you. Ultimately, the savings in time, money and effort will be significant and the benefit of having another partner working for the goals of your business cannot be underestimated.
Scott Brown is a recognized expert on recruitment for small and medium business. Based in Melbourne Australia, he understands the complexities of recruitment and the necessity in getting it right. Author of the Recruit Engage Attract blog, his knowledge covers all hiring issues small and medium business need to consider at all times. Scott's website is at
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