Fixed fee recruitment – the benefits and pitfalls
There are more and more fixed fee recruitment models entering the market.
You’ll get no argument from me that the contingent fee model that most agencies use doesn’t constitute value for money. Particularly not when you consider how much the internet and internet based advertising has automated the actual process of applying for a job. But I believe that reducing unnecessary fees should never be contemplated if it includes a compromise in quality.
So should we be applauding these new kids on the block?
I’m not so sure….
Automate is the key word here; just because something is automated and on-line, doesn’t make it an efficient process. In fact, it’s not very different to the services that most major job boards were offering years ago.
Choice is good. The choice to get extra help in busy times can be a useful benefit for teams that are short on resources. The attractiveness of this choice is only heightened when the cost of a “fixed fee service” is contrasted with that of using a recruitment agency, particularly when the lower end of the prices on offer is now less than £500.00.
However, many “fixed fee” recruitment agencies have the same pitfalls as traditional agencies.
Efficiency: Some fixed fee models simply advertise and either send all applications to the client or undertake minimal screening. Without modern applicant tracking technology, this creates the same issues that exist if the advertisement was simply placed directly by the client.
Quality: Recruiting the best quality candidates is about attraction and assessment. Most fixed fee agencies don’t CV screen or interview. Without a quality focus in the recruitment process, costs may be low, but staff turnover will be high – and this turnover will inhibit the results that businesses can deliver.
Employer Brand: Without a focus on the quality of the recruitment process, and the response to all applicants, employers will continue to struggle to improve their employer brand – which in turn makes it harder to attract the best talent. Fixed fee agencies are about generating high response – they do not have an answer as to how to adequately deal with that response from a brand perspective
Exclusivity: While clients may find a suitable candidate, most fixed fee agencies do not offer exclusivity of the candidates that are submitted or that apply to their jobs.
Management Information: Without clarity on the ratios of success from each on-line site used, clients are unable to assess the best attraction sources for their employment brand. And a recruiter should really be judged on the quality of the candidates that it helps to recruit over the long term in regards length of service. Fixed fee recruiters may offer little in the way of management information.
In summary; outsourcing the posting of an advertisement can save time and deliver savings to the cost of advertising on line. However it doesn’t add the recruitment expertise that can in the long term enhance your employer brand, reduce turnover and help you to make the strategic decisions that will deliver an efficient, quality focussed recruitment partner.
Watch out for other hidden costs in fixed fee models. Too many applications will steal valuable time from your managers. Poorly screened candidates that make it through a process will reduce productivity in your teams and add to the internal workload of training and induction.
So are we against fixed fee recruitment?
No, but we do believe that in order for any recruitment partnership to add value:
- Candidates should have a positive experience, no matter what the outcome.
- The process should deliver the best quality applicants in the most efficient and cost effective way.
- The client should have exclusivity of all applicants, in order to protect their employer brand.
- Turnover costs should be monitored closely and management information should evidence the value of the solution as well as assist in longer term decisions.
It will always be difficult to look at the resourcing of employees in a purely commoditised way. Their recruitment journey, their input, how long they stay and the many and varied costs involved, make the decision more complicated than most other resources.
In order to assess success, more than just the “fixed fee” itself needs to be considered.