The recruitment process is now, by all accounts, a daunting affair. It’s been
likened not so much to an art as a science – such is the complexity of the
process and the jigsaw-like pieces that must slot seamlessly together to get the
best people into an organisation. It’s no surprise that recruitment agencies
have risen to such prominence in the minds of company leaders and executives
over the past decade. In a tight, complex labour market, any assistance is
better than none.
What options are out there and what are the pros and cons of using a third
party for recruitment needs?
Over time, the biggest change has been the growth in number and scope of
services offered by recruitment agencies. Today there are large multinational
recruitment agencies and small boutique specialists and everything in between,
and the range of services they provide has also changed. Many organisations will
have preferred supplier agreements with a range of agencies in order to cover
all bases. Indeed, it is now possible to outsource large chunks of HR and
Building agency relationships
It’s a cliché but the best recruiters are those who truly partner with their
clients. They take the time to understand the makeup and culture of that
business, and know what kind of people will work well. They also know the
industry in which the business operates and are prepared to attend industry
functions to increase their knowledge. They will know who’s about to leave an
organisation before the organisation does – because they network so effectively.
Building that relationship takes an investment of time – or what could be
called ‘conversations without purpose’ – to the point where the recruiter should
be confident enough to say, ‘no I don’t think we can do that job for you’.
Bear in mind that there are plenty of agencies out there who will simply want
the business. They’ll look to get a bum on a chair, with no real concerns about
the duration that person stays for or the fit.
HR professionals often claim that a trusted agency consultant is like gold –
particularly in an industry where consultant turnover is notoriously high. If
that trust exists, many steps in the recruitment process can be passed over to
the external recruiter, and it’s only necessary for the employer to become
involved when a shortlist of candidates is produced, or perhaps to check
references. In exceptional employer/agency relationships, the employer will
allow the agency to send through unsolicited CVs, simply because the employer
trusts the judgment of the agency and the agency understand the needs of the
Central to this relationship is the service level expectations agreed with
the agency. Clarify exactly what you are asking for and what you expect to
receive. Most managers have had the experience of being inundated with CVs,
where they’ve specified that they are only interested in people suitable for
senior roles and yet they receive candidates with two years of work experience.
A clear brief will hopefully remove the likelihood of unsuitable candidates.
It’s also important not to fall for time pressure tactics – for instance,
when an agency consultant says that a competitor is also interested in a
candidate and is about to make an offer. Nothing replaces good sound recruitment
practices and when the process is sped up prematurely it’s not going to work.
It’s crucial to continue to recruit for the right skills and behaviours.
As always, perhaps the most contentious issue is the price agencies charge
for their services. Once upon a time rates lingered around 10-12%. Now it’s not
unusual to see rates as high as 25-30+%. As the rate is charged on annual income
for the candidate, one might think it doesn’t need to change too much, given
that the amount will increase with the CPI and cost of wages. The increase can
therefore be traced to broader service offerings and the sophistication of
today’s labour market.
However, in some cases the rate charged is more than justified – especially
for hard to fill roles and senior positions. In addition, agency rates should be
low on the list of considerations; those employers purely looking at price will
get what they deserve.
Before engaging any recruitment assistance it’s important to be clear about
exactly what is required. The most successful organisations will have clear
talent management strategies. These strategies look at short, medium and
long-term business objectives and map talent strategies to those objectives. For
example, if the business is aiming to grow sales by 15% in the next five years,
what human capital requirements will be needed to make that a reality? Or
perhaps the business aims to set up overseas operations – what talent will be
required to do that? What talent already exists within the organisation that
could potentially be developed and promoted from within, and where will it be
necessary to bring in external talent?
Once a talent strategy has been aligned to business strategy, choices need to
be made about the most effective means to achieve those talent objectives.
Traditionally this is where an organisation’s HR department would kick into
gear. However, there have also been changes in this area over the past decade.
Larger organisations in particular will now outsource many day-to-day HR
functions to third party operators such as payroll and salary packaging
In house vs outsource
In HR circles, the outsource/in-house/recruitment hybrid debate continues to
There is merit to doing it all or as much as possible in-house, but it’s vital
to understand what you’re trying to recruit for and ensure you have full
understanding of the process, and make sure it’s done as efficiently as
Alternatively, if you find there are people who can do it better, more cost
effectively and have a more up to date view of the market then it’s worth
considering outsourcing some or all of the process.
Another alternative is to have agency consultants sitting within your company
or firm. Under this arrangement – known as in-house recruitment outsourcing –
recruiters are effectively employees of that organisation, yet they bring the
resources and skills of the agency with them. In this way the agency reps learn
about the inner workings and culture of a company particularly well.
The recruitment choice really depends on the organisation and what sort of
infrastructure it has. For a small firm that doesn’t have HR infrastructure, an
external agency would likely be very positive because they don’t have the skills
and experience in-house. For a firm that does have the infrastructure and also a
recognised brand who would achieve more by advertising themselves it’s clear why
they can do it alone.
One thing is clear: agencies, especially those with good reputations, vast
candidate databases and well-connected consultants, can provide a valuable
lifeline to already-burdened managers.
Iain Hopkins is editor of Human Capital magazine in
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