One of the most recurrent questions we received while offering IT recruitment services was, if is there a cost-benefit on hiring our services, and how do your clients justify the fees of our services?
Our blog aims to help create a cost-benefit analysis that can be used to confirm whether or not your recruitment agency is providing a cost-effective solution.
Recruitment agencies have been operating for many years in the U.S. and many other countries, so there has to be some benefit to using them, otherwise, they would not exist. I know for a fact, that multi-million-dollar companies, have good and a big recruitment team, and even so, they use recruitment agencies constantly. Small companies with HR resources and hiring managers are already stretched thin with their day-to-day responsibilities and frequently use these kinds of services as well.
Here are some of the benefits of using a recruitment agency so you can make your business case.
Benefit #1 – Immediate Candidate Pool
Recruitment agencies have already an established database of candidates that will be a strong fit for your profile, this will translate into faster hiring. The agency’s purpose in life is to find candidates, they have an established sourcing process for it, not to mention an established network of connections that they will use to find the right candidate for your needs. Remember, skills that are harder to find create a more significant reason to work with a recruitment agency. Instead of taking 2 to 3 months to find the right candidate, you can reduce the time to 2 or 3 weeks.
Benefit #2 – Passive Candidates
Recruitment agencies have the experience to reach out to potential candidates that are not looking for a new job, they know how to incentivize them to make a move and bring them to the table.
Benefit #3 – Specialized in a specific Industry
Recruitment agencies usually are industry specific, their staff will be specialized in a specific sector, which translates into a better understanding of the position. They will also be able to provide market insights like salary rates, hiring complexities, market trends, etc.
Benefit #4 – Client’s center of attention
The mission and purpose of a recruitment agency are to place a candidate. Fees are not charged until the candidate is hired and agencies are investing time and resources for you before any invoice is issued, meaning that they will do everything they can to deliver the best of the best candidates for your open positions to gain business and trust.
Benefit #5 – Platforms knowledge
Another benefit that might not be very clear is the job platforms such as LinkedIn, Indeed, Monster, Cleared Jobs, etc., agencies know how to squeeze these platforms and use them in your favor, and because these tools have a cost, you will be saving a lot of money just on this.
The demand to fill and hire technology positions adds new budgeting challenges, if you are looking for an ROI, here is a process you can follow to justify an agency's cost.
Determine the average time to fill a position, for example, resume reviews and shortlisting, setting up interviews, interviews, offers, etc., and translate it to a cost figure by multiplying it by the cost of the people involved in the hiring process.
Determine external costs, like posting to job sites (Indeed, LinkedIn, etc.), job fairs, relocation costs, and advertisement.
Determine what is the costs of having the position vacant. Most companies' HR departments have this metric. The cost of not filling a position is the most important calculation in my opinion because it is not only money that you are losing, but the expertise, ideas, and knowledge that the future employees are going to bring to the company. The more skilled a candidate is the more critical the need to fulfill the position.
In summary, the recruitment agency can accelerate the hiring process at least half the time as an internal recruitment effort and therefore reduce hiring costs, mitigate the loss of money, and reduces the likelihood and cost of a 'bad hire', you will only get to interview candidates who are truly focused on your business.
Engaging with a recruitment agency might be seen as an upfront expense, but the longer-term ROI and candidate expertise will far outweigh the initial outlay.
If you are looking to quickly fill open roles with qualified candidates connect with one of us today! Let’s work together to make your company the success it should be.