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Bringing on a new employee can cost your company over $4,000, and typically takes over a month, according to research from the Society for Human Resource Management. With that kind of investment on the line, many businesses consider hiring recruiting firms to handle this responsibility.
A recruiting firm can help you hire top talent with ease and assurance. The company will either work side-by-side with your staff to find the right candidate or own the entire hiring process itself. Your recruiting partner can reduce your cost per hire and time to hire and enhance the overall recruiting experience for both candidates and hiring managers.
Here’s a guide for what businesses should look for in a recruiting company while evaluating options. Make sure your recruiting company has the following essential features to best fit your hiring needs and budget.
1. Know the Options
The first step in evaluating a recruitment firm is to clearly define your hiring needs and specify the position(s) you are looking to fill. The recruiting firm should fulfill all your hiring needs — whether you want to hire many people or just one. The company should be able to hire for any position you need to fill — permanent or temporary, or junior- or executive-level.
There are several types of recruiting firms offering different services. To select the right type that matches your hiring needs, you should understand the following most common recruitment firm types. Understanding the difference between them will help you narrow down a pool of possible options to consider.
- Temporary Staffing Firm — This business focuses solely on hiring temporary staff members to help you on short-term projects or to cover an employee's leave of absence.
- Executive Recruitment Firm — This firm specializes in executive-level hiring.
- General Recruitment Firm — This type of business usually focuses on recruiting for a specific industry to fill junior- and mid-level positions. The one that specializes in your industry can be the best choice for your hiring needs.
2. Look for a Complete Recruiting Solution
Select the recruiting firm that can help you find the best candidates in terms of experience, skill and cultural fit to round out your team. A complete recruitment process is a five-step approach, so make sure your recruitment support team assists you in the complete process:
- Setup — The team gets specifics from your hiring managers to create job descriptions, screening and scoring criteria, interview questions, and more.
- Source — The recruiting team will build a strong candidate pipeline by sourcing from various job boards and social media platforms, and seek out the right candidates for your job profile.
- Screen — Your recruitment team will handle phone screens and provide initial candidate ratings, so you get a curated list of prospects ready for the first round of interviews.
- Schedule — The recruiter will work with your hiring managers to provide candidate assessments and guidance, and will even schedule interviews to move the process steadily forward.
- Selection — The team will assist you in finalizing the right candidate, handling salary negotiation and background checks, and bringing on the best hire quickly.
3. Seek an Experienced Team of Recruiters
Your recruiting firm should have hiring experts on hand to help you recruit the right people. Most of them specialize in specific industries or functions, such as engineering, sales, finance, health care and administrative roles. These teams of experts will help you complete the hiring process professionally and effectively.
4. Establish a Positive Social Media Presence
Make sure the recruiting firm’s leaders are members of relevant professional associations. You can check their status on recruitment agency lists and review sites from different sources. You can also check the recruitment firms’ reviews by real, verified users. Pay special attention to their placed candidates’ testimonials.
5. Enable a Transparent Recruitment Process
Recruiters that make artificial intelligence and technology a significant part of their hiring strategies are typically more efficient than those who don't. Recruiters that automate manual and mundane tasks will provide you with faster hiring decisions.
6. Get the Best Prices
There are many aspects that you need to take into account before choosing a recruitment firm. One of your main concerns is probably cost. But you can ensure you get the best deal by taking time to find the recruiting firm that fits within your budget and provides the best service for its price. The cost per hire will greatly depend on the following contributing factors.
- The industry/location that you’re hiring for
- The type of position or role you are looking to fill
- The number of positions you’re filling
- The salary for the position you’re advertising.
- The type of hire (permanent or temporary, full-time or part-time, etc.).
In general, recruitment firms calculate their fees as a percentage of the first-year salary of the placed candidate. The cost will also depend on the level of involvement from the recruiting firm.
To understand the recruitment firm charges, always read the detailed information about their services, terms and conditions carefully. There’s no set price for recruitment fees, but you can ensure that you’re getting the best price for the service by comparing different fee schedules. The percentage recruitment fee can also vary depending on the type of hire. Following are the three main types of hiring to consider for different available services.
- Temporary Hiring — In this case, firms pay temporary employees directly, then later reclaim the wages, plus a percentage to cover costs, from the employer. There is no set percentage for a temporary hire, it greatly depends on the industry or location.
- Temporary-to-Permanent Hiring — Since recruiting firms often source temporary employees, if you want to shift them into a permanent role, you’ll have to pay a fee to do so.
- Permanent Hiring — For permanent staff, recruiters charge their clients in the following two ways:
- Contingency fee structure — The employer pays the recruiting firm when they successfully recruit an employee for the company.
- Retained fee structure — In this scenario, firms are paid in stages, often up front, once they produce a short list of candidates. The final payment is then made when they place someone.
Look over these options carefully and get a feel for what will work best for your needs and budget. Then you can rest assured that the recruiting firm will deliver exactly what you need.