What are the advantages of moving away from the multi-agency contingency recruitment model?
I think we can all agree that it is no secret that the recruitment industry has a poor reputation for service and perceived value for money. High fees, poor communication and badly screened CVs are some of the common complaints. These issues are predominately the result of the contingency recruitment model, where multiple agencies are engaged, but only one can be successful.
The multi-agency contingency model
It is widely agreed that agencies working to a multi-agency contingency model, probably have a c25% fill rate which means they have to register 4 vacancies in order to create one placement. You quickly see how this becomes a numbers game and why so many recruitment agencies are heavily KPI driven. If enough CVs are sent, then one may just get the job. In this instance, it is all about the volume of activity rather than a focus on quality. The reason that this model still exists is a combination of how employers choose to buy, and recruitment companies choose to sell, their recruitment services. The good news is that there is a solution and it’s an easy one! Spend some time vetting your recruitment partners and choose one and let them deliver in a similar manner to that of any other professional services firm. You wouldn’t expect 4 accountants to have attempt at your accounts and pay the one who prepares them in the way you most prefer!
You can actually work in Partnership
If you have an exclusive arrangement, then you can change the way that your work with your recruitment partner. The reason that we promote an exclusive model is because we don’t want to sit opposite you trying to sell you our candidates, rather we want to sit next to you and work with you to find you the best possible candidate for your role. If you have 4 agencies working on a position, they are all going to be selling you the benefits of each of their candidates and quite rightly so.
The problem for you however, is that no one is going to be mentioning any of the areas that they may not be so strong. When you work exclusively with a Recruiter, you are able to have a more rounded conversation regarding the pros and cons of each candidate under consideration. From a candidate perspective all applications get the same representation which will also improve the overall candidate experience.
Competitive fee arrangements
We have touched on the issue of fill rates above. It is widely agreed that 25% is an average fill rate when working on a multi-agency basis. Some specialists will be better than this, some will be worse. This means that if you pay a recruitment fee under this arrangement then you are in effect paying for not just your assignment, but also all of the work they have undertaken where they have not been successful. One of the key complaints about the recruitment industry is rates of 25-30% for experienced hire recruitment.
When you look at the maths though, you can see why these levels are so high and that is because most of the time Recruiters are working on assignments where no revenue is going to be created. When working exclusively, a strong Recruiter would expect fill rates to rise to 90%+. If a Recruiter is going to fill the vast majority of assignments that they work on, it means that they can work at a much more competitive level and importantly spend the required amount of time to manage the assignment correctly.
Commitment and ability to deliver.
Moving on from a better fee arrangement, we can look at the level of commitment from both sides. If a recruiting client is showing commitment in terms of exclusivity and/or a retainer, then it makes sense that a Recruiter is able to allocate much more time to the assignment. We have all seen the number of poorly written adverts littering the online job boards, some no more than a straight cut and paste from a generic job spec.
The reason for this is not because the consultants want to do a bad job, it simply comes down to time. In order to cover all the vacancies they are working on they do not have the time to spend creating quality advert copy and identifying which candidates are actually the best fit for the role and organisation.
Once you spend some time vetting your Recruitment Partners, you will be able to ascertain where their core skills lie. Are they skilled Recruitment Practitioners? Or are they highly skilled Recruitment Sales Professionals?
This is a key point, because a lot of firms will send out very polished and capable sales professionals to win business, however the delivery of your assignment is left to someone who wasn’t even in recruitment the month before. I don’t make this point flippantly as of course we all have to start somewhere, but more to highlight the fact many people who work in Recruitment are hired for their sales ability as opposed to their recruitment experience. The ability to cold call 100 times a day is not the same skill that you need to actually deliver a well-rounded recruitment service.
I have spent the majority of my time recruiting within the HR sector, which includes strong experience of recruiting internal recruitment/talent roles. One of the key factors that we look for when taking people from an agency background into an in-house role is the ability to manage stakeholders and ensure that each vacancy is filled in the most effective manner possible. If a hiring manager sends through a role that you don’t fancy, you don’t have the option of ignoring it to concentrate on an easier fill. This is a challenge for many in a contingency agency environment as the key focus of their role is often on outbound telesales activity rather than delivering a quality client and candidate experience.
When you are choosing your supplier, you want those who will protect your brand and ensure a positive candidate experience. As soon as you introduce multiple agencies into the mix, you make this much more difficult to achieve.
We are talking about exclusivity and/or retained arrangements. It comes down to commitment and if both sides are fully committed to the process then it makes sense that time and quality of hire will improve. Traditionally this approach was reserved for senior executive hire, however the principle is valid for all levels. If a hire is not important to your business, then you probably should not be making it.
An experienced recruitment partner will be able to write good quality advert copy that resonates strongly with your target audience. They will be able to put together a clear recruitment timetable and will have the time to identify the best candidates for your vacancy by providing quality and well-rounded short lists. They can manage the offer and feedback process and through closer communication with candidates ensure a seamless transition into your business.
Originally posted on The HR Blog