Hiring the right people is as significant to the success of a company as the business model and health of the balance sheet.
Recruitment is a highly lucrative unregulated and fast growing industry. It is important therefore for companies to understand the different options available to them, the costs as well as the benefits and any downside of the choices they make.
Common recruitment mistakes
Organisations in high growth mode often run very inefficient and costly recruitment processes with little thought for the candidate experience even though it is a seller’s market. Multiple repetitive interviews, waiting until vacancies have been created to start a process and failing to assess candidates thoroughly are typical.
Some Key Facts
The CIPD (Chartered Institute of Personnel and Development) in partnership with Hays Recruitment, conducted a Resourcing and Talent Planning survey in 2015.
Resourcing and talent management in current economy “an employee’s market”
- Half of CEOs have recruitment & talent management as a priority;
- Three quarters are recruiting key talent/niche areas;
- Growing demand for labour – more than half expecting headcount to increase;
- Skills shortages are escalating – four-fifths feel that competition for talent has increased;
- Lack of specialist or technical skills & lack of sector/industry or general experience were common problems;
- Organisations are increasingly required to be creative in both their search for candidates and the packages they offer.
What are your recruitment options?
Your network – Many companies use their personal network to find staff and this can be very effective. However it can also lead to skills shortages and complications with personal relationships.
Advertising on line – Companies may advertise via online sites such as Linkedin, Indeed, Monster, Fish4jobs etc This has the benefit of advertising that your company is busy and hiring but can create a lot of administration.
Recruitment Agencies – You won’t have been in business long before the sales calls start. When choosing an agency, try and get a recommendation and check their credentials. Anyone can set an agency up with no qualifications or experience. If things like diversity and inclusion are important to your company make sure you ask about this.
Executive Search or Headhunters – This is usually used for senior or specialised roles due to the cost. Finding a firm that understands and challenges you is worth a lot. Meeting a few firms and interviewing them can be helpful.
Independent HR company or freelance individual – Many experienced HR professionals have strong recruitment experience gained from working in-house. A key component of recruitment is identifying the passive candidate. You pay a day rate for experienced professionals to find and speak to candidates for you.
They will often also manage the entire process for you, even if you work with an external recruiter. Always a cheaper option but requires an investment in developing knowledge and relationships so the right candidates are identified. Key factor here is that there is no placement fee so no pressure to put up salaries or package to enhance the fee.
What is the difference between Executive Search and Recruitment Agencies?
The aim of Recruitment Agencies is to fill a position with the best available person. Recruitment agencies source from a pool of candidates that are actively looking for a new challenge by advertising on various platforms. This leads to a group of candidates that are “self-selected” of which the selection was not pre-determined by the company.
The aim of Executive Search consultants is to locate and recruit the best person, regardless of whether he or she is already employed or seeking a new position.
This approach can broaden and deepen the talent pool available to a search firm’s clients and places the control of who should be part of this talent pool, squarely in the hands of the client company.
There may also be the use of specialised psychometric tools, resources and skills to enhance the selection process.
Executive Search and Recruitment Agencies tend to charge a percentage fee or a retainer.
The percentage fee is based on the starting salary of the candidate and is normally payable once the candidate starts work with you. This form of charging is most common and if you don’t find a suitable candidate, you don’t have to pay the agency anything.
However, fees can vary from 8-25% depending on the agency and the salary. If you choose a retainer fee, it is agreed at the outset; with a percentage being payable upfront and the remainder due when the candidate starts their employment.
If you are using an independent HR consultancy you won’t pay a placement fee. Just a day rate which almost always works out cheaper.
It is important for companies to understand and cultivate their ability to read market conditions, trends, movement and fluidity in order to develop and manage effective recruitment strategies. Needs changes as companies grow and it is important to regularly review this.