C%
of new hires come as the result of a referral.
%
come from a listing service.
%
come from recruiters.
How, then, are HR departments still relying on recruiters to locate their next big hire?
In-house recruiters vs contract recruiters
The biggest problem with contract recruiters is that the very model of being paid when positions are filled completely negates the incentive to fill positions with the right people. This doesn’t leave any incentive for the recruiter to focus on matching the right personality, company culture, and motivational queues to the job. They get paid whether the candidate works out or not, as long as they fit the job description.
Just so I’m clear, I’m not talking about an in-house recruiter or headhunter that your company has retained for your company exclusively. In fact, I encourage having someone with this sort of specialized talent to take some of the pressure off of the HR department. I’m talking about contract recruiters who are paid when job positions are filled.
Here’s how this payment structure can backfire.
Reputation of cutting corners
Now I don’t go to every used-car-salesman with the bias that they are trying to rip me off, nor do I approach every lawyer with the pre-determination that they are trying to swoon me with fancy legal fine print. But I do agree that there must have been enough of the “bad ones” to constitute a well-known stereotype for the professions.
Clearly, people still get paid to recruit candidates for companies, so someone has to be doing it right somewhere. But the good ones are few and far between.
Whenever you have to adopt the hustle mentality (because recruiting definitely is a hustle), quality is sure to suffer. If I get paid the same for apples whether they are rotten or ripe, you can’t blame me for finding ways to sell more apples and ignore quality assurance. Profit above all, right? Well, when you hire a recruiter who isn’t bound exclusively to your company, there is nothing stopping them from shopping the same written resume that you receive to every one of your competitors.
This is bad for a slew of reasons. The perfect candidate who interviews for your position may get a call with a higher offer, putting their loyalty to the test within the first year of hire.
Also, it’s a known fact that most resumes that come from a recruiter are edited. But are they edited to simply remove identifying contact information, or to apply a more fitting set of skills? Imagine investing time and money into a decision to hire, only to find out that the hire doesn’t have the experience you based your decision on!
At the end of the day, you paid them to recruit candidates to fill a hire, not to assure that hire was the absolute best the market had to offer.
A questionable way to recruit candidates
High skill positions differ completely from minimum wage jobs – not just the job description, but the type of person who can effectively fit that job. Because of a low barrier to entry in the recruiter industry, some recruiters literally just call candidates asking for their resume so they can represent them in a job search. While this may work fine for lower-wage positions, highly specialized job candidates are not looking for recruiters to act as a middle-man to finding new contracts or jobs. In short, the pool of candidates from a recruiters network tends to be sub-par for highly skilled positions.
Also, commission scales may differ depending on the recruiter or firm you hire, but an average commission is 25% of the salary of a position filled. That’s a bit over 20K for a position filled with an annual salary of 90k. That’s no small chunk of change. So, you need to either add up that extra 20k as the cost of hire, or only offer the candidate 70k for the same position. This will inevitably lead to problems if you aim to have that employee for the long run.
Lost opportunity when a hire doesn’t work
Rarely will you hear from a recruiter about a position after it’s been filled. They don’t follow-up in 6 weeks, they don’t provide ongoing training. Paying a firm to a recruit candidate is usually a once-and-done transaction.
You also don’t get a refund if a new hire doesn’t work out. Additionally, you have to factor in the recruiter’s fee and the money you invested in salary and training as a waste, and you have to invest more time and money into hiring someone new. Even if you don’t use a recruiter again, those expenses can sure add up!
At the end of the day, you hired a recruiter because you thought it would increase the chances of finding your next rockstar, while freeing up your time for better things.
So, if a recruiter will only cost you money and doesn’t guarantee a quality hire – what’s the point?
How to get around recruiters with pre-employment testing
Recruiters aren’t the only way to recruit candidates that fit your company culture and have the required skills. Many organizations have seen an increase in hiring effectiveness through pre-employment testing and other recruitment techniques. Good pre-employment testing will eliminate guesswork and ensure you find the right fit for the job the first time.
Our pre-employment testing can be customized to fit the needs of your company’s interviewing process, so the competence of your applicants can be verified without generic responses. You can test everything from character and personality to the specific needs of your industry.
When considering the effectiveness of pre-employment testing, the added efficiency of quality hires will result in long-term savings.
Have you had a good or bad experience with recruiters? Leave a comment below and tell me about it.
Call me if you have any questions about best practices for recruiting.