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Working with Recruiting Companies

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January 14, 2020Recruiting

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Recruitment is the process by which companies attract, screen, interview and hire new employees for a position. While the rise of online job boards has changed the recruiting process -- making it easier for companies to do some things themselves -- there are still roles that require a more hands-on touch.

From filling highly-specialized roles to hiring many new employees back-to-back, your company may not have the time or network to find the right candidates. You may want to reach passive candidates who aren’t currently browsing job boards at all.

That’s where recruiting companies come in. You can hire an outside company to recruit for a specific role or to handle all of your new hirings. But what do recruiting companies actually do, and what are the pros and cons of working with them?

Types of Recruiting Companies

There are several different types of recruiting companies out there, so let’s start off by getting clear on our definitions.

First, is there a difference between the terms of recruitment and talent acquisition? There is, although the two terms are related.

Essentially, it’s the difference between short-term and long-term planning. Recruitment is focused on filling the role that’s immediately in front of you, while talent acquisition refers to having a big-picture strategy focusing on your overall HR needs.

You should have a talent acquisition strategy, especially if you have highly-specialized roles opening up (which can take months to fill) or experience faster than usual growth.

Now, what types of recruiters are you likely to encounter?

Agency recruiters

Agency or contract recruiters are the most flexible kind of recruiter. They’re sometimes referred to as temp agencies, staffing agencies or recruiting agencies. Their job is to fill positions as quickly as possible for a large number of clients in a variety of industries.

Think of them as one step up from a job board. They aren’t great for talent acquisition, but they can fill short-term or seasonal roles more quickly than you can independently. In many cases, they’ll have a pool of candidates who have already been interviewed and vetted, so they can send someone to fill your position the very next day.

They typically handle payroll and insurance as well, acting as the contract worker’s legal employer. The catch is that you’ll pay a markup on top of your employee’s hourly wage.

Contingency recruiters

The next type of recruiter is a contingency recruiter. These recruiters can help you find more highly-skilled candidates, but they only get paid if they’re successful.

This means they have an incentive to work quickly because there’s nothing stopping you from using multiple recruiters or hiring someone from a job board instead.

While they can take a lot of the busywork out of the hiring process -- from scheduling interviews to negotiating with the candidate -- they aren’t likely to spend much time on the bigger picture, so are less useful for developing a talent acquisition strategy.

Still, contingency recruiters are more specialized than agency recruiters. You can expect to pay them the equivalent of 20-30% of your candidate’s starting salary as a fee.

Recruitment firms

Recruitment firms are best suited for talent acquisition and hiring for highly-skilled roles. They’re referred to as retained recruiters because they’re paid a retainer, which may be a flat fee or a percentage of the new hire’s salary.

Because they’re paid regardless of how quickly they place a candidate, they can spend more time getting to understand your business and finding the right fit for a position.

Recruiting firms have a database of candidates they can draw from, as well as experts in your industry to screen them and vet them.

They may use a variety of strategies to find candidates, including seeking out passive candidates who are already employed but open to receive new offers.

Internal or on-demand recruiter

Finally, if you want to be more directly involved in the recruiting process yourself, you have the option of hiring an internal or on-demand recruiter.

An internal recruiter is usually a full-time, salaried employee who is hired to manage your recruiting process in-house.

An on-demand recruiter is an individual or agency to whom you can outsource your recruiting tasks on a contract or hourly basis.

These options are best for when you plan to focus on employee referrals, or when you have a very specific company culture and want your recruiter to have an insider’s perspective on what to look out for in a candidate.

How Do Recruiting Companies Help You Hire?

We’ve looked at some of the differences between each type of recruiter , but what specifically do recruiting companies do? Which tasks can you expect them to take care of for you, and what will you still have to do yourself?

Tailor your job description

First, a good recruiter will know exactly how to market your job to the right candidates. If you’ve been having trouble attracting qualified applicants, then you may be posting your job ads in the wrong place or failing to properly communicate your expectations.

From writing a good job description, to ensure that your salary and benefits are in line with industry standards, your recruiter will help you craft an effective job listing.

Publicize the position

Next, your recruiter will get your job listing in front of the right candidates. Depending on the position, they may advertise it on Internet job boards, distribute it via email lists and social media, or run it through their own internal networks.

Specialized recruitment companies may even have their own proprietary algorithms designed to narrow down the candidate pool and match jobs to candidates.

They can get your job in front of passive candidates who are already in their database, and individuals reach out to selected candidates to invite them to apply.

They may also try to sell the candidate on the role, and persuade them why they should consider leaving their current job to apply for this position.

Pre-screen and vet candidates

One of the key roles of a recruiter is to pre-screen candidates and reduce the number of underqualified applications that come across your desk.

For some roles, you may have a hard time finding qualified applicants, while for others, you may get more inquiries than you can realistically handle on your own.

Your recruiter can sort through resumes for you, filtering out those that don’t meet your requirements and politely turning them down. Then, they can follow up with promising applicants for a pre-screening or telephone interview.

While this doesn’t replace the need for an in-person interview for a full-time position, it can be sufficient for a temporary or seasonal job opening. Depending on the job, they may also run a background check or drug test at this point or at a later stage.

Present a shortlist for interviews

If you’ll be interviewing candidates yourself, then a recruiter will present you with a list of applicants for you to choose from. They’ll narrow it down to just a handful of candidates so you don’t have to spend more time on the interview process than you need to.

Then, they’ll schedule an interview, and handle any communications with the candidate before and after. This includes offering them the position, letting them know that you’ve found someone else to fill the role, or arranging for any additional interviews.

You may be tempted to make the job offer to them yourself, but it’s a good idea to have the recruiter do it if they’ve been the one communicating with the candidate.

Assist with negotiations and onboarding

Finally, the recruiter should be involved throughout the negotiation process. Remember, this isn’t a done deal, and if you’re recruiting a passive candidate, you may have to keep the negotiation confidential while they decide whether to leave their current position.

Your recruiter can streamline that process and smooth over any issues that come up. A good recruiter will even help with the onboarding process, handing them over to the HR team and checking in with them after their first day to see how things are going.

The Disadvantages of Working With Recruiting Companies

We’ve looked at some of the pros and cons of working with different types of recruiting companies already, so now let’s take a closer look at some potential downsides.

The cost

First, there’s no arguing that using an outside recruiter can come with a hefty price tag. A contingency recruiter and recruiting company can cost you as much as a third of your new hire’s salary, while a staffing agency will mark up your employee’s hourly wage.

That said, doing your own recruiting isn’t cost-free either. Even if you don’t pay anyone an additional fee to handle your recruitment tasks, you’ll be spending time and energy that you could be putting toward other parts of your business.

Mis-matched incentives

This disadvantage applies mostly to contingency agencies, who only get paid a fee if they successfully place a candidate. This means their incentives may be at odds with what’s best for your company.

For example, a shady recruiter could save their top-tier candidates for companies who pay a higher fee, giving you their second-best candidates.

Also, since they aren’t on a retained fee, there’s no guarantee they’ll come through with a qualified candidate at all. If so, you won’t be out any money, but you’ll have wasted valuable time that hasn’t gotten you any further along in the process.

A rushed fit

Another disadvantage to using a recruiter is that they don’t know your company as well as you do, and may recommend candidates who aren’t the right cultural fit. This is less of a risk if you use a recruitment company or internal recruiter who develops a relationship with your company, but it’s still a possibility in any recruitment process.

Since the process is being mediated through a third party, you’ll have fewer opportunities to interact with your candidate directly, and less control over how things play out.

Still, if you can avoid these pitfalls of using a recruiter, then they can provide invaluable expertise and time-saving techniques to streamline your hiring process.

Enter Hunt Club

Hunt Club offers three different levels of service to address some of the challenges that you might face when working with a traditional recruiter. First, you can use the Pipeline Search service to scale your team and add dozens or hundreds of new hires at once.

This helps you build your pipeline in advance so that you know exactly what you’re looking for, and aren’t caught off-guard when it comes time to grow your team.

Second, you can use the Executive Search service to find top talent recommended by leaders in your field. Hunt Club uses proprietary technology and referrals from industry leaders to find the right fit every time - with the majority of the fee paid upon delivery.

Finally, you can use Hunt Club’s Alliance Search service to prioritize internal hiring and referral recruiting, helping you find the best cultural fit for every role.

With a network of over 10,000 experts and five million passive candidates, Hunt Club uses the latest hybrid recruiting techniques to give you the widest reach possible. Fill out our contact form to get started with HuntClub today!

Veronica Feldmeier avatarVeronica Feldmeier