First, let me say that I am a frequent consumer of services from recruitment agencies. I run a fast growing business and without them, my job would be made far more difficult. I love them… but I hate them.
Other than getting five cold calls per day from different recruiters – which can be annoying, it is their pricing model that fills me with such disdain.
Fifteen/twenty years ago, recruitment agents worked for their money. They advertised for positions, collected and sorted cvs/resumes, and actually spoke with – mostly interviewing – the candidates before putting them forward to their clients. They had to advertise in expensive industry magazines such as Computing, Computer Weekly, Advertising Age, etc. The fees they charged could be justified because of the investment of time and money that they put into recruiting staff for their clients.
During the dot-com boom, everything accelerated. Their was a supply and demand issue and clients (myself included) could not get enough cvs/resumes to maintain staffing levels – let alone grow. There was no time for the recruitment agencies to fully interview as the candidate would be gone. We were at or near full employment during that time – both here in the UK and in the States.
The standard of service that recruitment agents offered dropped considerably during this time.. but the fees they charged did not. There wasn’t a lot of choice for the customer – we needed staff. And so we let them do it.
Furthermore, during this period, online recruitment sites / job boards such as Monster.com emerged. It meant that recruitment agents could advertise more cheaply and actually search for candidates with certain skills in a cv/resume database. Admittedly this was at a cost to them, but any cost savings compared with print/display advertising were never passed on to the client.
We are now in a different market once again. Depending on the industry, there are plenty of people looking for work. We are not in the dot com boom, we are in recession. Recruitment agencies rarely actually take out expensive print advertising. They use online resources almost exclusively now (all using the same ones). They might speak with a candidate before putting them forward – but they certainly do not interview them.
Despite all this, the billing model for agents hasn’t changed. They still expect anywhere from 20%-25% of the new hires salary (I have never really understood the logic why you should pay a higher percentage of a higher salary). But this is what bugs me about this industry – they have reduced their costs dramatically and are putting in decreasing levels of effort yet expect a premium price. I can’t think of any other industry where this has occurred.
So let me give you some advice. Stop paying the premium rate! Every recruiter will cut their fee – because they know that they will still make healthy margins at half the rate. They only ask for the higher rate because they always have. I have never come across a company that won’t do this – and you know, if they won’t – there’s another twenty recruiters who will be happy to take their place. So it is down to us – the customer to change this behaviour.. at least until the next boom and the feeding frenzy resumes.