What’s a Reasonable Recruitment Fee?

When working with a Recruitment Agency what is a reasonable fee? The first thing that comes to mind may be a low number. And who’d blame you? Why would you want to pay more when you can get something cheaper? That is especially true whilst the economy is struggling.

There are many recruitment companies struggling for business and offering generously discounted rates. If you’re getting phone calls from desperate agencies offering cheap rates without even putting up a fight who’d blame you for engaging with them. Contingency Recruitment, the type of recruitment where you only pay after you’ve hired someone from them, is most common. So what’s the risk?

Why Pay More?

Your logic may be to argue, what is the difference between a cheap agency and a more expensive one? If you use enough agencies then surely one of them will find the calibre of candidates you want, right? Even if they are all rubbish then just by the law of averages, you’ll get what you want.

However, consider this

When you pay for a product or service what is it you want for your money?

You’ll want what you buy to work. You’re not going to buy a car that doesn’t start, are you?

You’ll want to get a return on your investment. If you buy a kettle, you’d be disappointed if the element broke after a couple of months.

You’ll want security if anything does go wrong. If you paid for insurance and it didn’t pay out when you claimed for something it should cover for, then you’d be annoyed.

So, what are you expecting to happen when you use a cheap agency? What part of that service are you missing out on? After all, why are they cheaper? Why are they so desperate for your business? Surely, there is a hint somewhere in there, right?

Value for Money

In business the word cost is banded around like it’s going out of fashion. And it’s so popular because it can be measured. But what is much more difficult to measure is Value.

But I look for value. Value is what I get for my money. If I pay a little extra how much extra do I get?

In recruitment terms if the candidate doesn’t work out that value is the difference between a quick and easy replacement and a long drawn out stressful nightmare. That value is the difference between a star candidate who actually wants the job and one who is just a time waster. This is something that a CV or a bit of paper won’t tell you. And that value is a candidate who adds long term benefit to the role and the business as opposed to someone who will cut corners and slack off.

What is a Reasonable Recruitment Fee then?

It depends on the industry. And I cannot talk for other sectors than what we are involved in.

20% for Engineering, IT and Science means a full quality service for your recruitment fee. It gives us the time to do the job properly.

The difference between doing a £30,000 job at 20% and 15% is £1500. Is that big money or a small price to pay for all the benefits?

If the candidate doesn’t work out, you’ll be dealing with an agency that’ll get you a quality replacement efficiently. The candidate probably will work out as they will have been comprehensively vetted anyway lessoning that risk in the first place. When they do turn up to start, they’ll be skill wise and motivationally a match too. That means initiative, effort, drive and good decisions come within the package.

You’re not just paying for a candidate; you’re paying for a service. Think Value, not cost.

What’s a Reasonable Recruitment Fee?