Can You Afford not to Hire a Search Firm?

You have a variety of resources at your finger tips; your human resource department, internal recruiters, company website, internet job boards, internal referrals, and career fairs where you source candidates so why would you delegate this task to an outside recruiter?

There are many reasons companies rely on the expertise of a search firm; a small human resource department, too many jobs to fill, and the inability to find the right talent even at Fortune 500 companies.

Identifying and hiring qualified talent is a time consuming process and often very frustrating repeating itself over and over again. Between the company website and Internet job boards companies receive hundreds of resumes that require screening; many are unqualified or not serious job seekers. An experienced recruiter weeds out unqualified candidates and not only presents qualified candidates, but those that have a high degree of interest in working for your company.

Direct Recruiting
Experienced recruiters find the most desirable candidates; those that are passively looking, very happy in their current positions, and top performers, but are receptive to outstanding opportunities that will advance their career. These candidates are generally the top prospects and do not post their resumes on the Internet, therefore can only be identified by referrals or direct solicitation typically from recruiters.

The databases of recruiters are extensive and an excellent source for direct recruiting high potential candidates.

Cost Per Hire
Recruiters have established networks and methodologies to efficiently reach top talent and the cost is far less than those incurred by a company. Consider the costs associated with running ads, screening resumes, participating in career fairs, interviews, and starting over again when a candidate declines an offer.

Research indicates that the cost of new hires is at least 150 percent of the departed employee’s annual salary. Search firm fees are only a fraction of this. Also the longer positions remain open, other hidden costs such as overtime, lost productivity and lost opportunities occur without your knowledge.

Experience and Expertise
Recruiters will offer advice about salary, incentives and benefits required to attract top talent in the current job market. Experienced recruiters will take the time to meet with you and understand your organization, culture and job requirements so that they present candidates that are not only qualified, but are also a good fit for your company. They also understand a candidate’s hot buttons so that they can work with the hiring manager to draft an offer letter that will be accepted.

The recruiter is a valuable resource to every hiring manager and can bring a different perspective to the process. For example a job description that requires ten skills, but candidates the hiring manager is evaluating for interview only have six to eight of those skills. A recruiter can bring insight to this process by suggesting other attributes that are compensating skills that can overcome a lack of experience. Or even consider a less experienced candidate at a lower compensation range who has potential to grow into the position. In many cases, rigidity by the hiring manager causes the company to pass on talent that lands at a competitor who recognizes that talent and takes a long term perspective in hiring – “getting the right people on the bus”.

A recruiter has information about the candidate that may never be revealed to a hiring manager or other company employees during the hiring process. This is because candidates are often more candid with a recruiter and provide feedback that may be valuable to your hiring process. Recruiters also set compensation and job responsibility expectations for uninformed candidates. This creates reasonable expectations for the candidate and is helpful in the offer acceptance phase.

Finding a Search Firm and Partnering
Look for a local firm who has the reputation for excellent customer service, a track record for placing candidates who perform well, and obtain references of hiring managers and human resource professionals from their client companies. Definitely work with local firms so that you have the opportunity to meet face to face; just like a candidate’s presence, personality and body language are important in evaluating if you can work together. Also out of area firms may not have the ability to meet their candidates they send to you and this is usually a red flag. Work with firms who specialize in your industry and function you are trying to fill such as accounting, finance or information technology. Check the website and marketing materials of the firm you are considering hiring, remember performing due diligence of search firms is just as important as screening candidates.

After you have met and checked references, review their fee agreement or present your agency agreement to them for review. Discuss terms and conditions and execute an agreement that is acceptable to both parties.

Agree upon details of the process: primary interface at search firm and your company; resume review; evaluation and discussion; setting up interviews; feedback from hiring manager, company staff and candidate; selection criteria for finalists; formulation of an offer letter; presentation and acceptance; and background checks.

The search firm is an intermediary between your hiring manager and candidate acting as a buffer to salary negotiations and is in the best position to negotiate a win-win result. The recruiter can explain to the candidate the validity of using their current salary in setting an offer amount or why limitations exist with the offer due to a company’s salary constraints. An early salary review at six to nine months for a merit increase is frequently negotiated as part of an offer. In addition, in order to get total cash compensation up to a specific level a signing bonus or awarding incentives based on job achieving objectives is not unusual either.

Upon the selection of your first, second and third choices immediately contact the recruiter so that a written offer can be presented to your top choice as soon as possible. This should be done promptly because good candidates usually have multiple offers or may be put off and become disinterested if an offer is not timely. There is also a good possibility that the top one or two candidates will decline an offer for a number of reasons so be prepared to take additional action. Remember good candidates will be facing pressure from many sources; their significant other, current employer, other offers, other recruiters, mentors and peers so the sooner they receive and accept an offer the higher the probability these pressures will cease to exist. Counter offers from the current employer are always an issue and the recruiter will work with the candidate to ensure a signed offer letter is submitted to the company, the candidate verbally and in writing resigns, and constant contact is maintained with the candidate to ensure he/she has transitioned psychologically to joining your company. Consistent follow up with the candidate and hiring manager is essential for mutual satisfaction.

After you have established a strong working relationship with your recruiter those time consuming recruiting tasks will no longer cut into your productivity. Future searches will be more efficient with minimal orientation required. If your company is hiring the right people you can concentrate on your company’s priorities (training, motivation, retention and productivity), long term success.