How Can Recruiters Justify Charging Such Ridiculous Fees?

People don’t like recruitment consultants – fact. They wonder how recruiters can justify charging such ridiculous fees! There are a few possible reasons for this:

• The reputation of the recruitment industry is marred by rogue recruiters who are purely motivated by their own financial gains
• Many people don’t understand what a recruitment consultant is or what they actually do to earn their fees

Let’s attempt to try and demystify the cloak-and-dagger image of this industry and explain the necessary steps involved in finding a business their perfect candidate.

How Do Recruitment Fees and Recruitment Agencies Work?

Firstly, let’s consider how most people think the recruitment process works…

• Post an advert on a job board
• CVs flood in by email overnight
• The hiring manager decides on a shortlist
• Telephone interviews take place
• Shortlist is whittled down to maybe the top three or four candidates
• Face to face interviews happen
• The hiring manager decides who will be the best person to do the job
• An offer is made to the candidate
• The candidate accepts the offer, signs the contract and starts one month later

Happy days all around!

If that’s what actually happened, recruitment consultants wouldn’t exist because there would be no need for them.

VS how recruitment actually works in reality…

Most hiring managers will attempt the first two steps outlined above without achieving the expected results. They may even repeat the process before realising that recruitment requires more time and skill than they have available.

So, they reluctantly seek to enlist the help of a professional. They have a productive call, where the consultant takes the time to understand the vacancy and needs of the business. The hiring manager still may not appreciate that the expert knowledge of the field we operate within is something that only comes with years of experience.

So what do you actually get for such ridiculous fees?

Understanding Client Needs & Market Positioning

Once terms have been agreed, it takes time to fully understand what kind of person a client is looking for. This includes the job they will be doing, the skills required, the company culture and their plans for the future. It may involve visits to the premises and extensive market research. Once this information is gathered, a targeted advert can be written.

Job Board Advertising & CV Databases

Not all job boards are the same. Each has its own specialist niche and appeals to candidates from different backgrounds, at different stages of their career. With no knowledge of how they work, a hiring manager would probably pick whichever offers the best deal. Subscribing to several specialist job boards with access to CV databases costs thousands of pounds per month.

Headhunting

The best candidates don’t apply for jobs, they wait to be headhunted. It takes a skilled recruiter with expert knowledge of the jobs market to find a client’s ideal candidate. Although finding them is the relatively easy part, a recruiter then has to use their rapport building skills.

Engaging with non-active job hunters takes time, resource and perseverance. For a consultant to communicate the benefits of an opportunity, the candidate needs to trust them enough to engage. Actually connecting with a candidate in order to have this conversation, isn’t easy. When hundreds of recruiters are trying to do the same, this requires the technique, skill and patience of a professional.

Candidate Relationship Management

Trust is as much an issue for candidates as it is for clients. A good candidate can receive up to fifty calls per day once their CV is live on a job board. This constant pestering turns candidates off big time!

Consider how much faith someone needs to have before they can put their career in the hands of a consultant. They need to be confident that whoever they entrust has their best interests at heart. They must be relied upon to take actions on a candidate’s behalf that will move them closer to achieving their ultimate career goals.

Expert Knowledge & Negotiation Skills

A good recruitment consultant is trained to ask probing questions that most people may not be comfortable with. It’s only through asking these difficult questions that a recruitment consultant can properly establish what is important to their candidates. Not just to fulfil their immediate needs but their ambitions for the future. A skilled recruiter will make a candidate feel at ease enough to open up so that in-depth conversations flow effortlessly.

Shared Financial Risk

Even once a CV is submitted to a client and both sides agree they are a good match, the job is far from done.

• The candidate may have doubts
• Their spouse may not agree with their decision
• Their employer may make them a counteroffer
• Another recruiter may swoop in at the last moment with a more appealing offer

The relationship needs to be managed very carefully until a candidate is fully settled in their new role. If for whatever reason, things don’t work out, most reputable recruitment consultants will offer a partial refund of their fee. Of course, this is a rare situation for good consultants, who will make every endeavour to avoid this.

The entire recruitment process can take up to three months, sometimes even longer. It doesn’t make good business sense for a recruitment consultant to risk doing all that work without a fee. Not to mention the damage it would do to their reputation as a business if things went so badly wrong.

A Few Final Thoughts on the Ridiculous Fees Recruiters Charge

There are recruiters out there who try their luck when first starting out. Often, those with more cheek than experience believe that the way to do business is to ask for ridiculous recruitment rates at the outset. Their expectation is that there will be some negotiation. After this, the hefty percentage originally quoted to the client will be reduced to a more reasonable one.

Of course, reputable recruiters understand that demanding ridiculous fees with very little experience is not a good way to do business. Those who respect their clients will therefore only quote reasonable rates from the outset.

Hopefully, now you understand a bit more about the recruitment hiring process and placement fees. Do you still wonder how can recruiters justify charging such ridiculous agency fees? Or, now that you’re a little more aware of what the job entails, do you consider recruitment consultant fees to be at all ridiculous? We would love to know your thoughts.

If there is anything you are unsure of or any further questions you have, please don’t hesitate to contact us.