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Are recruitment agencies worth it?

The role of agencies in the age of social media

By Brian Kreissl

As mentioned in several earlier posts, my first HR-related role was as an agency recruiter. From there I moved into an in-house corporate recruitment position with a large financial institution.

Because I’ve done agency and in-house recruitment, I can understand both perspectives. As mentioned, I believe many HR recruiters tend to nitpick and focus a little too much on soft skills and cultural fit, while agency recruiters sometimes fail to adequately take those factors into consideration and focus a little too much on “selling” candidates to their clients.

No doubt agencies can be expensive — sometimes charging a fee of up to 25 per cent of a candidate's annual salary — but the life of an agency recruiter isn't always easy, especially when doing contingency searches.

Unlike a retained search, recruiters who work on a contingency basis only get paid if and when they make a placement with one of their clients. In a sense, retained search firms become the de facto HR department for a specific vacancy and are contractually responsible for filling the job.

But on the contingency side, it isn’t unusual for companies to farm out recruitment for a specific vacancy to five or 10 external firms while also having their own internal HR team working on filling the position. And sometimes a hiring manager will contact an agency about a vacancy without even informing their in-house recruitment team, who are also working on it.

Problems can arise where a candidate has applied to the organization directly while also applying for the vacancy through an agency. In such cases, most companies will refuse to consider the candidate, especially if she applied directly for the position before being put forward by the agency.

Agencies should never send a candidate’s resumé to an organization without that person’s permission, and it is vitally important to ask the candidate outright if they have recently applied to that company directly. Yet candidates do sometimes lie and are often under the mistaken belief they will have a better chance of landing the job if they apply through multiple channels.

Because of the focus on cost containment, all else being equal, there’s no surprise most companies today would prefer to hire an internally sourced candidate if at all possible. However, I believe there are situations where agencies can be worth every penny.

Different agency specialties

First of all, few agencies believe their role is to fill each and every vacancy for their clients. In other words, a large organization with a dedicated recruitment team probably shouldn’t be using agencies to fill many of their most straightforward permanent vacancies.

For example, a bank is probably going to want to fill most teller positions through in-house recruiters.

Agencies generally concentrate on hard to fill vacancies or those that require specialized recruitment expertise, for example, with respect to technical or executive positions. And if a company is reluctant to direct source (“headhunt”) from a competitor, they will often do so through a search firm.

Some agencies specialize in staffing short-term vacancies with little or no notice. Such temporary agencies generally have a pool of workers screened and ready to fill junior level administrative, general labour, technical and executive positions on a short-term basis.

Another benefit of using temporary agency help is that workers don’t need to be set up on the company’s payroll.

The role of agencies in the age of social media

We all know social media has revolutionized recruitment. But what is the role of agencies in the age of social media?

To me, all recruiters, whether agency or in-house, should embrace social media for several reasons. For one thing, it makes direct sourcing candidates a whole lot easier and less stressful and intrusive.

Social media also makes the recruitment process more transparent, facilitates relationship building with candidates and provides a vehicle for providing a realistic job preview. But if social media isn’t working and a job needs filled urgently it might be time to try a recruitment agency.

However, I wouldn’t necessarily hold it against the agency if they found the candidate using social media. Employers don’t “own” LinkedIn or Facebook, and others might have better luck using the same channels.

Part of an agency’s value proposition is its database of candidates and their relationships with those candidates. Technology such as social media only facilitates contact and cannot replace the human element in networking and building relationships.

Brian Kreissl is the product development manager for Carswell's human resources, OH&S, payroll and records retention products and solutions. He can be reached at brian.kreissl@thomsonreuters.com. For more information on Carswell's HR products visit www.carswell.com.  

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Brian Kreissl

Brian Kreissl is the product development manager for Carswell's human resources, OH&S, payroll and records retention products and solutions.
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