DavidNesbitt

Recruitment fees are always a hot topic! No matter how much you charge, it’s always too much - no matter whether you are a search business working at 33 1/3 or at less than 10% working in the high street.

Now I have been in this great industry for 13.5 years and the market is a lot more price sensitive now than it was pre-recession.  Whether we like it or not, margins are under pressure. Many of the larger companies are now doing more recruitment themselves and using the candidate sourcing tools that are now available through the advent of social media.

Another squeeze on margins has been RPO (Recruitment Process Outsourcing) and managed services, which are based on high volume at low margins. These are all procurement led initiatives where cost is key. My opinion on these RPO models through my experience working through RPOs is that the service levels offered drop. The fees are so low that how can you really justify any recruiter spending significant time adding value to a recruitment campaign.  It is basic economics that if the margins are very low then how can the recruiters really put in any other value adding work?

Bill Boorman of Bill Boorman Consultancy recently wrote a very interesting article about this subject in The Recruiter. He feels that to benefit the company, the candidate and the recruiter we should look at a different fee model. He feels that the future of the recruiter and fees should be based more around the retention of a candidate and not just about candidate placement. He feels that the placement fee should be lower and the recruiter then gets a fee for the career lifetime at that organisation (including any pay rises). This is a very interesting concept. It would certainly remove all those unscrupulous quick buck fees – where a candidate is with a company for a very short period of time and then leaves. He concludes that this would make the Recruiters more “Career Consultants” and would allow them to get back to being consultants rather than people introducers. A very interesting idea? Would it work right now? Is it a step too far? I would be interested to hear from other recruiters and hiring managers on this concept. Would this work for your business?

Source: www.recruiter.co.uk February 2012 edition article is “Time to Reward Retention over introduction” by Bill Boorman of the Bill Boorman Consultancy.