Model of cooperation with the employment agency

In every company comes such a time that the business begins to operate more and more efficiently. Additional hands are needed to work on the execution of orders. And fast!

In such a situation, the company must take the time to gather details of the applicant’s responsibilities. Its required qualifications, skills and soft skills. In IT, it will most often be the definition of experience, knowledge of language or frameworks, as well as the roles that the employee is ultimately intended to perform in the company and team. We also need to count well what our budget is for hiring a new employee and how much we will lose by delaying another month or two. Let’s also remember about the alternative costs, that is, how much the company could gain if a person joined the company at a certain point in time.

Typical recruitment process

Once we know clearly who we are looking for and are ready to carry out the recruitment process, we need to start working. At the beginning you have to decide who should take care of it. This decision is only obvious in theory.

In a company with one or two hr departments, both this task and the previous one will be handled by this department. Unfortunately, this will come at the expense of daily duties such as taking care of employer branding, preparing contracts, developing internal communication or obligations related to hard HR.

In companies without HR, most often the CEO himself will waste days searching the endless internet while neglecting to build his business from the sales side.

It is impossible to do everything at once, and very often a monthly delay in hiring a candidate generates large losses, especially for companies offering to widely understood consulting. A month’s delay may mean that there will be nothing from a long-term contract. To make matters worse, the company may be subject to contractual penalties in this case.

There is an easy way to cope with the surge in demand for new employees – hiring a specialization agency to help you. The question is, how much does it cost and which model of cooperation with the agency will be the best?

Cooperation between the client and the employment agency in Poland is most often carried out in the success fee model. In this billing model, the customer only incurs costs if the candidate is hiring. This remuneration is usually defined as a percentage of the salary of the candidate employed. Most often, this will be a percentage between 15% and 30% of the candidate’s annual salary paid only at the time of the candidate’s employment. In addition, there are quite a few employment agencies on the market, so we can outsource the search to them all and have practically a guarantee of finding a candidate. Does this – it would seem – ideal model have any drawbacks? It turns out that he has quite a lot of them.

Success Fee

This payment model assumes that the client incurs high costs at the time of hiring the recommended candidate, but most often does not bear any at the time of the recruitment process.

A recruitment agency is a business like any other. A business that needs to make money from its livelihood and growth. For this reason, success fee agencies offer their services to the broad market and take virtually every order to execute. The agency earns only when a referred candidate is hiring, which means that the more orders the agency accepts, the greater the chance that one of the ten or twenty clients served at the same time will be able to recommend someone. Spending time on difficult processes most often decreases over time, which is easy to observe in communication with the selected agency. Of course, there are exceptions that keep pace throughout the recruitment process, but this is not the standard.

Unfortunately, in this case it is completely natural. When working on a success fee, the agency has to balance risk quite strongly by focusing on those processes that have the best chance of implementation.

Advantages and disadvantages of success fee

A big advantage of this model seems to be the fact that starting work with another agency costs nothing. Nothing but time spent on the implementation of the next agency, handling its commands, preparing and analyzing subsequent contracts and checking in the database of the same candidates.

Unfortunately, working with multiple agencies at once can effectively reduce productivity. Sometimes it can also lead to a conflict of interest. The worst thing that can happen is to pay double salaries for candidates who have been mistakenly confirmed as candidates recommended by two different agencies. In this model, the agencies bear very high operating costs, which will certainly be covered in a conflict situation.

It may be tempting in this model to try to order agency offers below market standards. Finding a candidate for half free will generate huge savings over the years. However, if no one can be found, then only then will the offer change.

My private experience as a programmer shows that such actions are completely ineffective from the perspective of candidates. Fruity Thursdays have long since owed 20% of the salary cut. The person who gets such an offer will certainly not be willing to talk about the next offer. The agency and the company that commissioned the recruitment will suffer.

Our personal experience has been translated into work in the agency and we always confront the offer with the realities of the market. Sometimes it is possible to emphasize the advantages of the customer’s offer at the expense of a lower hourly rate, but if the offer is detached from reality, we immediately communicate it to our customers and present our proposal based on market data.

Similarly tempting, but more loss-making than beneficial, it may be to outsource and cancel processes shortly after they start. In this situation, the agency has probably already contacted dozens of candidates presenting the company’s offer. Some candidates may even devote their valuable time and take part in the next stages of recruitment only to get information after the engagement that „the company for unknown reasons has stopped recruitment”.

Not only does the image of the agency suffer greatly from such actions, but also the employer branding of the client decreases. the level of perception of the company as an attractive employer. Experienced recruiters will cope with providing negative information to the candidate and alleviating such a situation, but sometimes the echo of such operations appears on groups of online forums or social media portals, which significantly reduces the future interest in job offers of both the agency and the client and sometimes echoes widely in the local market.

In addition, given the fact that we often look for more than one candidate, hiring three in one month can prove very costly for the client and even result in the rejection of a candidate who fits the role perfectly. We are always looking for the best solution for both sides. Unfortunately, this is not the industry standard.

Subscription

In companies with small HR departments, the demand for new employees is usually temporary rather than continuous. In such a situation, there is no need to extend the internal HR department to additional persons only to carry out several recruitment processes once or twice a year.

The subscription cooperation model solves this problem. It consists in the periodic extension of its HR department and the use of knowledge, working time, and the candidate database of a specialized employment agency. In addition, it gives you the opportunity to verify the requirements for the candidate or the proposed terms of cooperation even before they see the light of day. Even hiring an agency for a few hours just for consultations can save you time lost on an unsuitable recruitment process.

Hiring agency time also solves the basic problem of engagement and a good understanding by the agency of the client’s needs. In this case, the agency recruiter may be involved from the beginning in the process of creating the desired profile. It can also assist the client with its tools useful in preparing job descriptions. It will help in preparing the candidate person or communication plan, which the client will later be able to use in internal processes. In addition, the customer’s HR department may be involved in verifying matching candidates from the outset. This allows both parties to understand each other better and adapt more quickly to the requirements of the candidates available on the market.

The guaranteed working time of the agency allows you to focus 100% on the commissioned recruitment process. In another model of cooperation, the same process could be considered risky and treated superficially for the same period. Every next candidate at this time, it’s pure saving.

It is also important to be able to easily predict the costs of cooperation. The subscription model is usually a fixed low subscription fee covering the agency’s operating costs and low success fee, which is the actual profit of the agency invested in further development of the competences of its staff and new tools used in daily work.

Thanks to close cooperation, it is possible to conduct all candidates through structured interviews, which further reduces the costs of implementation of the process. In particular, hidden costs, e.g. staff turnover costs.

Is the subscription model for everyone?

Probably not. Success fee will be better for us if we know exactly who we are looking for and how to design the recruitment process and the role we are looking for is reasonably available on the labour market. In any other case, however, the subscription model will allow the agency to spread its wings, as well as carry out the recruitment process much better and more effectively.

In our experience, sometimes hiring one candidate requires technical verification of 30 candidates, and soft verification requires 50. In this case, we searched up to 600 profiles per hired candidate found in about 10 sources, from which we obtain contacts to potential candidates. Difficult profiles require a lot of commitment.

In this model, it is very important to trust the agency, which we will commission recruitment processes in this model. We need to make sure that the agency with which we want to undertake such cooperation is legal – such a company must have an entry in the National Register of Employment Agencies. The KRAZ number should be easily accessible even on the agency’s website.

Experience in the industry is very important for such cooperation. In the case of the IT market, the agency needs to specialise in it in order to operate effectively. Understanding the candidates and how the whole market works is crucial here. If the agency is looking for candidates for both vegetable wholesalers and data warehouses at the same time, it may not represent the customer effectively on the latter front. Even large employment agencies establish separate brands, under which they operate only in the IT industry.

Which model to choose?

Here I presented two of the most popular models of cooperation with recruitment agencies on the Polish market. None of them, however, is universal. We should always count well how much it will cost us not to hiring a given role and whether we have time to coordinate the work of several recruitment agencies instead of focusing on properly recruiting candidates. In practice, all good agencies use similar sources and methods of recruiting candidates. Most often, therefore, the key to success is to focus on a given role and consistently search all available sources. This unfortunately takes time and commitment. One thing is for sure, we will probably lose more without hiring a candidate than asking for help from a professional employment agency.