Recruiting is a ton of work, and entrepreneurs and managers have scant time to focus on it. I’m not telling you anything you don’t already know, because anyone who’s ever tried to fill a position without help knows the mind-numbing frustration that is posting jobs on Craigslist and Monster (or in the newspaper).
Compounding the issue is the fact that finding talent - particularly in skilled professional profiles like sales, information technology, and finance - is becoming increasingly more difficult as demographics shift.
The statistics are frightening: Every 10 minutes, a baby boomer turns 60, and by 2011, more than 75 million of them will be eligible for retirement. By 2016, there is expected to be a shortfall of 3 million workers between the projected workforce and the number of jobs required to keep the economy moving. Even today, the U.S. Department of Labor’s Bureau of Statistics says the unemployment rate for workers with bachelor’s degrees or higher is hovering at 2 percent and is expected to decline.
Which is why the recruiting industry is a ninety billion dollar a year industry by some estimates. Recruiters - whether on your staff or with a 3rd party agency - make your life better by taking care of the sourcing, sorting, screening, and filtering that takes hundreds of resumes and boils them down to the three to five finalists needed to give you an appropriate level of choice. They know who’s available, and what each candidate’s hot-button needs are. The best recruiters out there can act as human capital advisors for your firm, counselling you on issues like compensation and even going so far as to develop the Job Profile on your behalf.
Recruiters aren’t cheap - it’s not uncommon for retained executive recruiters to charge as much as 40% of the new employees’ total first year compensation as a fee. The vast majority of agencies work on what’s called a contingency basis, meaning that they only get paid when you make a hire, charging an average of 20-25%. So, for a $100,000 position you’re looking at a fee of $20,000 - $30,000. Ouch.
With the proliferation of job boards and the advent of new technologies like social networking sites (think
Facebook and
LinkedIn), the sourcing stage of the recruiting process is become much easier. Firms are emerging that specialize in this new “throughput” model of recruiting, where they take care of sourcing and screening and let you take it from the interview stage forward. I started a company in 2004 called
illuma that does this exact thing. And at prices in the $1750 - 3950 range, it’s a compelling alternative to a traditional full-fee search firm.
When you’re ready to begin searching for candidates, it behooves you to check out the recruiting service options that are out there - and there are hundreds of options. For companies that hire 5 or more people a month, you might want to look at outsourcing all or part of your recruiting process to gain efficiencies. The vendors in this category are known as Recruitment Process Outsourcing (”RPO“) firms, and are a best fit for companies with 50 or more employees.
Regardless of your size and need, the use of recruiters will greatly accelerate your search process and get you to a final candidate slate 50% faster than if you attempted to do it on your own. Their access to tools and resources that, as a business manager, you simply don’t have time to deal with, makes them a valuable partner to have on call.
Much has been written about the death of the search industry, but the fact remains that recruiters still matter. Before you write them off as “too expensive,” consider the saved time, the increase in candidate flow, and the peace of mind factor.
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[...] Why Recruiters Still Matter [...]
September 2nd, 2008 at