In This Market... Why Use a Recruiter???

By Harry Urschel

Why use a recruiter when I'm getting piles of resumes from my ads?

In times of economic downturns companies often decide that one way to "save" money is by eliminating fees to recruiters when looking for new employees. Why shouldn't they? After all, they post an ad online, or in the paper, and there's a much larger stream of applicants than they've had in the past. "Why pay a 20% to 30% fee when I seem to be able to get plenty of people on my own?" Good question.

The answer is two-fold... what is your true cost-to-hire? and does that pile have the best candidate?

Most small companies have never examined what it truly costs them to hire a new employee. There are a great number of factors to consider, including...

Direct Costs:
  • How much do the ads cost?
  • How much time does it take at your "hourly rate" to:
    • Write an ad
    • List the ad
  • Field x number of phone calls from the ad at 2 to 10 minutes each
  • Initially review x number of resumes at 30 seconds to 2 minutes each (x= 20? 50? 100? 500?... One janitorial position in Chicago recently got 700 applicants)
  • 2nd review x number of resumes to confirm who to screen at 2 to 5 minutes each
  • Prep time for phone screens
  • Phone screen x number of candidates at 15 to 30 minutes each
  • Prep time for interviews
  • Conduct first interviews with x number of candidates at 1 hour each
  • Debrief with others in the organization that also interviewed the candidates
  • Conduct 2nd interviews with x number of candidates at 1 hour each
  • Debrief with others
  • Prep time for reference checks
  • Complete reference checks at 15 to 30 minutes each (Repeat the process if bad references)
  • Create and present an offer letter
  • Repeat the whole process if the offer is rejected
Also consider the Indirect Costs:
  • What was the "opportunity cost" to you
  • What could you have otherwise accomplished with the time you spent looking and sorting?
  • What additional business didn't get found or serviced due to your search process?
  • How much time did the process take?
  • What could the new employee have produced had you had one 2 weeks or 2 months faster?
  • What fell behind because there was no one hired yet to get it done?
  • How frazzled are you from the process?!?

At the end of your process... are you sure you got the best candidate? You got active seekers who noticed your ad. Is there someone else that's currently working somewhere and not actively looking, or someone that didn't see your ad, a better fit?

So, even with all that, is a recruiter cheaper? Maybe, or maybe not. Here are points to consider:

  • A good recruiter will help with defining the role and set expectations of candidates, salaries, etc.
  • A good recruiter will handle the sourcing, sorting, screening and present the 1 to 3 best candidates
  • A good recruiter will coordinate the process for you and help you prepare for interviews
  • A good recruiter will complete reference checks and follow ups
  • A good recruiter will pursue "passive" candidates as well as active one to find the best fit
  • A good recruiter will present candidates and help you get through the interview process much faster
  • A good recruiter can be a 3rd party mediator to make sure an offer will result in an acceptance
  • A good recruiter will allow you the time and emotional capital to focus on your business, not the process
  • A good recruiter significantly reduces your stress!

After 4 recessions in my career, a similar pattern occurs each time. As the volume of resumes increase in response to ads, companies cut out the use of recruiters. After a few months realizing that their hiring process has slowed down and they are still not finding the best candidates, the value of recruiters becomes more evident and they return. If this sounds like it makes sense to you... Save yourself the time and frustration, and call a good recruiter now!

About the Author:

Harry Urschel has over 20 years experience as a technology recruiter in Minnesota. He currently operates as e-Executives and writes a blog for Job Seekers called The Wise Job Search. You can also follow Harry on Twitter: @eExecutives or see his profile on LinkedIn.

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