If you are using a recruitment agency for permanent placements, you are being ripped off! Well, the majority are ripping you off. There are some who acknowledge this and typically they are your smaller boutique who are offering a far more personalised service.
Cue – Agency hysteria.
Having worked both sides of the fence, I feel I can make comment. And before the abuse commences, I’ll admit it. I was hopeless at BD and an average agency recruiter. Kudos to those toughing it out in agency land. Now back to hysteria. Where does one start?
[bctt tweet=”Most recruitment agencies are not providing near good enough services says @stanrolfe” username=”ATCevent”]
I’ve probably read enough agency terms and conditions to fill a bible. In fact, I’d love to find the original manuscript and trace its evolution to today. Ever noticed how much they all read and look like one another? Swap some branding and clause numbers and I’m pretty sure it’s the same document being circulated. Some are two pages, some many more.
The Agency will claim the terms are to reduce risk, protect them, the candidate, and you the client from the Agency Boogeyman. So what is the main theme throughout the document? A severe lack of trust:
- We don’t trust you the client – How many clauses are there around clients poaching, referring, not paying, re-hiring etc.? Wouldn’t you want to be partnering with your client, conducting your due diligence so you know they respect what you do and won’t screw you?
- We don’t trust our recruiters – Love this clause. We’ll present people to you, but we take no responsibility for checking credentials or right to work. We’ll slug you a great big fee for an introduction but we won’t ensure who we are representing is legit. Nor are we confident they will stick around so we’ll only offer you a three or six month replacement guarantee.
- We don’t trust the candidate – Some agencies have candidates sign sole representation documents. We all know you are fishing in the same pool, well here in Australia anyways. Once hired, they will leave. Hopefully not in the guarantee period.
- We don’t trust god – God is a crap actor and if all else fails we’ll charge you, and take no responsibility for anything.
So tell me, is this the type of partnership you want? I mean, they all want to ‘partner’ with you don’t they? Next time you get some terms, have a read through.
Yes, we all know that recruitment agencies have been screwed and you need to protect your business. But I would assume that you would likely not conduct business with that company, person again. So why bring your baggage into this new relationship?
Wouldn’t it be great to see a one pager which read something like this:
“Trust us, we’ve got your back”
Ok, ok the reality of it all says this is not possible. But surely terms of business which read more trusting would be a good start?
Now, onto The Fee
The vast majority slug you a percentage of total remuneration package. How can recruitment agencies justify fees of 30, 25, 20, 18, 15 of total salary package? More screwing here.
We should be negotiating on base salary only. Don’t agree on anything else. Let’s force the change.
Why? Well superannuation is government mandated. We as the employer must pay this. We also have to pay other costs such as payroll tax, workers compensation and insurance. All government mandated. Why are we not charged for this if you apply the same thinking? We are paying you for someone’s skills and experience, we are certainly not paying you for government mandated employment costs. We know, you pay super too but you aren’t paying a lump sum up front in addition to someone’s super are you? Unless you are being screwed by a rec to rec.
Benefits. The Car. If I am paying you for this perk, are you assessing the person’s experience and capability of driving a vehicle? Are you even checking to see if the person holds a valid driver’s licence? I doubt it. Bonuses, just how is this tracked and managed anyways? A sucker clause if I have ever seen one.
[bctt tweet=”Recruitment agencies are charging exorbitant fees for simply pushing you ads & resumes ” username=”ATCevent”]
Then there is the fee. Based on my experience here in Australia the fees would range between 15 – 20 percent of total package. It doesn’t matter whether you are recruiting graduates or senior management, the fee remains consistent. On $100K base that’s $15K minimum. Probably someone they have found through a SEEK ad. We all know what happens when they get a job, up goes a SEEK ad. I am generalising here. There are awesome agencies and recruiters who maintain a great network of candidates, who actually really work for the candidates but the majority are just pushers. Pushers of advertisements, pushers of resumes. Heck, their favourite song is probably Ice-T’s I’m Your Pusher from the Power Album. Cracking album and dope song, aight! In smaller markets like Perth, they are all fishing from the same pool, especially in the Science, Technology, Engineering, Mathematics (STEM) sector.
$15K. That’s about one fifth your recruiter’s salary! Who, could have posted that ad on SEEK for the same result (but that’s a discussion for another blog). Ever wonder why there are so many recruitment agencies? Because there is money to be made, good money.
Don’t even get me started on the three-month replacement guarantee.
So what am I saying here? Simply to stop being ripped off, and start negotiating hard ball with your ‘partners’. If they want to be your ‘trusted advisor’ and you’re not the type of company to screw your suppliers, then start negotiating flat fees, extended guarantee periods, base salary only. Long term partnerships are built on trust.
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