How do you know if hiring recruitment agencies to help you find talent is right for your business?
Roy White, president and CEO of Diverse Concepts, Inc., a Millersville, Maryland-based IT company, considered a hiring firm was because, as he put it, his company had "hit a deadspot with referrals."
"Everyone hires their friends and friends of friends—and well... leads started to dry up," White explains. "We were essentially fishing out of the same proverbial pond as all our competitors."
And social media? Helpful, he says, but when your company has very specialized job descriptions and criteria, that pool of talent is in high demand. With that, White reached out to a friend who opened a recruitment firm that focused on the IT market. He received several candidates and made great hires as a result. Some of the top questions that White asked helped him determine that the hiring firm was the right move for his business.
1. What are the firm's service rates?
A primary factor in the analysis of hiring recruiting agencies is, not surprisingly, cost. White's introduction with some larger firms, and their fees, made him reluctant to go that route initially.
"Some firms charged rates of 21 percent of the base salary of the hire," says White. That rate would eliminate any profitability that employee could produce for his company. "But when we looked at the [company's] pricing structure, it was different. The company charged a flat rate of $5,000—that price was the same as the referral fees that we offered in-house. That was very reasonable."
While that was White's experience, some large firms do offer value on the price in other ways. If your company is not in a position to carry all the financial responsibilities that onboarding a full-time team member includes (i.e. taxes, payroll responsibilities, insurance, etc.), an agency may be an option for outsourcing your human resource needs.
For example, my law firm was recently in the market for a temporary hire. We received a cold call from a national staffing agency. The hourly rate they quoted included the firm's rate, and the responsibility of identifying qualified talent, issuing them a paycheck and paying taxes on their behalf.
The idea of paying a higher hourly rate for a temporary hire seemed manageable financially, especially considering that we could see if the hire would be a good fit first, before making the long-term commitment.
2. Does the company focus on your specialized industry?
In White's case, it was very important to him that the recruitment agency he worked with not only specialized in small businesses, but that it understood "the tech world lingo." White was thoroughly impressed when the agency found him a SharePoint guru who wanted to stay in his geographical region.
In addition, White says it's not enough that the firm sends you "eight resumes a month"—those leads need to be measured against the specific needs of your company. The principle of quality over quantity definitely holds true here.
3. Does the agency understand and care about your company's growth?
It may not be enough that the hiring agency understands your industry—recruitment agencies must understand your company and its growth objectives and what role team members play in that process.
This was the case with the company White worked with. Not only was the owner a business associate of White's, he had a technology background and his company was a startup. All these factors played a role in the recruitment agency's ability to understand what its client needed.
When assessing the needs of your company's growth and hiring, consider using recruitment agencies as an option. There are many agencies—large and small—that may be an asset to you and your business.
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