By: Mike Tatay | Rochester Account Executive
Note: Due to the amount of information in this post we broke it into two parts, Part II will be out on Friday, August 27th. Thank you!
The last year and a half have been rough on the economy and on the job market. With unemployment high and companies keeping a closer watch than ever in some cases on how they allocate their hard-earned dollars it’s no wonder I hear this question frequently. “Mike, there’s a huge pool of people available and looking for jobs, why should I pay you to find candidates with so many already on the market?” The answer is not as simple and obvious as one would think.
The Most Efficient, Cost Effective Approach?
Recently I had a very interesting conversation with an executive whose company is currently looking for several employees. She mentioned how her company’s CEO feels they can effectively fill these positions on their own, and described the time he spends sorting through the stacks of resumes on his desk. This tsunami of CVs also trickles down to others, including her. This, of course, begged the question: how much valuable executive time is spent on these searches and not on their primary duties? If broken down by cost per hour to the company – what would those hours be worth; not to mention the opportunity cost in work pushed aside to perform out-of-scope duties?
Even in the age of Internet job searches and social networking there are significant challenges to employers wishing to attract and ultimately acquire the top talent in their fields.
All these avenues enable companies to post jobs and afford candidates nearly free access to information about available positions as well as avenues to apply to many jobs very quickly. This puts the company in nearly direct competition with every other company seeking the same candidates. In many ways this same ease of access negates the initial intent and dilutes the market. On the other side of the coin, candidates are now in a pool of thousands of other anonymous applicants competing for relatively few positions.
Attracting the Desired Top Candidates?
If attracting top candidates is your goal, you must examine the cost of a recruiter in contrast to utilizing internal resources and the ubiquitous job boards. Not only is advertising cost a financial burden for companies, but those dollars spent on the process of sourcing, interviewing and hiring can add up to much more than the fees of top recruiting firms. Another overlooked cost in this process, especially when resources are stretched is the cost of a bad hire. According to a study by Right Management the costs can be as much as five times the employee’s salary. Notably 26% of respondents to the study said replacing a bad hire cost them the equivalent of the person’s annual salary while 42% said it cost them twice that. Hiring candidates and hoping it works out is simply not a cost effective option.
Stretched internal resources often lack the time and resources to actively seek top passive candidates, as a result corporate recruiting becomes a passive endeavor, sifting through the high volume of active seekers as opposed to a proactive search for just the right candidate – those best in class employees.
Freeing Valuable Resources
A skilled recruiter’s ability to respond to a client’s needs can make them a valuable partner, saving them time, money and resources. An experienced recruiter does far more than “shuffle paper”, they will take the time to learn a client’s requirements, qualifications and duties for each role. A recruiter submitting unqualified candidates will quickly find themselves out of clients. You would quickly learn to ignore my calls or e-mails if I subjected you to a barrage of subpar candidates and expected a fee in return. Top recruiters familiarize themselves with your company, learning the history and about the corporate culture – acting as a marketer/sales person for your company and for the position you are looking to fill. They will be a liaison between the company and the candidate; they have more time to spend discussing the candidate’s goals and to offer sound career counseling. The result is a candidate who is not only a good fit, but who is more prepared to be serious about accepting a new position.
In Part II we’ll discuss passive candidates and more information about using recruiters in down economies.