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As the primary source of experienced hires across the market, recruitment consultancies have become an increasingly integral part of any firm’s employment strategy. Yet in a time where professional standards are regularly high on the agenda, it seems that many organisations are willing to accept a below par recruitment service.


Fees or commission?

As with many advisers, the common charging structure for most recruiters is based on a percentage commission on completion of assignment. This is often the preferred choice of the customer as the perception is that it is a simple case of only paying for what you get. This observation is not strictly accurate. It is indeed true that through a commission or contingency-based approach, charges are only applicable when a recruit commences employment. However, given the nature of a no win, no fee approach, it would be reasonable to suggest that the level of fee applied on a successful assignment would invariably take into account the costs incurred on an unsuccessful one. But as the traditional method of payment within the industry and perhaps the most cost-efficient when applied to positions where candidate supply is high, recruiters and employers are generally happy with this arrangement and will continue to follow this structure to 2012 and beyond.

For assignments in areas of low candidate supply, however, perhaps where a specific skill set or less common experience is required, a fee-based approach may be more appropriate. In the knowledge that they will receive payment for the work involved, the recruiter can allocate a far greater and pre-agreed amount of time and resources to the assignment. This affords the recruiter opportunity to conduct extensive market research, proactively contact all potential targets within a realistic geographical area, extensively prescreen and present a qualified shortlist of the very best individuals available. As the eventual fee levels tend to remain in line with that of contingency- based searched, the client effectively receives increased value for money.

A professional recruiter will send an employer copy of their payment terms prior to or on agreement of the assignment and will always be happy to explain the charging structure if any questions arise. In most cases, this will be outlined as a percentage of first year remuneration unless a different fee structure has been agreed.


Professionalism proposals

“A pivotal review objective is to have standards of professionalism among those who deliver services”.

Any organisation that has used external suppliers for recruitment projects will have no doubt encountered a wide variety of standards in the consultants that they have dealt with or the services that they have received. The reasons for this disparity can include experience, training, specialism and company process, with the result being a poor perception of recruitment companies as a whole rather than a distinction between the good and the bad.

Unlike the financial services industry, within recruitment there is no prerequisite qualification to help define competency in giving advice. This is not to say that recruitment consultants have nothing to learn from the FSA’s professionalism proposals. Through the RDR, the FSA has identified that service providers must adhere to a code of conduct or standards of practice to maintain consistency in advice and service levels from company to company. Most perceptive recruiters will recognise that applying a higher standard of professionalism to the industry will be beneficial in terms of both take-up and repeat business.

To supply applicants that meet not only the explicit criteria for skills and experience to perform the role competently but also the implicit criteria of culture fit, attitude and motivation requires a comprehensive understanding of the company, the business needs and what a successful outcome would involve. This can only be achieved through a truly consultative approach which will include an extensive fact-find and agreement on an ‘action plan’ outlining steps and processes that the recruiter will follow to provide the ideal recruitment solution.

As many customers will shop around to identify a financial adviser, employers should apply the same principle to securing a recruitment partner. They must be prepared to spend time with a recruiter in the short term, making sure that they follow these essential discussion points to save considerable time filtering CVs and conducting unnecessary interviews in the long term. Therefore, when considering suppliers, ensure the recruiter can present a justifiable action plan that, as an employer, you believe will ultimately secure an effective recruitment solution and that the recruiter has shown a level of professionalism that you would wish for as the face of your vacancy on the market.

• Adviser Business - April 2009

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