Choosing the best recruitment model for your business

Now more than ever businesses are putting a focus on their hiring process with the job seeker at the heart! 

Employer value and brand value start with the hiring process. A slow, inconsistent hiring process gives any potential employee a bad first impression. So why is it important to highlight this first? 

Well, as an employer you need to tailor your hiring process to the position available. For example, a senior executive position may have a longer process with more decision-makers than an entry-level or graduate position. The same can be said for the commercial model you select. Let’s review the 4 main commercial offerings available when hiring members of staff. 

  • Contingency Recruitment
  • Retained Search 
  • Fixed Price Recruitment 
  • Subscription-based recruitment 

We go into detail on the 4 main models, 3 of which you may be aware of and the 4th, more of a wildcard (think “Escape to the country” mystery property) 

  1. Contingency recruitment 

Contingency hiring, the most widely used recruitment model. 

This model works based on agreed terms with the employer paying a % of salary upon successful placement. With fees typically between 15 – 25% you can expect to pay between £4,000 – £12,000 per hire. 

The benefit of this model is if you don’t place a candidate via the agency you do not pay a fee. You can also have more than one agency working on the vacancy as well as advertising the role yourself or putting in place an employee referral scheme. 

  1. Retained search

Retained recruitment is the opposite of contingency recruitment. Here, you are paying to ‘retain’ a recruiter to your cause – This guarantees the recruiter exclusivity and an income from the job once they find a suitable candidate. While you will be giving up some control over the process here, that’s not necessarily a bad thing. Often known as ‘headhunting’, ‘search and select’, or ‘executive search’, retained recruitment is associated with hard to fill job roles.

Headhunting has a very different pricing structure to contingency recruitment. The high-end nature of this business means that recruiters need to be sure they will be paid a fee for their efforts.

Although commercial models and agreements vary, on the whole there will be a payment on instruction of the vacancy, additional payment made on a list of shortlisted candidates, and the third and final payment on successful placement. 

The final cost of using a recruitment agency on a retained basis is a percentage of the starting annual salary the candidate will be paid, up to around 30%. The percentage price tends to be slightly higher in retained recruitment – and this can vary dramatically depending on the role and agency concerned. 

  1. Fixed price recruitment 

With fixed fee recruitment, businesses pay a one-off fee for recruitment advertising and get access to everything a standard recruitment campaign provides, without any additional success payments on filling a given role

Fixed fee recruitment is 70-80% cheaper than using a traditional recruitment agency and typically involves an end-to-end recruitment process: the candidate attraction (ie advert writing and candidate selection) managed for you, meaning you spend more time running your business and interviewing high-quality candidates.

  1. Subscription based recruitment  

Your mystery recruitment model revealed. The relatively new subscription-based model, allows a lot more flexibility and agility to organisations, allowing them to scale up or down depending on their requirements at any one time. Engaging with a business long term, across multiple roles and disciplines, allowing the agency to understand your business and work as an extension of your team. 

Subscription based recruitment models typically start from 6 roles per year, so rather than paying a % fee for these positions, employers can control their spend and spread over equal monthly payments. These monthly payments typically start from £500 per month! 

Which model is right for you?

This question is hugely dependent on your approach to each role, I say each role as you shouldn’t adopt a recruitment strategy/method across all roles. You will recruit graduates differently to senior executives. 

When creating your hiring plan and strategy, at this point you can select the 2-3 models you will adopt and even narrow down the 1-2 partners you will work with.

For any additional questions or guidance on the recruitment methods and your hiring strategy please do get in touch. 

Hello@qonnectd.com 

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