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)
- 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.
- 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.
- 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.
- 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.