The financial burden which comes with the reliance on recruitment agencies to sort what is arguably your company’s most important resource should not be underestimated. According to the latest Recruitment and Employment Confederation (REC) annual Recruitment Industry Trends report, the average fee for a permanent hire was £4,238 in 2018. And this number can be considerably higher for rare executive positions, with some agencies charging up to 30% of the salary. After several hires, these charges certainly do add up, but the good news is that there are several quick fixes you can use to minimise recruitment agency spend.
1. Invest in channels that will attract direct candidates
A lengthy list of potential employees sourced through direct recruitment channels may seem impressive at first, however it is crucial to always remember that it is the quality of candidates that matters above all else. Social media, word of mouth and job boards can generate numerous leads, but if these applicants lack the skills required to drive your business forward, they are simply obstructing your reach to valuable talent. In fact, a surplus of applicants demands more time and resources to identify the most compatible hire. By evaluating which channels deliver the highest quality result, businesses will be able to concentrate their efforts and funds into proven, successful avenues and reduce recruitment agency fees. Direct recruitment channels also facilitate a company in promoting its values on diversity and inclusion authentically, which enables it to appeal to a wider pool of suitable candidates.
2. Implement an employee referral scheme
A channel that has long been proven to be cost-effective and productive is an employee referral scheme. Staff tend to have larger social circles compared to companies, and by utilising their networks, managers can drastically reduce the time taken to hire and the costs too. Your people are also likely to excel in identifying quality candidates that will fit in with the company culture. Due to their first-hand experience they are able to engage truthfully with prospective employees and scout the most suitable talent. Additionally, this type of scheme helps in future proofing your workforce as research shows a referred employee is more likely to remain with a company longer than a member hired through career sites or job boards.
3. Enhance your company website to attract more direct candidate applications
While attracting staff through direct sourcing is fantastic for reducing recruitment agency fees, it is crucial that businesses are prepared for scrutiny from potential employees. Current job seekers are increasingly more active in researching a role before accepting an offer and according to Talent Board’s Candidate Experience Research Report, 64% say company career websites are the most valuable research channels. That’s why it is crucial to tailor your website to be user-friendly and designed with the candidate experience in mind. Answers to common questions regarding company culture, values and expectations should be easily accessible and if possible, delivered in engaging forms such as blogs and videos. Utilising AI in systems such as chatbots can also ensure candidates remain on the page until they are satisfied.
4. Push incumbent suppliers to renegotiate terms and reduce recruitment agency fees
Having healthy communication with your existing agencies will ensure stale approaches that are no longer working are not being unnecessarily continued. Engaging in frequent discussions regarding what is working and what is not will also identify where excess money is being spent. After thorough analysis, you will understand which terms can be renegotiated with your suppliers – and how.
5. Explore the possibility of bringing talent acquisition inhouse
Taking talent acquisition into your own hands can be the most effective way to reduce the cost of hiring. Minimising the usage of third-party suppliers by identifying and employing prospective candidates directly ensures that only quality hires are made which are in line with your strategic talent planning. Making this move will require knowledge on where to prioritise budget and resources, which technology platforms to select and how to build a scalable direct hiring function. This certainly is no easy task, but as our previous work with clients across a variety of sectors shows, it can indeed be done.
For more advice on how to we can help reduce your recruitment fees, contact us today.