How important is price when selecting recruitment agencies?

Lindiwe Nakedi3 (100 x 163).jpgLindiwe Nakedi, the co-owner of and a Career Consultant at The People Shop, recently told SmartProcurement that many people often believe that recruitment is a commodity which hinges predominantly on price: “Recruitment organisations, or at least the good ones, differentiate  themselves on quality and value added services which they provide and thus argue that there are more important issues to take into account than price only”, Nakedi said.

“Top recruitment agencies put in much more effort into the process than what industry generally perceives to be the case. There are many service related issues that need to be considered in order to guide procurement professionals in selecting the appropriate recruitment agency”.

Contrary to popular belief, experienced recruiters do not just advertise, send off the first few CVs they receive and then thumb suck a percentage as the rate of payment for their ‘hard’ work. “No, a lot more effort goes into the service which recruiters offer and the process in itself brings with it many challenges. One of these challenges is the skills shortage in the current market, whilst another pertains to cash strapped industries such as the Mining and other Resource sectors. Despite these hurdles quality recruiters will innovate and push ahead, and when they deliver to the clients satisfaction it is only fair that they are paid for their services accordingly”, Nakedi continued.

When talking about the concept of ‘service’ specifically, Nakedi explains that “a dedicated recruitment agency will take their time to firstly understand the client’s needs and to learn about their culture and organisational dynamics. Only then can the agency fully comprehend the specific role and the type of candidate which is needed. These understandings are, in turn, matched with candidates whose career goals and aspirations are in line with those of the organisation. That is how you achieve a happy fit”. Recruiters also have to match the personality of a candidate to the position and the organisation. Recruitment is thus about meeting many people and matching them most effectively with the present and future needs of an organisation.

All of this effort spent in evaluating people and comparing positions being offered is time consuming and costly for recruiters since they, as with any other business, have considerable overheads and expenses. Nevertheless, a professional recruiter will fully understand the dynamics of the market they are in and, based on this, will work out their percentage rate: “Most recruiters know that it is a rigorous process to fill even the simplest position – they receive a job specification which they then advertise, do the response handling and compile a first shortlist (for example, from 100 to about 20 candidates or less). Then, they meet the qualified candidates in order to assess them, and then shortlist again (ending up with about 4 or 5 well matched candidates) for the clients selection. This is all done whilst knowing that the client can have up to 50 other recruiters working on the same specification. Therefore, the odds for a recruitment agency’s candidates to make the grade are tough. It is an extremely competitive market and bear in mind that up to this point in the placement process nothing concrete has happened, and the recruitment agency has already incurred substantial costs – all of this at no risk to the client”, Nakedi points out.

Many internal and external challenges come into play during any recruitment process, most of which will occur at this particular point in the process. These can include turn-around times for CVs sent out, candidate feedbacks, and the sometimes long recruitment process of the organisation itself. All of these factors will, in turn, have an impact on how soon a placement will happen and when the agency will ultimately get paid. In some instances the process can take up to 2 or 3 months to be completed.

“These challenges are the true face of the recruitment industry. However, for quality recruiters price is mainly based on the work in progress, on follow-up and being advisory to clients, whilst finding the most talented fit for an organisation. Recruiters base their service and pride on the quality and caliber of individuals that they successfully place. Therefore, I believe that recruitment is much more than a mere commodity, it is a value adding service, and thus performance and quality of service should be assessed over price”, Nakedi concluded.

For more information, Lindiwe Nakedi can be contacted on the details below:
Telephone: +27 11 913 3945
Cell: +27 82 300 7825

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