Let’s face it, the staffing and recruiting industry doesn’t have the greatest reputation. Many companies have hired a recruiter and paid hefty fees that yielded little or no ROI. As a result, we encounter a lot of resistance from companies needing to hire key talent and for good reason. Most of these companies (who are justifiably wary) have been burned by a failed attempt to hire through an agency. So, what can employers do to help mitigate their investment risk, while still gaining the benefit of the network, resources, and expertise of a recruiter?
Guarantees are nothing new. There are lifetime guarantees, first-time guarantees, low-price guarantees, try before you buy guarantees, money-back guarantees, service guarantees, and even warranties. The question is, what position should a recruiter take when it comes to offering a placement or performance guarantee? Is this an important factor in determining what agency you should select to help you fill your next role?
- Conduct due diligence through customer references, online reviews, and discussions.
- Select agencies that serve as your agent, not the candidate.
- Clearly define and scope the position, not just duties and requirements, but likely challenges facing your new hire, requisite core competencies, personal attributes, experience, and education.
- Discuss your Vision, Mission, and Values in your interview process to ensure alignment.
- Develop behavior-based interview questions to address likely challenges and look for requisite core competencies for the position.
- Ask the candidate to develop a 90-180 day plan to help transition successfully into the role.
- Prepare a 90-day onboarding plan
- Establish a weekly, bi-weekly, or monthly check-in meeting with an agenda to review performance and provide feedback to the candidate.
The industry standard for most recruiting agencies is a 90-day guarantee. You may find some willing to offer more, although it likely depends on the type and level of search being conducted. To help alleviate the concerns of our clients, we have split our fees into three types, each with specific assurances in order to properly earn our fee.
1. Engagement Fee
The engagement fee is an up-front fee that aligns the company and the recruiter. We guarantee that we will provide qualified candidates within a specified amount of time (depends on the search) or we will refund. Thereby, we are accountable to delivering quality candidates within a defined period of time.
2. Placement Fee
The placement fee is paid at the time of placement and is a reward for placing a candidate into the role. This ensures that we are not only accountable for providing interview-worthy candidates, but candidates (actually) worthy of an offer. We provide a placement guarantee, depending on the role, that ranges from 90 days to one year.
3. Success Fee
The success fee is a portion of the total placement fee that is set aside for a period of time (depends on the position & client) to ensure that the candidate is on-board and performing as expected. The idea is that we don’t want to take the full fee until our clients are certain the candidate is performing as expected. If not, then we don’t charge them the success fee.
We believe agency recruiters should have some accountability to your return on investment. That being said, we also believe employers should recognize that recruiters can only control the front-end of the process. Companies with weak leadership, weak strategic planning, poor communication, lack of metrics/dashboards/KPIs, cultural in-fighting, and low accountability should assume a significant amount of responsibility for the success or failure of any employee, including those hired through an agency.
For Example: Let’s say you purchased a new Porsche and decided to run it through roads filled with potholes at high rates of speed. Would you consider Porsche (the manufacturer) responsible for the damage caused to the vehicle? Should those repairs rest on the driver/owner, or the manufacturer? In this example, your employee is the Porsche and their performance success will be predicated on the environment you put them in. That said, be careful not to hire a “Porsche” when what you may need is a “Ford Raptor”. You cannot hold the manufacturer accountable if you purchased the wrong car for the job.
In summary, Yes, we believe satisfaction guarantees are important when engaging a recruiter, but if you do your part as an employer then you’ll likely find the ROI from your recruiting fee will not be an issue. If it is, then the recruiter should step up and take ownership. This is why we feel that “reputation” is the most important aspect to selecting an agency.