Recruitment is big business. A multi-billion pound industry in fact. And we’re not going anywhere. But how do we charge for our services? And why does our work deserve such fees? Most clients are completely accepting of our fees, understanding that they are getting a specialist recruiter for a low fee. Others just instantly say, ‘that’s too expensive’, or ‘another recruitment agent is charging me less’.
Why Every Business Needs a Recruitment Company in their Corner…
Current statistics show that 9 out of 10 employers are struggling to fill jobs, so recruiters are vital to your company more than ever. However, despite being one of the most lucrative industries, recruitment is often completely misunderstood. There is a significant amount of misinformation regarding costs, that can leave a bitter taste in clients’ mouths when finding a recruiter.
So, you’re a company on the hunt for new talent, but need helping sourcing that perfect candidate. You decide to ask a recruitment agency to send you the top talent in the local area. But how much do recruiters charge in reality? And does their flat fee offset the cost of hiring internally?
C’mon then, how much is it going to cost us?
We’d like to start by stating the obvious – of course, you could find a candidate yourself. This takes time but, most importantly, will the candidate be as good as someone a recruiter can find? On the whole, the answer is NO. A recruiter filters a much higher volume of candidates to find the perfect fit, based on the spec that you, as the company, provide. The price to replace an unsuitable candidate, and the time you spent finding them, is much more costly than the amount recruiters charge.
What do other recruiters charge compared to us?
On average, standard recruitment tends to cost 15-20% of a candidate’s first annual salary. Our standard charge can be anything from 12% up to 17%, we would never go higher than 17% – going below 12% would be doing ourselves a huge disservice. We know that our recruitment style is better than many agencies out there, we know that we can find the ideal candidates for the mortgage industry, but we also like to look after our clients. That being said, keeping our fee low whilst staying reasonable is super important to us. If the role is self employed, then we charge a flat fee that equates to £4k on average.
Our fee depends on location, role volume, role fill difficulty and will always be fair, and open to discussion about this. So, if we agree terms at 14%, place a mortgage advisor into your business, and you offer them a salary of 30k, then the fee would be £4200 + VAT. One thing to bear in mind is that a decent advisor should be making your business on average of £180k per year, so, on average, you’re only paying around 2.7% of their first year’s earnings. It’s really low when you think about it like that!
For harder-to-fill positions, an agency may charge up to 30%. Fees upwards of 30% tends to be a ‘headhunter’ fee. For anybody that has watched ‘Friends with Benefits’ – Mila Kunis’ character is a headhunter. A headhunter tends to work on Director level positions which involve a lot of time, not only searching for the potential candidates, but also working on the candidate, getting them interested in the role. They may take the candidate out for a round of golf, out for a meal, or in Mila Kunis character’s case, sleep with them (just kidding!).
What do recruiter fees include?
Firstly, there is a selling point to mention, that many other recruiters don’t, or are able to offer as they are not specialists to a certain sector. We know average salaries, reasons for people leaving, commission that advisors tend to get paid etc. We can help you attract candidates by letting you know what candidates from the mortgage market tend to look for.
The absolute key to our services is that it saves you time. It can take hours to go through applicants, call them, screen them, narrow them down etc. And this is just when you put a job post out. Posting jobs is just a standard starting point, we pay monthly fees to several job boards, sponsor job posts and also know how to attract more candidates to job posts with subtle job title changes & job post SEO. We will get more CVs than somebody without job posting experience would get. Arranging interviews, being available for the candidate at all times to ask questions, after care with the candidate to make sure they are happy – all these things take pressure off your company.
How our fees reflect our value as recruiters
That’s just the start, at the time of writing this, Alex has just over 18,000 connections on LinkedIn, (mainly from the mortgage and property sector). Ella also has over 12,000 connections, and so on. LinkedIn allows us to not only contact our 1st connections but also contact their 1st connections (to us that makes them 2nd connections). By paying a monthly fee to LinkedIn for their recruiter package, we conduct our recruiting and contacting smoothly. Daily conversations with high volumes of people from the sector, mean that when you give us a role, we usually have a few ‘passively’ looking potential candidates to approach straight away.
Our work in the sector means we often get referrals, as we offer great services to candidates, and maintain good relationships with them. In turn, they point people with similar experience in our direction to help them find a role. Our network is ever-growing.
Aside from this, we have our database that we’ve grown over the years; many candidates on here are ‘actively’ looking. We also have other avenues and industry secrets but I can’t be telling you those
The Cost of an Empty Chair
Statistics show that it takes on average 48 days to fill an empty position in the UK. Obviously, this can vary depending on the seniority of the role, the skills required, local competition and the job market overall.
When a vacancy becomes available, the time it takes to onboard a new employee can be extremely costly. Between advertising roles, shortlisting CVs and conducting interviews, a lot of time can be wasted. Similarly, waiting for a successful candidate to fulfill notice at their current employer will add even more time to the process.
During this ‘limbo’ phase, companies will be losing revenue. This can either be directly, if the previous employee was income-generating, or indirectly if it had been a supporting role. Costs may increase when employees are required to provide cover, which can impact everything from sick leave to staff morale.
In other words, the decision to hire internally, and opting to avoid recruitment agencies, could cost you more in the long-term.
The Cost of a
Misplaced Face
When a new employee is hired, productivity should be expected to fall compared to the previous post-holder. This results in increased time and costs incurred during the onboarding process as new faces are brought up to speed. Most HR experts agree that this process should take around 3 months.
Research suggests that around 43% of new hires will leave their new role within 90 days, which puts staff retention rates in jeopardy. 57% of hires made in the last 12 months were failing to work out in some capacity. A further 25% just didn’t work out at all.
Sometimes, it just doesn’t feel right. The main reason for a candidate not working out is due to being a ‘poor fit for the job’ (46% of cases), or a ‘poor fit for company culture’ (44% of cases).
According to data, the cost of hiring an unsuitable candidate for a mid-manager level role with a salary of £42,000, may ultimately cost a business £132,000 to resolve. In other words, recruiter fees are understandable when it’s essential to get it right the first time.
How we do business…
The market is full of recruiters who are solely out for that initial fee, and then prove to be terrible value for money in the long term. Think unsuitable candidates, poor quality CVs, and people that fail to understand the requirements of your vacancy. At Placing Faces, we are specialist mortgage and property recruiters. Our aim is to deliver a professional, reliable, and friendly service at a lower rate than our competitors.
Does ‘specialist’ mean we’ll be paying big bucks in recruiter fees?
Technically yes, you should be paying a higher fee. Our work is far more personalised – we know the market incredibly well and can find you the ‘perfect’ candidate, quicker than a non-specialist recruitment agency.
Our business model is simple: provide our clients with only the best faces in the mortgage and property industry, for a reasonable fee. We don’t cost the earth, and are happy to have more doors open for our candidates; if that means working on a slightly lower fee than the average, then that’s absolutely fine with us!
To view a range of roles we’re currently hiring for, please visit the following link to our jobs page!
Fancy working with us? We’d love to hear from you! Details about what we do and how to get in touch can be found via the link below: