The Truth About Recruitment Agency Pricing

If you’ve ever worked with a recruitment business, chances are you’ve engaged them on a contingent basis.

Your recruiter will find, interview and assess candidates for your vacant role and you pay a fee if they find the successful candidate.

Because you only pay a fee if they find the successful candidate, perhaps you briefed more than one contingent recruiter on your role. In essence, you created a resume race - but we’ll come back to that later.

Let’s start with what the word contingent means: liable to happen or not; uncertain; happening by chance, accidental.

Hiring the best talent is the most critical challenge facing leaders today.

“If you think recruitment is a transaction, you are under-capitalising on the deeply strategic nature of what it can be. Every single hire can be used to upgrade the capability of your organisation”.

- Elizabeth Kingston

Kingston Human Capital is deeply committed to supporting you to recruit game-changing talent and transform your business with the people you hire.

This doesn’t happen by accident or chance - which is why we don’t do contingent recruitment.

Uncover the Truth about Contingent Pricing

The reality of contingent recruitment

Contingent recruitment is a casual arrangement - if a recruiter is successful, they charge a fee. If not, no fee is charged. They may invest significant time working on your role, but there could be no return on that investment.

We know that people are the heart of everything and can ‘make or break’ an organisation. We also know that recruitment, when done in a deeply consultative and strategic way, can be a game changer.

We care too much about these things to do contingent recruitment.

The average contingent recruiter in Australia and New Zealand successfully fills 1 in every 5 jobs they work on.

This means 80% of their time is spent working on jobs that they won’t fill.

No matter how good a recruiter is, they only have 40 working hours in their week.

If they’re very good at their job and super efficient, they might be able to evaluate up to 20 candidates in a standard working week.

If they’re working with you on a contingent basis (and you’ve probably listed your role with a couple of other recruiters too), they can’t spend all of those 40 hours working on your role.

Because they only fill 20% of the roles they work on, they’re probably working on an average of 8-12 roles at any one time.

With only 40 hours in the working week, your role is only getting a fraction of their time and attention.

Contingent recruitment creates a continuous loop of bad practice, poor client service and discontent.

If you’ve ever felt like a recruiter grabbed three CVs of their database and flung them at you - contingent recruitment is the reason.

In most cases, contingent recruitment will get you a service based on speed (aka the resume race) and often nothing else. You don’t get the hiring outcomes you need, candidates get treated poorly, your employer brand and reputation suffers.

In the words of leading recruitment speaker and author Greg Savage - “Contingent recruitment is a fool’s game”.

Risky business

Think about the most important strategic decisions you make as a leader. The *big* decisions that keep you awake at night.

Do you leave those decisions to chance?

Hiring the best talent is game-changing. You can literally transform your organisation through the people you hire.

Why would you hedge your bets on a decision that important?

Contingent recruitment with multiple agencies is just that: Hedging your bets.

A contingent recruiter simply must work on multiple roles, which means you’ll only ever have a fraction of their commitment. You will never get 100% of a recruiter’s commitment in a contingent arrangement.

Contingent recruitment is a counterproductive model that yields poor outcomes for everyone involved - your as the hiring employer, candidates and the recruiter.

10 Questions To Answer When Partnering A Recruitment Agency

Recruitment is a professional service

Good recruitment doesn’t happen by accident - it’s a highly strategic process.

Good recruiters are true consultants - experts in their field who add value and solve problems.

Your recruitment partner should work with you in a collaborative and strategic way to find, engage and help you hire the best talent.

Like any consultant providing a professional service, you should expect them to give your project the time and attention it deserves - and deliver the best outcomes for your business.

You don’t give your quarterly BAS to three different accountants or your all-important employment contracts to three lawyers - why should recruitment be any different?

With all due respect to the legal profession, hiring game-changing talent shouldn’t be a ’no win no fee’ service.

Building a recruitment partnership

We have established that contingent recruitment is risky business - and unfortunately, hiring managers who list their vacancies with multiple recruitment firms are part of the problem.

Each time you recruit a new team member, you have an opportunity to upgrade your talent and your organisation.

Do you want to waste this opportunity by listing your vacant role with two or three contingent recruiters who simply can’t give the search and selection process the attention it deserves?

On the other hand, when you work in true partnership with the right recruitment firm - on an exclusive basis - that’s when the magic happens.

If you don’t feel comfortable giving your role exclusively to a recruiter - find a different recruiter. Like any professional partnership, it has to be the right fit.

We care deeply about supporting you to hire the best talent. Which is why we only work on an exclusive or retained basis for permanent recruitment.

As the only recruitment partner dedicated to your search, we can allocate the resources of our full search team (up to 13 people) to your role.

You will see the difference - we promise.

Contingent vs Exclusive/Retained

Let’s take a look at these two scenarios.

Scenario A

Engage a recruitment firm on a contingent basis

One recruitment consultant is focused on only your role

1 recruitment consultant x 40 hours a week
= 40 hours of candidate search and evaluation for your role during one week
= approximately 20 candidates considered/evaluated

The top 3 candidates you receive will be the best of a pool of 20 people (maximum).

If that recruitment consultant is working on multiple roles at the same time

1 recruitment consultant x 40 hours a week
= 40 hours / 10 roles (conservative average)
= 4 hours of candidate search and evaluation for your role

Scenario B

Engage a recruitment firm on a retained or exclusive basis

13 x talent specialists x 40 hours
= up to 520 hours of candidate search and evaluation for your role during one week
= approximately 170 candidates considered/evaluated (up to 3 hours per candidate) during one week

In this scenario, the top 3 candidates you receive will be the best of a pool of up to 170 people.

When you work with Kingston Human Capital on an exclusive or retained basis, your role becomes the key focus of our entire sourcing team.

Our team of 13 talent specialists can focus on screening, interviewing, and evaluating candidates for your role.

Naturally, this means we can do a thorough, quality evaluation of more candidates, which will drive better hiring outcomes and will promote and protect your employer brand.

Discover how we’re different and give you a competitive advantage.

An exclusive or retained partnership: What you can expect

When you partner exclusively with Kingston Human Capital, you’ll benefit from our unwavering commitment to delivering the best talent, every time.

Here’s what you can expect:

More candidates evaluated - better reach and quality

Our team of 13 talent specialists will spend up to 40 hours a week on your project. On average we spend up to 3 hours identifying and evaluating each candidate. That means we can consider up to 170 candidates per week.

The broader the talent pool, the higher quality of candidates you can be assured of seeing. We’ll bring you the very best people from that list of 170.

Leverage our expertise

This is what we do every day - it’s our profession. We’re trained to identify high performing traits and evaluate previous experience. We’re trained in strategic sourcing, culture matching and how to engage with top talent in a meaningful way.

Because this is our profession, we can efficiently identify, evaluate and engage with more great candidates that you have the time to access during your working week.

You’re probably already wearing multiple hats and juggling the realities of your BAU.

Placement guarantee

We confidently offer a 3 month guarantee on all permanent placements (and 6 months for executive permanent placements. This means if we get it wrong, we’ll replace the candidate free of charge.

Since our business began in 2013, we’ve had to exercise our replacement guarantee twice.

Powerful access to top talent

Leveraging the latest algorithmic search and machine learning technologies coupled with good old fashioned hard work and diligence, we leave no stone unturned in finding and engaging the best talent in the market.

By the end of the recruitment process, we will have provided you access to talent you simply couldn't access on your own.

The Kingston Human Capital Recruitment Process

Role assessment and evaluation
Advertising
Attraction of passive candidate market
Candidate screening
Candidate interviewing
Candidate testing
Shortlist and shortlist report
Interview question design
Interview facilitation
Compliance, reference checking, right to work checking
Extending your offer to your preferred candidate
Onboarding support
Rejection of the unsuccessful talent pool
Promotion and protection of your employer brand

Factors determining the cost of a retained recruitment project

The following factors shape recruitment costs:

Time and labour dedicated to your project - ie the number of team members we will allocate to your role
Reach - do you need a local, national or global search?
Marketing - would your project benefit from a video campaign? Video is incredibly effective - 87% of marketing professionals use video to engage with their audience.
Advertising - beyond standard job board advertising, do you need a targetted social media campaign?
Project delivery time - does the urgency of your project require our team to work beyond standard hours?
Testing - do you require candidates to complete psychometric (or other) testing?
Placement guarantee - what length of replacement guarantee do you require?

What does it cost?

In the US, retained recruitment can cost up to 25% of total salary package.

In Australia, the cost ranges between 14 and 23% of total salary package.

Every hiring moment is an opportunity to upgrade the capability in your organisation. You can literally transform your business through the people you hire.

That’s worth paying for.

Learn About Recruitment Agency Fees And Pricing

The DIY scenario

Some organisations prefer to run their own recruitment process. Here’s a summary of the key considerations of DIY recruitment:

Time

Yes, DIY will save you a recruitment fee. However, the question is: Do you have the time and expertise to invest up to 520 hours in making sure you’re finding and attracting the best and the brightest?

No leader or hiring manager has that time available. Even an in house talent acquisition team is unlikely to be able to invest that much time.

The next question becomes: Without that time available, do you run the risk of simply hiring the next available person? Choosing the most convenient or easiest option (because you have to get back to your day job) rather than finding and engaging the best of the best?

Advertising costs

If you’re going to run your own recruitment process, you need to factor in advertising costs on job boards, social media and perhaps industry network sites and other places where your ideal talent spend their time online.

Compliance costs

Be sure to factor in the costs of checking candidates’ visas/rights to work, criminal history, and professional references.

Your sanity

Most leaders report they don't have enough hours in the week to dedicate to a detailed and rigorous recruitment process. All leaders and hiring managers juggle competing priorities and recruitment is not your core job.

Opportunity cost

Remember, every single time you hire is an opportunity to upgrade and transform. To set the path for the future of your business.

There are many costs associated with making the wrong hiring decisions - a missed opportunity could be the most profound.

Making the wrong hiring decisions could keep your organisation standing still, suffering from the same issues year after year.

It stands to reason that finding the right [best] talent is still the number 1 thing on every CEO’s agenda.

Get the most out of your recruitment partnership

Good recruitment is a highly strategic process. Kingston Human Capital is deeply committed to delivering the best hiring outcomes for our clients, every time.

If you’d like to discuss how we could partner with your organization, please get in touch with us and see how we can help you.

Here are more useful resources

Finding needles in haystacks is what we do best. We use traditional and algorithmic-search techniques, video recruitment, and behavioural economics to find you the best talent in the market.

Recruitment Red Flags: How to avoid hiring the wrong person

How Unconscious Bias affects your Hiring Process

Your Guide To Building A Best Practice Executive Recruitment Model