Why Should Companies Use Recruiting Agencies?

  |   Expert Advice

It is common for companies to be hesitant about using search firms and recruiting agencies. Many feel they can do their own hiring and save money. However, you may be surprised to learn how beneficial it can be to use a recruiting agency to assist with your hiring needs and it may not be as expensive as you would think. Take a look at just some of the many benefits:

Ability to identify and persuade passive candidates (not just applicants): Let’s face it, many of the best candidates are not applying to job listings or posting their resumes on job boards. Top recruiting agencies dedicate significant resources to specifically find and persuade passive individuals to consider other opportunities. That process of hunting for passive candidates can be a grueling and time-consuming endeavor that requires persistence, diligence and perseverance. Partnering with a good recruiting agency can really increase the quality of your candidate pool.

Strong professional networks and resources: Recruiting agencies are in the relationship business. As a result, many recruiting agencies have strong and deep professional networks, which can lead to personal referrals and massive candidate databases. Both of these resources are immensely valuable when it comes to sourcing and recruiting candidates, especially when it comes to hard to find skill sets.

Industry and market intelligence: Recruiting agencies, especially those that specialize in a market vertical (e.g. healthcare) or business function (e.g. IT), acquire deep industry and market intelligence via the numerous exchanges of information that they have on a daily basis with professionals and leaders working within that specialization. Used properly, that intelligence can be a helpful resource for gaining information around market trends, hot skills, pay ranges, and more.

Saves you time to focus on your core competencies: Simply put, recruiting agencies do the heavy lifting. Not only in terms of the search and recruitment of candidates, but as importantly, performing all of the due diligence in terms of understanding a candidate’s back history, motivations, and compensation expectations. Good recruiting agencies are also highly skilled at closing candidates, which not only can be an arduous process, but if not done properly, will result in large waste of time and investment by all parties.

Cost of a bad hire is exponentially greater than the cost of placement fee: One of the biggest impediments to using a recruiting agency is the cost of the placement fee, which typically averages between 15%-25% of the hired candidate’s first year base salary. However, recruiting agencies can provide a higher quantity and quality of candidates to choose from, and when you factor in that the average cost of a bad hire ranges between 30%-50% of the candidate’s first year base salary*, over the long-term, a good recruiting agency can literally pay for itself.


* According to the U.S. Department of Labor