3 things recruitment agencies do not tell clients

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If you think all situations are black and white, it is obviously a simplification of what happens in the real world. There are always exceptions to the generally accepted rule of how agency recruiters make their money. On the other hand, famous author Tom Peters said: “Perception is reality”. You be the judge this time.

1. Don’t use a recruiter who will not meet you

246_teamwork_colourRecruitment agencies typically charge a fee, which is based on the placed candidate’s compensation, somewhere around two to three months’ salary and allowances; but charged in full only after you have hired their candidate.

You can compare the recruitment agency’s work as playing a lottery. They are not paid if their client does not hire their candidate. The consultant does not receive any commission, if the client chooses a candidate from another agency.  As a client has no obligation to the agency whatsoever, except to pay if they hire a candidate, the client will often engage several agencies at the same time for the same position. They do so because it’s free, nothing to lose and because they think each agency has their own pool of candidates (which in fact they don’t; most candidates register their resume with many recruiters, so the pool is pretty identical no matter where you go).ChessSet copy

Now here is something unbelievable and ironic. Many agencies struggle to make any profit because so much of their work results in no fee income; the simple reason being that they find no matching profile in their data base and network, or worst case, a competing agency was quicker and already got the foot in the door with a great candidate match.

Because of the nature of how recruitment agencies work, it is really first come first served. In other words, the agency who presents a candidate first has a good chance to make the placement and a fee. So how do you think this stress will impact the quality of work by the agency? Yes, you are right, it’s ridiculous.

What they don’t tell you? They have no time to come and visit your place of work, no time to engage in a meaningful analysis of your needs, no time to learn about your corporate culture, no time to meet hiring manager, HR officers, peers etc.

Recommendation: At the outset of your search, please ask the recruitment agency about their preparation process prior to actually starting the job for you? Will the briefing of what you need be only by phone and email?

2. Don’t accept a recruiter interviewing your candidates at Starbucks

3566_apple_laptop_books2_limeA recruiter just needs a mobile phone, a laptop and a network of friends. A very small investment and any Tom, Dick and Harry can call themselves a recruitment agency.

Many recruitment agencies keep their costs down by operating from small premises off the beaten track. Such offices have no proper meeting room facilities where face-to-face interviews can take place in a quiet professional environment.

There are still many recruitment companies who are not licensed by the Ministry of Labour as required by law; so they operate an illegal business. The Recruitment and Job Seekers Protection Act of B.E. 2528 (1985) requires a recruitment company to hold a license. Recruitment companies report their activities on a monthly basis to the ministry.

What they don’t tell you? Because of limited office space, if any space at all, the recruitment agency will use Starbucks, hotel lobbies and similar public space to meet and interview the potential candidates. What do you think these candidates will think about your company once the agency presents your company profile? How would you feel yourself, sitting in a coffee shop whilst trying to focus with people all over and around you? And at the same time present yourself while other café guests stare and listen?

Cheap fees and a one-man operation should provoke your suspicion that the agency may not hold the required license to operate a recruitment business.

Recommendation: For the very first meeting you have with the recruiter, ask to meet the recruitment agency at their office, so you can assess their facilities and premises and what your candidates eventually will experience? Ask yourself if the surroundings match what your company will want to associate with. Ask the recruiter where they interview candidates?

To check if your recruiter operates legally, simply ask for their recruitment license number. Example, Grant Thornton has license number 1138/2549 with 2549 being the year we first registered.

3. Don’t believe that shopping on the internet is executive search

10750_shopping_basket_lowHeadhunting candidates by approaching hot targets through a telephone cold-call is a very different animal than shopping on the internet. Here is what I mean by shopping on the internet.

At the time of writing this blog, I see that just over half the vacancies advertised on JobsDB, under the category Management and Top Executives, come from recruitment companies and not from the hiring companies. This is insane. Is it just me, but why would a hiring company pay a recruitment agency to advertise their vacancy on the internet job boards, collect the applicant resumes and forward to their client. And charge a fee for their… err…. service.

What they don’t tell you? To approach people on the telephone by cold-calling takes a lot of training, practice, resilience, experience, guts, and courage. This is not for anyone and why less-trained recruiters prefer to place an advertisement on the internet, then sit back and let applications come to them.

Recommendation: Ask the simple question: Do you use advertising on JobsDB or any other internet job board? At least you know and can make the sound call if this approach appeals to you and your company.

PS You are welcome to leave a comment – just below!

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Tom Sorensen

Tom Sorensen is an executive search veteran with over 25 years of experience recruiting in Asia, Europe, and Africa. He has worked in executive search in Thailand since 2003 and is recognized as one of the country’s top recruiters and most profiled headhunters.