The truth about cheap recruitment fees

  • Reading time:3 mins read

The truthThe lesson is, if you haven’t seen any resume from your contingency database recruiter within the first week, start to be concerned. The chance of ever getting a resume has dropped to almost zero.

A contingency recruiter will alone typically handle 10, 20 or more jobs at any given time. If they don’t get a match within days, they move on to the next assignment and client.

It’s like playing the lottery

You can compare a recruitment agency’s work to playing a lottery. They are not paid if their client does not hire their candidate.

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 database and network, or worse, a competing agency was quicker and already got a 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 that presents a candidate first has a good chance of making the placement and earning 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.

Business model of recruitment agencies

Change nowThe business model is not geared to spend weeks or months on your job search.

  • The consequence is that a difficult search for candidates is put aside for a miracle to happen; meanwhile the recruiter takes the next telephone call and hope for an easier fix and assignment.

Over the last 12 months I have personally talked to many companies who have wasted months and months waiting for resumes. They were lured into the belief that low fees would uncover the hidden and passive talent. Hellllloooooo!

I also talked to one executive the other day who had been interviewing 20 plus people but still didn’t hire any. Think about the important tasks that meanwhile were left unattended on his desk.

The top of the irony is that by now desperate hiring managers call us for help, and they quote fee, terms and conditions which clearly have failed to provide the talent they so desperately need.

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.