recruitment

Dealing with Recruitment Companies

This document has been prepared for the ERBI HR Network and is designed to offer some insights and advice that may be helpful when dealing with Recruitment companies.

To begin with it is worth remembering that recruitment companies can be good allies who may have good market intelligence that they can share with you. The quality of Recruitment companies and consultants varies tremendously and it is often worth checking the consultant and company's credentials before using their services. If you have recruited someone through a particular company then they should be able to give you a good idea how they were treated and how well the consultant knew the sector. They may even be helpful in discussing your own future development.

It is always worth being prepared for an increase in calls and emails after any press release. This is particularly the case if the article mentions profit, new funding rounds, a change of location, a new executive appointment, an IPO or M&A activity. Many Recruitment companies use news and press email alerts to keep up to date on current market changes.

If you are not recruiting then do be up front on this. It can be helpful to give them an approximate time scale when they might wish to phone again. This prevents the consultant sending you information and using it as an excuse to continually call you.
Some companies target their consultants on numbers of calls made. It also saves them spending time on something that may not actually go forward. This is the biggest complaint of recruitment consultants and can be a major decision making factor in why consultants will actively attempt to recruit people out of an organization.

In some instances it is a good idea to clarify why the individual or company is contacting you. Is it because they are looking to get company names from you, so they can recruit someone out of your company? Or is it just that they want to keep abreast of current changes and feel they may be able to offer an individual tailored to your specific needs. A no names policy on reception is often a good idea for this reason and for site safety.

It is best to avoid listing the names of all but your most senior executives on your website. Regardless of the safety issue many recruitment companies and headhunters use websites as a method of getting names to contact. I have come across companies that have listed all their staff with profiles on a "meet the team" page. Needless to say this makes the headhunters job much easier in approaching these individuals.

Always try to agree any fees upfront. Be careful of those agencies who quote a percentage on the phone but don't follow up with any paperwork. All professional recruitment or executive search companies should have a competently drafted set of Terms and Conditions.

If you have a preferred supplier or deal with a small number of companies for different roles it makes sense to have a confidentiality and exclusivity agreement with them. If they are dealing with the operation heads and human resources they should be prepared to sign a confidentiality clause.

We would also advise getting the company to sign up to an exclusivity agreement. If a company is involved in a retained search they should be content to agree a non-poaching clause for a reasonable period (the standard time is 12 months after the start date of the new employee). This prevents reverse headhunting. This is a method used by some companies where they will recruit a person from company A and put them in B and then take the person from B and put them in A.

An area that is often overlooked is how the consultant deals with the candidate's resignation process and the potential counter offer. Good consultancies will help the candidate through this process and offer information on how to handle the emotional cycle that they will go through. An awareness of other people in the process is important. Do they have children at school age, do they have a partner or relative who is going to be affected by the move. It may be worth asking any potential Consultancies how they deal with these issues. Sometimes it is not the obvious factors like salary where you can lose a candidate.

The interviewing of candidates is also important. Clarify with any supplier how they interview and screen new individuals. They should have a process that takes into account the future development of the individual and they should only release their complete details once they have discussed the role.

Preferred Supplier Lists (PSLs) can be viewed positively and negatively by recruitment companies. It can be an effective way to organize and streamline your recruitment processes particularly for more junior roles where the individual skills of candidates may be in good supply. It is also a concrete reason to prevent continued contact from companies you do not wish to deal with. However it is worthwhile considering a few points before embarking on such a process. How many companies should you have on it? Will you have different consultancies for different levels of position? How often should it be reviewed? Will you be looking for a standard percentage fee rate form all your suppliers? If so can you be sure they will still supply the best candidates if another company is prepared to pay more?

Another item to discuss with potential recruitment companies is how they deal with candidates who are unsuccessful at interview. Does the consultancy fully prepare and de-brief their candidates? Do they give rigorous feedback after the interview? How soon do they give feedback? This subject can be crucial in managing the expectations of the individual and preventing negative publicity on the company being given to the market. At a senior level this can have a profound effect on future deals/alliances. Therefore the closer the relationship between the consultant and the company the better this feedback should be.

In conclusion working with a good recruitment consultant should be beneficial to all parties. They should be able to speed up the process of getting a new person on board, saving you time and money, and motivate the individual for when they start with you.

Recruitment Glossary

Advertised Supported Search
This works well when you are looking for generic skill sets, multiple positions or diverse locations. The benefits to you include raised company profile, management of the whole process by a dedicated third party consultant and exclusive access to all individuals responding to the advertisement. In special circumstances it enables you to advertise "blind". This can be particularly important if you wish the position to remain confidential and unseen by your competitors or existing team members. The fee structure is sometimes on a retained basis and sometimes on contingency

Retained Executive Search
This approach is best applied when you are looking for a senior executive who is unlikely to respond to an advert or a direct approach. This retained approach will secure a consultant working for you and who will pro actively source individuals and exclusively forward them to you. Traditionally the payment process is broken down into three parts. The first part is payable at the commencement of the assignment, the second at the shortlist stage (this often includes an extensive shortlist report) and the last part is due at the start date of the successful candidate

Contingency Search
Is often used when you are looking for junior or large numbers of people. It can also be used at a higher level but is more effective at lower salary brackets where less time is needed in the interviewing and screening process. The recruitment fee is only payable if there is a successful candidate. There is a danger that it can force suppliers into a CV race and because there is no guarantee of income the consultant may not spend too much time actively searching and interviewing candidates.

The 4 main types of Recruitment companies

High Street Agencies
Fee range, 10 - 17.5%
Temp to Perm, Fixed term contract work
Areas covered include Administration, catering, office workers, factory.
Local candidate base
Use Window and advertising boards to locate candidates

Off High Street Agencies
Contingency fee work, 12 - 25%
Salary range between £25,000 and £65,000
Specialists for regional permanent workers and temps
Areas covered include IT, Accounts, Legal, Healthcare, Banking and Finance, HR
Advertise in specialist publications or regional press

Selection Firms
Contingency and Retained fee work, 20 - 33%
Salary range between £50,000 and £100,000
Mainly permanent in specialist markets, national and sometimes international coverage
Areas tend to be market specific Life sciences,
Advertise via word of mouth, referrals and in niche journals (often paid for by client)

Executive Search Firms
Retained or Headhunting Fee work, 20 - 50%
May conduct some contingency work for particular clients only
Salary Range between £50,000 and above
Specialise in niche markets and at certain levels e.g. Executive Board level but can also focus across industries, HR Directors for instance.
Advertise via national press or in specific publications.

Please feel free to contact us if you have any questions or comments on this document

The Harten Group
Tel: +44 (0) 1223 233777
Fax: +44 (0) 1223 235777
recruitment@hartengroup.co.uk