Recruitment quick maths
The numbers that make up your agency suppliers.
Happy new year!
Let’s get to it.
In 2014 an agency-recruiter-turn-in-house said to me “all recruiters work the same way”.
I often think back on this, as I hadn’t realised what a common misassumption it is.
You see, it was only in talking to a volume of jobseekers during the pandemic that I realised exactly how fragmented the recruitment marketplace is.
It isn’t so much a question of trying to be the ‘same, but better’ as I was inclined to think, in my conversation with Suzanne.
But there are good, bad and ugly in many facets of recruitment.
So, if you’re a cynical Su who thinks all recruitment is the same, you’d be limited by your own understanding.
If you’ve followed me on LinkedIn, you may have noted that I talk a lot about my approach, and how I typically reach an agreement that allows me to do my best work, invest in the right resources & tools, and fill every project I work on.
This might be retained, it might be coaching, it might be in-house, it might be something else. I build solutions to problems you currently have, as well as those you may not have identified.
But I’d be a terrible temps recruiter.
I’m no longer geared towards the contingency shoot-out as I was in 2008, when at Whitehill Pelham.
I don’t do “5 CVs by Friday” which may be all you need. That’s trademarked now, by the way, David.
As long as you understand your own needs, you can assess which approach works best for your vacancy.
Ultimately the math you need to figure out is whether you need:
Fast, good service and top-quartile pricing
Fast, adequate service and competitively priced
Adequate speed, good service and average price
There are bad options too, but let’s assume you don’t want to entertain these.
Equally, we aren’t talking about adverts or direct sourcing.
Any of these options work well enough with effective recruitment suppliers, depending on the course for your horse.
You need to establish what good looks like for you.
A lot of that’s contextual, which is out of the scope of an email like this; however, there are two questions you can ask which will shed some insight for permanent hires.
What’s an acceptable fill rate?
For exclusive arrangements, I wouldn’t accept anything less than an 80% fill rate (not including cancellations, of which there have been many since 2020).
For contingency arrangements, you might expect 30% if you regularly work with three suppliers on any given vacancy.
You’ll find businesses are built around their fill rate, and the lower it is, the more transactional.
Taking a 20% fill rate, which is a commonly touted figure for contingency suppliers.
On a £15k a month target, a recruiter might expect to achieve this through 3 placements.
This means they need to work on a minimum of 15 vacancies to achieve this.
If a recruiter has 22.5 days a month, this allows 1.5 days per vacancy.
So when you’ve left your three suppliers alone for three weeks to get the job done, that’s not how much time they spend servicing your role.
Especially when your typical 360 recruiter has business development, marketing, admin and so on to eat up their time.
Ironically, when they do fill a vacancy, the fee you pay funds the 80% of roles that aren’t filled. The cost of ‘no win, no fee’ is also a price that covers failure.
An 80% fill rate recruiter will have a similar business built around it, based on their objectives. It can work at volume, for sure, with the caveat that to achieve 80% they have a business built on service.
Understand your supplier fill rates and you can establish how much commitment you might gain from them, and the likelihood of their filling your vacancy.
How about retention rates?
What length of tenure can you expect from a recruiter’s placement?
You might think a three-month scaling rebate protects your interests, but if you have vacancies that become unfilled every 6 months from the same suppliers, something is very wrong.
While it’s true that people can change their minds, due diligence and care go a long way to longevity.
I expect this figure will correlate with the fill rate for the most part, but should never be assumed.
You’ll likely find it also correlates with the guarantee / rebate on offer.
My tenure for mid to senior hires is 4+ years, which is something I’m quite proud of, especially given these are roles that can effect transformation. My guarantee is a 1-year free replacement, which I’ve been asked to honour twice in 11 years of trading.
How does an agency business need to be built to improve odds of long tenure?
Well, I’m happy to tell you, if you’re interested, and a lot of it comes back to good experience – for candidate and employer.
Of course, with both these metrics, it’s easy to make a claim that can’t be backed up. If you prioritise high fill and retention rates – do your due diligence.
Take references. Ask their candidates what they think of the agency. Check out their adverts.
All visible qualitative measures, which back up the metrics on their efficacy.
Your situation may be a little different if, say, you only recruit for volume engineering roles that have scarce skill sets.
Think about what data shows an effective supplier for you, and make sure to check the math by asking the right questions.
You may even have some surprising findings, by looking more closely at how you work with your suppliers, to enable you to recruit more effectively.
Thanks for reading.
Regards,
Greg
p.s. While you are here, if you like the idea of improving how you recruit, lack capacity or need better candidates, and are curious how I can help, these are my services:
- commercial, operational and technical leadership recruitment (available for no more than two vacancies)
- manage part or all of your recruitment on an individually designed basis for one client
- recruitment coaching and mentoring (one place available at £200/hr + VAT)
- recruitment strategy setting
- outplacement support
Just hit reply to check if my approach is right for you.