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  • Nathan Ware

Is A Recruiting Agency Worth It?


A lot of companies will leverage a sales recruiting agency or sales recruiter once they have already exhausted their internal efforts on hiring the right person for their team. To me this is backwards, but it is how most hiring managers and companies operate. After posting job openings on Indeed, Monster, Zip Recruiter, Glassdoor, and the dozen other job board services out there, they will not so quickly learn that this is actually where careers go to die. You see, after spending months not using a sales recruiter, and sifting through God only knows,how many resumes, the Human Resources team or Hiring Manager figures out that they have become inundated with hundreds, if not thousands, of "D league" sales people who can't do the job.

So how many minutes, that turned into hours did it take to go through these candidates? What about the time spent phone screening, or even worse, interviewing the wrong people in person? What about the lost time that equals lost revenue and missed growth targets by having an empty seat, or worse, the wrong person in that seat? Bottom line is, this is just a burn rate the sales force can't afford. The cost of an empty sales seats or low performance sales representatives is just too great. A bad hire can cost a company up to $1,000,000 in start-up costs, resources and lost revenue. Not recruiting the right sales person is just bad for business. So what is the alternative to job boards? Sales recruiters. The right sales recruiting agencies and sales recruiters can offer fair and affordable recruiting strategies that allow sales manager and businesses to focus on other aspects of the business other than sourcing candidates. The hiring itself is still done by the hiring manager but the upfront leg work of finding someone worth interviewing is done by the recruiter. As a sales manager what other important aspects of driving revenue and the business could you focus on if you didn't have to sift through a pile of resumes, and conduct initial phone screens? The sales recruiters will bring the right candidates to your boardroom for you, eliminating a lot of the upfront dirty work of finding a viable candidate to begin with.

So what do you look for when evaluating sales recruiting agencies? Here are a few of our top criteria:

Experience of the agency and their team in your field

There are a variety of recruiting agencies out there that specialize in specific fields or areas of expertise. Some are experts in government, technology, construction, sales, just to name a few. It is important that you research what specific industries as well as companies that they have worked with in the past to better understand if they can meet your needs as a client.

Further to exploring what industries the recruiting agency if proficient in, you need to check out the background of their team. If for example you are looking for a sales recruiting agency, due your homework on their team. You can easily get on LinkedIn and review some of their team members. If their recruiters come from a service or sales background as well as have a decent amount of experience in recruiting you'd be better off gong with the more experienced team. After all, it is these specific individuals who are going to be doing the recruiting. I would argue you are better off going for a team built from former sales professionals who have now become recruiters over your traditional human resources recruiter. The reason being, they have lived in the shoes of the very people you are trying to attract to your team, they know the ups and downs of sales, what it's like and more importantly, what it takes to be successful at it.

Contingency or Retained searches

There are two types of offers that most recruiting agencies will make. The first being retained, a retained search is when the client pays the recruiting firm a percentage of the recruiting fee up front, hence a retainer. The remainder of the fee is typically collected once a successful hire is made. Keep in mind, the retainer usually is the less expensive option even though you are committing some dollars up front.

With a contingency search you will not owe anything until a successful hire has been made. That typically means, once an offer of employment has been signed and delivered. Due to the fact the upfront work is being done for free and there is no real commitment from the company to the recruiting firm, the fee is typically higher than that of a retained search. There are some other variations of both these models that exist, such as monthly installments or payments as well but are the less common form.

Fees​

Typically the average fee for recruiting ranges from 15% to 20% of the candidates first year's base salary (excluding commission and other incentives). Usually the fee is collected in part or fully once the candidate has been hired and a job offer was signed. You will find agencies out there that are willing to do it for less but be weary of lower fees, often times the less you pay, means the lesser of a priority you become to the recruiting agency. If you were going make $4,500 or make $10,000 for the same amount of work and you had two client's to recruit for who would you prioritize? Just make sure the quality and value you are getting in return for the fee is worth it.

Terms & Conditions

This one is easy, there should be a few things in a recruiting contract that puts you at ease when signing on with a recruiting firm: a) a money back guarantee and b) a cancellation policy. Many recruiters will offer a replacement gurantee but no money back gurantee for a hire that failed to make it through their probationary period. This has two fundamental problems with it but is an unfortunate standard across the industry. The recruiting agency doesn't owe you anything for what was a failed service? In 99.9% of all industries the customer is always right and a refund is the final way of making things right if that is to be held true. When refunds are denied but replacement guarantees are in place in stead the client is delaying their return on investment (ROI). They already paid for the one candidate who didn't work out, now they have to trust that the recruiter or recruiting firm will actually put their recruitment team to work on a project that was already paid for instead of chasing down new sales and recruiting placements? The candidate waiting for a replacement falls to the bottom of the priority queue and is left with an empty chair and wallet. The point is to always look for a fair and flexible Terms & Conditions policy in any contract that will offer a refund under fair circumstances as well as a replacement guarantee, the determination on how to move forward on a failed hire should always rest with the client. Hopefully you found some of these pointers on how to select a sales recruiting agency or any recruiting firm, helpful. Good-luck on growing your team and revenue!

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