You’ve identified the need to hire an HR professional. And regardless of whether you’re looking for a contract or permanent recruit, you need to decide whether you’ll manage the process yourself or outsource it to a recruitment agency.
Let’s assume you’re going down the agency route (after all you’re reading a post titled ‘choosing the right HR recruitment agency’); how do you know which agency is right for you?
With over 39,000 recruitment agencies registered in the UK, it can be challenging to cut through the noise and choose the best fit for your business and needs.
To help make your decision easier, we have pulled together some simple pointers to bear in mind when making your choice.
What types of recruitment agencies exist and which is right for my business needs?
For anyone new to the world of agency recruitment, there are four main types of recruitment businesses and two key ways of working with an agency.
We’ll start with the latter. The first, and arguably most common, is contingent recruitment; a model where the agency only gets paid if the customer chooses to hire one of the candidates presented by the agency.
The second is retained (quite often associated with Executive Search) which is basically the opposite of contingent recruitment. This means that you pay the recruitment agency a fee upfront (normally a third of the total fee value) to engage their services for making your hire.
The benefits and pitfalls of contingent vs retained recruitment are explained nicely here
The four main types of agencies are outlined below. All serve a slightly different purpose and add value to an organisation’s hiring needs in varying ways…
When making an HR hire, partnering with a specialist agency would be advisable. A good specialist HR recruitment agency will:
- Be well networked amongst relevant HR candidates
- Have deep knowledge of the HR industry and its associated challenges
- Provide a solid understanding of ‘what good looks like’ and how to assess it
- Offer a consultant-led approach (particularly useful if it’s your first HR hire)
- Challenge your thinking to ensure you’re making the right hire
- Offer support with crafting job descriptions, interviewing candidates and assessing talent etc.
Why should I use a recruitment agency to hire my HR vacancy?
When it comes to recruitment, there is always the question of ‘should I do this myself or outsource it to an agency?’
There’s never a one size fits all answer. But there are a series of questions you can ask yourself to help make the right decision when making a hire.
|Do I have the budget to pay for agency?||You either do or you don’t. But you need to be comfortable paying an agency’s fee and feel like you’re getting value for their service (we’ll talk more about fee structure later).|
|Is it a niche hire that requires a specialist skill set?||Niche skills can be difficult to find. That’s why they are niche. A specialist recruitment agency is generally going to be your best bet for finding these skills.|
|Do I have the time to manage the process myself?||A simple ‘yes’ or ‘no’ for this one…|
|Do I have the expertise to confidently assess the candidates?||Again, if we’re talking about hiring a specialist skill-set, how do you know what ‘good looks like’ if it sits outside your everyday world?
Making a HR is not simply a pure ‘technical’ hire. The difference between success and failure of the individual you choose to bring into your organisation is dependent on understanding ‘fit’ and alignment with your unique environment; a much softer and esoteric quality to establish.
If you’re an HR pro hiring another HR pro, then you’ve probably got this in the bag.
If not, then some external help and validation will be welcome.
|How soon do I want the individual to start?||Agencies tend to have the capacity to move quickly, so if you need someone to start ‘yesterday’, then an agency is going to be beneficial.
If time is on your side, then this point is of less concern.
|Do I already know a lot of people in this space?||One of the biggest selling points for specialist recruitment agencies is the people they know. Particularly in HR; wow, are this lot well-networked!
It’s likely that a good HR recruitment agency will have a bunch of suitable candidates on the radar and have an amazing referral community at their disposal.
|Is advertising the job likely to produce the right results alone?||What’s the market like at the moment? Is it a candidate or ‘buyers’ market?
If there’s ample talent available, you might be lucky enough to rely on the strength of your advert response. If there’s a talent shortage, then maybe not…
|Do I have the bandwidth to give feedback to all my applicants?||This is a biggy. What experience can you offer your candidates during the process?
If you don’t have the capacity to give feedback to ALL your applicants, then it’s likely that you’ll do some damage to your employer brand.
|Does my business have a well-known brand that will attract applicants?||If you work for a well-known brand and are considered a ‘destination employer’, then you’re going to benefit from attracting prospective employees to your business.
That’s half the battle.
If not, then that’s the beauty of using an agency to help elevate your profile.
|Do I want to do this?||This is important.
Do you want to be hands on with making this hire? If not, are you really going to put the right level of time, energy and effort into getting it right?
If not, you know what to do.
What should I expect to pay?
It’s the employer that pays the cost of engaging a recruitment agency, so you need to be comfortable with the price at the start of the process.
A key thing to consider is that when it comes to buying any goods or services, prices vary. This is no different for recruitment agencies. You should expect to see a level of fluctuation based on the type of agency and service you are receiving.
To avoid being too cloak and dagger about it, we’ve outlined the average fee structure for both contingent and retained recruitment, as these are going to be most relevant for your HR hiring.
Standard recruitment costs tend to range between 15% and 20% of a candidate’s annual salary (generally invoiced on candidate start date). But this can go as high as 30% for hard to fill positions.
For retained searches, the total fee is usually divided into three payments:
- ⅓ = upfront (engagement fee)
- ⅓ = upon presentation of candidate shortlist
- ⅓ = when the placement is made
This type of recruitment is usually used for senior level appointments or when specific candidate experiences are required. It therefore commands a higher price point; typically in the region of between 25% and 30% of a candidate’s annual salary.
(Source: Agency Central)
Regardless of the type of recruitment, you want to choose an agency that can demonstrate the value you’re getting from a 20% VS. a 15% fee. A good recruitment agency will be able to offer transparency around their pricing mode.
For example, if you don’t want to pay the upper end of a recruitment fee, they should be able to clearly articulate which part of their service you are not going to receive by reducing the rate.
How do I know that the recruitment agency is right for me?
As discussed at the very start, there isn’t a shortage of recruitment agencies in the UK. So what final things should you consider before you choose one to work with?
We purposefully say ‘one’ here, as above all, please only choose one agency to make your HR hire.
Selecting two or three agencies, simultaneously, will not strengthen your shortlist, or drive healthy competition, or help you reach success. It will demotivate an agency that wants to succeed; as you are immediately reducing their potential chances of success. That is not how you want to start a recruitment process.
So how do you know which agency to choose?
- How strong are their online reviews and reputation? (Trust Pilot, Google Reviews, Website Testimonials etc)
- Are they experts in the space you’re hiring?
- Do they champion working with you in an exclusive partnership?
- Do they offer any guarantees on your hires?
- Have they got any case studies or examples of similar roles they’ve recruited?
- Do you like the individuals you’ve spoken with so far? What does your gut say?
- Which other businesses have they worked with?
- Are they a member of a professional trade body like APSCo or The REC?
5 tips for choosing an HR recruitment agency
You hopefully now feel ready to firstly decide if you need the help of an HR recruitment agency, and secondly, feel better equipped to choose one.
Following the five simple steps below will help you select the right one:
- Choose a specialist that has experience of recruiting the type of role you’re hiring – ask for case studies
- Do your research. Investigate their online presence and reputation. What are their customers saying about them?
- Ask your recruitment agency to break down their offering against the fees they are proposing. What will you actually be getting for your money?
- Listen to your gut. Was it easy to build a rapport with the recruitment agency and do you see yourselves working effectively together?
- Just choose one. Do yourself a favour and work with one really good HR recruitment agency on this hire. Form a partnership and the results will follow.
Book a FREE coaching consultation to discuss your options
Still undecided about whether you should use an HR recruitment agency or do it yourself? Book a free HR coaching consultation with a member of the team to help weigh up your options.