So the economy is recovering. Some still don't believe that, but for those who do, there's one thing that follows a recovery – hiring.
There's just this one little problem. Many recruiting departments suffered serious cuts during the downturn, which makes sense. After all, if you're not hiring much over a period of 2+ years, you're probably going to look hard at your staffing levels in your recruiting departments and make cuts.
So, the recovery comes, and with it, the 64K question – when do you start hiring more recruiters? Most recruiting departments I'm aware of haven't yet made that commitment, which means that the recruiters who survived the downturn are going to see an increasing load of positions that they're asked to recruit for.
Want to give those recruiters relief? Your choices are as follows:
1. You can hire more recruiters. That's a commitment many companies aren't yet ready to make.
2. You can supplement your recruiters with agencies that supply contractors and (if hourly spots) temps. Your play if you go that way is contract to hire, or temp to hire, which offloads your recruiters from having to recruit for the spot(s) in question. Be prepared to pay 35-55% markup (up to 100% for high end contractors), depending on your volume and the type of positions you're trying to fill with the contract to perm strategy.
3. You can hire headhunters and pay contingency or retained search fees.
4. You can put a recruiter back to work by bringing them in as a contract recruiter on a month-to-month basis. You name the fair rate, find them, and onboard them yourself to avoid the fees cited in #2.
For me, the answer is pretty simple. There's a lot of cost in the contract/temp and headhunter routes, and if you're scared to commit full time via option #1, go with option #4. Hiring a contract recruiter is a great way to hedge your bets. You get someone who has been there, done that – and will be very, very happy to be back in the saddle again. Rather than paying the significant overhead in options #2 and #3, you can 1099 a contract recruiter and if you pick the right one, you'll have a jump start on a great candidate when you are ready to hire recruiters full-time again.
Be a sport. If you're not ready to hire more recruiters, take some of the pressure off your recruiting team by bringing in some contract recruiting help as the number of open positions grows.
This public service announcement has been brought to you by someone
who likes recruiters…A lot…
KD -
You know I love you, but sometimes your math skills show your public education background coming through. Your best option – in this economy – is going to be to use a contingent staffing firm – for a number of reason’s – but the best being overall savings and control of workforce. Here’s why:
1. While you’ll pay a 35-50% markup using contingent firms – you like most Corp HR Pros – have never really done the break down to understand what your actual per hour cost is by position – here is a hint – it’s much more than 50% above their salary – broken down hourly. This is mainly because of you pay far larger share of health care and retirement cost, that you don’t get with contingent. But also because you’re going to end up paying what you are currently paying in house for talent – when the market has been depressed for two years – and you can get better talent cheaper. But as Corp HR you aren’t going to bring someone in with same experience and pay them less than someone sitting next to them doing the same job.
2. Using contingent gives you the test drive – and ability to ensure you make a good hire when you do pull the string to make them a part of the family.
3. If you’re truly scared your business might not be back – do you really want to put your culture through more layoffs?
So – in this labor market the choice of using contingent has to be further considered as a strategy.
A good contingency firm will deliver the best ROI. You only pay when and if the offer is extended and accepted. (Pay for performance). The candidate is guaranteed to perform. A good contingency firm is able to attract top talent through a stable of strong clients. We promote a competitive hiring environment, like types attract and bang; your company gets top talent. The current cost per hire reduction focus is not driving business performance. Spend wisely and for a return. Utilize two or three firms and increase competition. Competition raises the bar. Don’t be scared.
Can tell that you are not from the Bay Area…
1.) I thought that most corporate recruiters were contractors
2.) With Google, Facebook and Cisco sucking up so many recruiters, openings are becoming more plentiful.
3.) Contract recruiters make a ton of money, and many never want to convert.
If you have several hires to make, remember that if one contractor can make 5 placements, they have paid for themselves for the year vs. agencies so once they make the 6th placement and you are money in the bank.
Until you are sure you want to make the hires fulltime, utilizing a staffing firm is a great option. You can use the people on a temporary basis and, once you’re ready to hire, bring them on fulltime. That’s the way a lot of our clients are easing into hiring without takign the plunge. If that day never comes, or you have to reduce staff, it’s a much easier proposition when they are temporaries. Just make sure you have a clause that allows you to hire the person without a buyout fee (usually after a certain period of time).
Yes, you pay a mark-up, but considering the expenses and risks you are offloading onto the staffing firm, it’s often a pretty good deal.
Kris, I’m sure you know this, but I wanted to mention it for readers who may be considering your suggestion. It’s a great idea, just make sure those contract recruiters are truly working independently!
When using a contractor, be sure they are truly treated as an independent contractor (they are working on their hours and their terms, truly running their own business with both risk and reward, have other clients and market their services, etc).
It’s tempting to handle someone as a contractor for many many reasons, but with the push to crack down on “misclassified employees” at federal and state levels, it’s really not worth it. If a contract recruiter is sitting right next to your fulltime recruiter, working in the same location, doing the same work, using your equipment and acting like a member of your team, they very well could be classified as an employee regardless of your arrangement.
and a slight deviation from the headhunter (contingency or retained) option, is RPO. might make sense for some organizations to forget about rebuilding their recruitment function in house at all and think about giving it up entirely to someone else.
Charlie makes a great point (and I’m not just saying this because I work for a company that provides RPO services). RPO by way of on-demand project recruiting, or a long-term outsourced partnership, could be a great way to solve some of the problems mentioned above.
I recently drafted a similar post over on The Seamless Workforce about the recruiting options for companies that have made significant internal cuts and now have the need to hire. (If interested, http://blog.yoh.com/2010/05/how-to-recruit-and-hire-in-2010.html).
A business contingency plan and to Provide the best return on investment. You pay only if and when to offer an extended WAS and accepted. Guaranteed to pay it the contingency plan for the company performance. Can performed. good ATTRACT candidate Customers with powerful sound. Promote a Competitive environment for recruitment to ATTRACT the types and bang, your company Must Employ the price-reduction approach top talent. Conducting business is Current. Spend wisely, and return. Use two or three companies and Increase competition. Competition raises the bar. Do not be afraid.