Pay Cheap, Pay Twice (Or More)

Pay Cheap, Pay Twice (Or More)

I went to a human resources seminar the other day – the usual type of thing, people from differing backgrounds and disciplines giving their points of view on varying HR matters.  One topic that always crops up, of course, and which is dear to my heart, is recruitment.  But to my surprise, instead of the recruiter on the panel going on about the best way to recruit this or that person, the star of the show – in my mind – was the brave HR manager who said that she was continually disappointed by contingency (success-based) recruitment companies.  Music to my ears!  Tell me more, I thought.

She went on to explain that her company didn’t just calculate the cost of recruiting someone simply by looking at the recruiter’s fee – which is almost always lower than a retained search company’s fee.  The HRM continued by saying that all costs of recruitment were taken into account: HR’s time processing the candidate; line managers’ time interviewing the candidate; any other internal meetings that needed to be held; and then the recruiter’s fee and anything else.

That, in itself still didn’t (and doesn’t) sound compelling.  What clinched it for me was that she then delivered the bombshell: their data showed that contingency recruited candidates were three times more likely to leave than those recruited via retained search.  What?  I almost fell off my chair.  So she was saying that basically contingency recruitment was three times more expensive than it looks at first glance.  In my mind I started to re-write our marketing pitch, this was great news.

Many of us think that we have all the salient points covered; we understand the costs of doing this or that.  But here was a real life, concrete example of significant additional costs that are not always factored in when choosing the method of recruitment.  There’s a simple mantra that we all know: pay cheap pay twice.  On this occasion it seems that it should be: pay cheap pay thrice, or three times if you prefer.

I can tell you, hearing that made my day.  Now all I have to do is to outline that HR manager’s story to our prospective clients and to get them to believe it too.  It’s exactly the kind of convincing argument that helps us to engage with the best clients and bring them the best candidates.  That kind of supportive and understanding relationship is recruitment gold.

As usual, let me know if you have any particular topic you would like to see covered here.

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