On average, recruiters only fill 1 out of 4 job orders when there is no retainer or exclusivity with their client (the hiring company).
It is also bemusing that highly skilled professionals are ‘OK’ with working incredibly hard and providing exceptional value and only getting paid for 25% of the work that they do.
Greg Savage
What Greg alludes to is the practice and business model of 90% of recruitment agencies.
The practice is commonly known as contingency recruiting. Here’s how it typically works:
Recruitment agencies agree to work on filling a job position for a client (hiring company), but they do so under the condition that they will only be paid a fee if the client hires a candidate that the agency presents.
- Why do recruiters keep on taking job orders without telling the clients that in 3 of 4 job assignments, they do not deliver candidates?
- How can an agency recruitment consultant manage to work on 10 or up to 40 jobs every day? You get the picture?
- Why are clients kept in the dark, waiting forever to get candidates? Clients will have wasted weeks or months and what has this cost them?
If recruitment was a consumer product, this bizarre practice would long ago have been a case for the Office of Consumer Protection.
Potential issues when recruiter is paid on success
Quality of Candidates: Agencies might prioritize quantity over quality because their compensation depends on placing someone, regardless of whether they are the best fit.
Pressure on Agencies: This model can incentivize agencies to rush the process and present candidates who may not be fully qualified, just to increase their chances of making a placement.
Client Relationships: It can strain the relationship between the agency and the client if the client is not receiving any candidates. Or the client feels inundated with resumes that don’t meet their expectations.
Impact on Candidates: Candidates might be contacted for positions that are not well-matched with their skills or career aspirations, leading to a poor candidate experience.
Lack of transparency: Candidates may not be informed that their profile is being submitted to multiple employers for the same position, potentially leading to confusion or miscommunication.
Ethical Concerns: This model can raise ethical questions about whether the recruitment agency is acting in the best interests of both the client and the candidates, or solely to maximize their own chances of earning a fee.
Multi-listed, contingent job-orders benefit no-one
While multi-listing contingent job orders may seem to offer clients a wider pool of candidates and agencies a chance to compete, it often results in inefficiencies, reduced transparency, and potential conflicts of interest.
The client’s job may even be in the 75% of contingency jobs that are never worked on or never completed.
With no commitment from the client through a retainer (deposit up front) or an exclusivity agreement, it’s easy for a consultant to give up after a few hours of work. Of course, the client will never be told that no one is working on their job.
And no, recruitment agencies and firms no longer have their own unique database of candidates which may have been the case 20 years ago.
Clients, naively thinking they get a better service because they get agencies to compete, actually get a far worse service because they are actively encouraging recruiters to work on speed, instead of quality.
Greg Savage
Who is this guy, Greg Savage?
If you are in recruitment, HR or Talent Acquisition you should know or at least have heard of Greg Savage.
Unless you have lived under a rock for the last decade.
He is today’s version of recruitment influencers and teachers like Barb Bruno, Dr John Sullivan, Lou Adler and Steven Finkel.
To mention a few of my heroes who got me off on my recruitment journey 20 years ago.
With over four decades of experience, Greg has played a pivotal role in shaping the Asian and global recruitment landscape.
- He is renowned for his thought leadership and advocacy for innovation in recruitment practices.
- He is a prolific writer and blogger, sharing insights on his blog, The Savage Truth.
- He is known for his passionate advocacy for recruiters to embrace technology, social media, and modern recruitment strategies.
- He is in demand at conferences worldwide, where he shares his expertise on topics ranging from leadership and management to recruitment trends and industry insights.
- He is also a mentor and coach to many recruitment professionals, helping them navigate the challenges and opportunities in the evolving recruitment landscape.
Attention recruiters and TA people: If you are into life-long learning, and you better be, do check out his websites and subscribe to the free newsletter.
