Some Perm Recruiters are Cheaper Than Other Recruiters (Why?)

How is it that one recruiter charges 10% for permanent hires, when another charges 25%?

They supply the same product – people. So what is driving the price?

Now, we’ve met a fair few clients who have told us – “we work with other recruiters and they’re working to 10%”, and our reply is that they’re not really working, are they.

Not at that price.

Here’s what happens when a recruiter takes on a client at 10%…

  • They put you at the bottom of the pile, as they likely have clients paying 15% or 20%
  • You get a job ad pumped out to job boards and an email blast from their database
  • If anything turns up, they’ll send it on
  • However, if a client paying a higher rate matches, that client will get preference

If that sounds like the recruiter’s taking the piss, well it’s a business model, and if they’ve got enough business development to make it work, then 10% gives them small margins at high volumes. Commercially speaking, it can make sense if they do relatively little work.

Don’t blame the recruiter, by the way. They’re just trying to make some money, but the price is driving down the level of service, you’ll likely be account-managed by a junior recruiter with no business experience beyond recruiting, and the outcome is that they usually fill one in every five roles they take on.

They also know that – if you’re paying 10% – you probably have multiple recruiters on board. And all of those recruiters are doing the same thing – job boards and database searches. Your level of representation will be low, and they’ll probably all be receiving the same CVs.

That’s not how we work. Our fees are nice and clear, and you can read all about them here. The price represents the work, and many other recruiters across different industries follow a similar model, at a similar price.

When you pay a recruiter 20% or 25%, you tend to get a better level of service and therefore, a better level of product (candidate).

  • These recruiters often network with their candidate base as they’re specialist, so they often have people in mind for your roles already.
  • Some (like us) don’t use job ads – they headhunt from their extended network according to your precise brief. This means you often get candidates who are waiting to be headhunted, and are less likely to apply for roles directly.
  • A higher fee means higher scrutiny of candidates – for instance, we commit to screening every candidate, which we can do because we’ve usually done their jobs before, or we’ve line-managed people who do their jobs. Some do psychometric testing and that stuff.
  • A higher fee often means a higher investment in technology or licences, e.g. LinkedIn Recruiter Pro (instead of Lite) can cost circa £400/m per recruiter.
  • A higher fee often means a more senior recruiter – and in our case, senior recruiters with senior marketing experience
  • Their fill rate is going to be much higher than 1 in 5 – which is why they commit to putting in more effort.

So, you may get results using a 10% recruiter. Your chances are at best 1 in 5. Realistically, it’s around 1 in 20.

Your chances of getting a quality choice of candidates is much higher if you commit to paying a higher fee. For simple, commercial reasons.

Recruiters are running businesses to a profit, like any other – and their commitment is always going to be at the same level as yours.

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