How do you know if a recruiter’s good?
Don’t worry, they’ll tell you.
I billed this much. I placed that many. They’re not shy about their stats.
But here’s one you won’t hear a lot:
Cost per hire.
The metric that dare not speak its name.
Recruiters come with a fee. So straight away, you visualise a massive chunk of that cost per hire. It’s daunting. So they don’t mention it. They don’t wanna daunt you. They wanna schmooze you.
Most don’t like competing against the ostensibly cheaper “DIY” option. Recruiting yourself, in-house, you don’t have that immediately apparent cost per hire.
Same as anything. You do it yourself, it’s cheaper than getting in someone to do it, and therefore better. Or, at least, it seems better. But is it actually?
NB. You’re starting to think: this guy’s trying to sell me something here. I promise this isn’t that. Give me two more paragraphs.
Beyond the obvious.
Cost per hire isn’t just the obvious outlays, recruitment fees, etc. There’s the marketing costs – job boards, onboarding and compliance costs, things like travel expenses and background screenings.
It’s not even just about money. It’s things that equate to money. You have to factor in all the time spent recruiting when, realistically, that’s not your main job. The amount of time the position you’re hiring for isn’t getting done. That loss of productivity is costing you.
Even if you have an internal recruitment team, consider the time spent liaising with them. Their salaries and bonuses. They’re likely to be stretched working across multiple roles for your business, so there’s extra time.
So balking at a fee because it looks big on paper, but being less scared of all the smaller costs that add up, can be problematic. Ideally, you’d have a system to measure your cost per hire. With a solid figure in mind, it’ll be a lot easier to make recruiting decisions.
And your first instinct will probably be, “well, I’ll pick the cheapest”.
One more paragraph. Still not selling.
Cheaper doesn't mean better.
But!
Cost isn’t value. Lower cost per hire doesn’t necessarily mean better.
Remember Phillip Schofield with We Buy Any Car giving it the whole:
“Yeah, we’ll pay you less for your car than you might get privately. But do you really want to waste 20 hours of your life selling it yourself?”
(I’m paraphrasing there).
Maybe he’s not the best role model, but he had a point.
Personally, I’d rather get a plumber to fix my pipes, and know it’s been done right, even with a fee attached, than spend a fortune in Wickes, hours on YouTube tutorials, and still probably knacker it and scald myself in the process. That’s the value, to me.
It’s less quantifiable. It’s a feeling. But you can still factor it in to your cost per hire considerations.
It can be the same with recruitment. A third-party taking most of the sourcing and negotiation processes off your hands. That could be value to you, and might justify a higher cost per hire if done right.
So, use a third-party recruiter, and fees are a good, visible percentage of your cost per hire. But that’s as it should be. If they’re any good, it shouldn’t be cheap, and they should be transparent about it.
Here’s why I’m not selling you anything:
I’m not saying, “use a recruiter (i.e. me), it’s better”.
There’s literally no saying what’s better. Just depends what’s important to you.
But at least now, hopefully, you’ll be thinking about it.
Wanna talk about getting your cost per hire down? Book a call in with me at a time that suits you.