Search

Can recruiters be a cost benefit?



As a consultant, I like to think I am a trusted advisor to my clients. When speaking to businesses for the first time I hear various reasons on why you, the client, would prefer not to use a recruiter. It can be phrases such as ‘Agencies are too expensive’ or ‘It’s cheaper to do it ourselves’ or ‘We have an internal team’.


Most people who have a recruitment budget, will only look at a potential fee that they may have to pay a Recruiter as the cost. What if I said to you that this is not the true cost of recruitment? What would you say if I could prove to you that myself and my colleagues could actually save you money, leaving you more of your budget for other business requirements?


Now, I can hear the collective sighs and visualise the shaking of heads, but this is something that is based on fact, so please indulge me, and read on.


A short while ago, I was recruiting a Sales Manger for a new Technology client. They had been trying to find the right person themselves for two months, after the previous incumbent to the role had left to go to a competitor. This client told me that my fee meant my service was a ‘Luxury’ that they couldn’t afford. That was until I was able to illustrate what the actual cost to them of not having the right person in place was and what the benefit was of using a professional consultant. My client advertised the role at £40,000 and it is expected that the salary is multiplied by 3 to get the target for a Salesperson so in this case the target is £120,000 per year.


Illustration


£40,000 salary x 3 = £120,000 target

Or

£10,000 per month in lost revenue, that’s £2,500 per week in terms of costs for every week that this role was not filled.


Other cost factors to consider include. How long the role had been unfilled? The previous Sales Manager left two months prior to this, and the role has been left vacant since then, so this is had already cost my client £80k in potential lost revenue.


Time to recruit. How long has it taken / will take to screen, select, interview, manage the

offer process and then start the candidate, below are average times to hire according to?


The Industry average for a client who does the process themselves is 10-12 weeks.


The industry average for an In-house recruitment team to complete the process is

around 12-16 weeks.


A Recruitment Agency will typically complete the process in around six weeks.


My client was asking HR to find a candidate which took them away from their usual

activity’s duties.


Then consider how long it will take to the new recruit this person to full productivity. In most

roles, the first month is spent in training and then a further two months are needed to get

up to full speed. That’s another three months in potential costs.


Calculating all of the timeframes together gave my client you the true costs of not hiring the right person into the busines.


Illustration

Salary - £40,000 X 3 = £120,000 Target

£120,000 / 12 = £10,000 per month

£10,000 / 4 = £2,500 per week


Role Left unfilled for two months = £20,000


Time to hire from the point of conversation 10 weeks = £25,000

Three months to get fully trained and up to speed = £30,000


This means that the cost to the client could be £75,000.


What if I told you that a good consultant could cut these costs! Well, here’s how we can.


1. Imagine if I could reduce your time to fill the role to six weeks – a saving of £10,000.

2. What would you say if I could provide you with a better qualified candidate who could be up and running inside 4 weeks saving you a further £20,000.

3. This is already a saving of £30,000 and even with my fee of £8,000 this saved my client

£22,000.


As you can see, I managed to save my client money and we can do he same for you too. If you would like to know more about how we can help you, please contact me at

daniel.winer@talentpartnership.net

48 views0 comments