Agency or headhunter?

This article will benefit Business Owners, MDs and CEOs and anyone involved in selecting the right people to help growing and changing organisations. This article covers both internal and external selection, recruitment and promotions.

Please be aware that this section delivers guidance, best practice and know how. It is ultimately your responsibility to ensure compliance with local laws and employment regulation. Qualified legal advisers are available on request.

Insight into recruitment agencies

A Recruiting Agency is more commonly used where candidates can come to register. The agency is typically paid on a contingency basis so they only receive a fee once the candidate joins. They therefore spend minimum time up front finding out about the job and will usually expect you (the client) to supply the job specification. Fees are usually a percentage of the candidate’s starting annual salary and can vary; 15 – 20% is common.

Generally agencies maintain a database of candidates actively job seeking which they search on behalf of a client along with advertising. They tend to send as many CVs as they can; hoping one will fit the bill. Frequently, candidates have registered with multiple agencies. This can get quite confusing as you will often end up with the same candidates from differing sources.

If a candidate leaves within a set time frame, around eight weeks is the norm, a rebate based on a sliding scale is applied. You can end up out of pocket and still with a gap!

Some agencies are specialist, focusing on recruiting within a particular industry or expertise such as IT, Web Design, SEO etc.

Benefits of using an agency

  • Wide reach will deliver a wide choice
  • No result no fee
Be aware of

  • Despite what they may tell you, for them it’s  the numbers game. Quality and suitably of the candidate will be down to you and your team
  • They won’t like the application process detailed in this portal because it reduces the numbers of their candidates put in front of you
  • They tend to attract people looking for a job. The person you need may be in a job and not be on the market

Insight into Head Hunters

A Headhunt / Search and Selection Consultancy works on a much more consultancy based approach. The recruitment consultant is paid to proactively approach the market to source candidates specifically for the client’s requirement and are usually retained to do this. This means the consultant will spend a good deal of time up front with the client finding out about the role, the client – including culture, the people etc.

The consultant will help draft the job and candidate specification and work with the client through the recruitment process right up to and including the job offer and will then handle the rejection letters for unsuccessful candidates. Personality Profiling and Psychometric Testing is often used to improve success.

The fee is usually a percentage of the candidate’s starting annual salary, something around 30% is usual, paid in stages: the first part as a retainer, on production of a short-list and on placement.

Headhunting is mainly used for more senior positions or where there is a skills shortage. Head hunters use a variety of methods to find candidates, often targeting people in competitor organisations, but depending on the role will look elsewhere, use social media etc. sometimes supported by selective advertising.

Guarantees of performance usually mean the consultant will replace the candidate if they leave within a set period, something like six months is acceptable and of course the stage payments are only made based on acceptable delivery.

Benefits of using a Head Hunter

  • Specialist research on your behalf
  • Usually highly skilled at selection and effective
  • Good at finding people who maybe were not looking for a job
Be aware of

  • Can be costly and you have to make payments up front
  • They can only be as good as the brief you prepare for them. See our guide to people selection for further insight

So, do you want to use a scatter gun approach and you do all of the selection work or run a targeted recruitment campaign where you outsource much of the work – the choice is yours!

Planning and Strategy
About Transmentum
Transmentum are a specialist business working with growing IT, technology and software companies in the managed services industry.. With a proven track record of helping businesses to grow business revenues, profits, skills, and people, Transmentum add value to those who are building a recurring revenue model – including those who aspire to move into the Cloud or develop their own managed service propositions.