Why are headhunters so expensive?

THE QUESTION

I've been working with my human resources people for some time, because recruitment is a major problem for us. We're in a competitive industry, and finding and retaining the right talent is a top concern. Our compensation and benefits are on par, if not better, than our competitors, but we just can't seem to find the right people.

We're frustrated but recognize the status quo isn't serving our needs. I want to try something different and I've looked into hiring an external recruiter, but they are cost prohibitive. We cannot justify additional recruitment expenses when we already have an in-house recruiter. Why are recruiters so expensive? Do you have any advice on something else that I can do?

THE ANSWER

There is a recruitment-industry term called "post and pray" that refers to an age-old practice where organizations post a job, and then pray that the right talent applies for the position. Despite advancements in technology and social media, in most hiring processes companies still rely on this method.

This approach, however, reaches only a small portion of your potential talent pool, specifically "active" candidates who are either unemployed or dissatisfied with their jobs.

So when your status quo isn't delivering, you are right to explore new avenues, and hiring a good external recruiter could be worthwhile, despite the added cost.

This is because an external recruiter can do something that your in-house recruiter is unable to do: reach out directly to employed personnel, even those who work for your competitors. External recruiters serve as a liaison between a job candidate and a hiring company. They invest considerable time into building strong candidate networks, so they can create a "prospects list" and actively contact people to pitch a job posting.

In these direct pitches, external recruiters can share insights about the job and the company beyond what a job description communicates.

There is great business value in this hiring approach because sometimes the industry's best talent are among this "passive" group. External recruiters' fees reflect this value as they bring unique skills, abilities and exclusive access to the table.

To get management approval for an external recruiter's costs, it's important to present solid business calculations. For example, how much are your vacant positions currently costing the business? If you filled these positions with the right talent, how much would your business productivity and sales grow? Through these figures, a recruiter's costs can often deliver a compelling return on investment.

Moreover, if you hire a recruiter on a contingency basis, you will not be billed until he or she has successfully filled a vacant role. If a recruiter is unable to fill the position, the hiring company will not be charged any fees.

If an external recruiter is not viable, there are some things you can do in-house to improve your chances of finding the right candidates. Consider promoting your posting within your office's local neighbourhood. Location often motivates time-starved candidates to change jobs if it means they will be closer to home. Less travel time and greater work-life balance are hard to beat.

Are your current job descriptions a little less than inspiring, listing only required skills and qualifications? Revamp them to reflect your unique office culture. Most people don't jump from one job to another for a small monetary increase or even an extra week's vacation, but they are more apt to change if it means they will enjoy their job among like-minded colleagues.

Last but not least, invest time in promoting your company brand through social media. Let potential job candidates know what differentiates you from other employers. While this is a long-term strategy, it will greatly increase your chances of being noticed by your target talent pool.

Julie Labrie is the president of BlueSky Personnel Solutions in Toronto.

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