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  • Writer's pictureDan Malkoun

DIY recruitment vs agency


Cost of DIY Recruitment vs. Using an Agency: Are Agencies Still Expensive?


Recruiting the right talent is a critical process for any organization. When it comes to filling a vacancy, companies often face the dilemma of choosing between DIY recruitment or partnering with a recruitment agency. In this article, we will compare the costs associated with both approaches using an example of a vacancy with a salary of £30K per annum and a fee structure of 15%. We will explore the advantages an agency can offer, debunking the notion that agencies are expensive.


DIY Recruitment:

When opting for DIY recruitment, companies rely on their internal resources and dedicate management time to act as internal recruiters. This entails various tasks such as writing and agreeing on the person specification, advertising the position, engaging with direct posting media, and utilizing professional sourcing sites.

Additionally, there is the need to conduct shortlisting, schedule interviews, make hiring decisions, and complete the hiring process, including rejection and offer letters. All these activities require a conservative estimate of around three weeks of management time, costing approximately £3.5K.

Moreover, companies need to consider the cost of advertising collateral, further adding to the expenses. By the time all these efforts are accounted for, the cost of a DIY recruitment process can easily reach £4.5K, which is equivalent to the cost of an agency fee. However, it's essential to note that this cost is merely the tip of the iceberg.

If the process proves flawed, inefficient, or excessively time-consuming, companies may risk losing preferred candidates and have to start the process again, effectively doubling the cost. In the best-case scenario, a suitable candidate may be found at the same cost as using an agency. However, in the worst case, no suitable candidate is found, leading to either restarting the process or making a bad hire, further increasing costs.


Using a Recruitment Agency:

Contrary to popular belief, recruitment agencies offer significant value and can be a cost-effective solution for organizations. Here's why:


1. Market Intelligence and Expertise: Recruitment agencies possess current market intelligence and a deep understanding of the challenges within your sector. They can effectively promote your brand against competitors, ensuring you attract the best talent available.


2. Wider Outreach: Agencies have access to an extensive network and multiple candidate sourcing channels, providing a wider pool of potential candidates. This significantly increases the chances of finding the right person for the job.


3. Efficient Process: By leveraging their expertise, agencies can streamline the recruitment process, reducing the time it takes to fill the vacancy. They handle all administrative tasks, allowing line managers to focus on their core responsibilities.


4. Technology and Resources: Reputable agencies invest in cutting-edge recruitment technology and resources, enabling them to identify and connect with top talent efficiently.


5. Cost Savings: Perhaps the most compelling aspect is that if you don't hire a candidate referred by the agency, you don't pay anything. This eliminates financial risk and ensures that fees are only incurred upon successful placement.


Conclusion:

When comparing the costs of DIY recruitment and using an agency, it becomes evident that agencies offer valuable services that can lead to cost savings in the long run. While the initial agency fee might seem comparable to the costs of a DIY approach, the additional benefits, including market intelligence, wider outreach, streamlined processes, and access to top talent, make agencies a cost-effective choice.

Organizations can benefit from the expertise of agencies, especially when dealing with critical positions or specialized roles. By partnering with a reputable agency, businesses can ensure a more efficient recruitment process, reduce the risk of bad hires, and ultimately save valuable time and resources.

So, are agencies still expensive? The answer lies in weighing the potential costs and benefits. When considering the holistic impact on your organization, recruitment agencies often emerge as the better option.

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