Recruitment Agency Fees

Eliminating Costly Percentage-Based Recruitment Agency Fees

Before we started Harrison McMillan, we sat down and discussed the recruitment problems and challenges that were facing many of Adelaide’s organisations.  We knew they understood the importance of the recruitment process and finding the right people for their business, however, very few people had the time to facilitate the process, had access to top talent in the market or had the right level of recruitment expertise to do it well.

Additionally, employers were often telling us they rarely rely on external recruitment agencies due to the minimal value they felt they were receiving for the fees they were being charged and that they did not understand why the percentage-based recruitment agency fees were so high.  It became clear that this was the primary barrier for them when it came to partnering with an external recruitment provider.

This got us thinking, there must be a better way to provide clients access to cost effective recruitment expertise (without the burden of traditional recruitment costs), however, before we could come up with a solution to this, we needed to understand the problem in more detail.

Why Are Traditional Recruitment Agency Fees So High?

Firstly, traditional recruitment agency fees are entirely performance-based. This means, as a Hiring Manager, you do not need to pay the recruiter anything unless they successfully recruit an employee for your company. Although it might sound ideal, because it is outcome-based you have limited control or transparency over the process.  With agency fees typically in the vicinity of 10-25% of the salary of the person hired (assuming this averages out to around $10,000 – $20,000 per hire), you can start to see how recruitment costs quickly add up.

Secondly, the majority of organisations were engaging two or more agencies in an effort to “see what talent is out there”. In essence, this has the industry responding from a place of conflict.  What this means is that the recruiter has to choose whether to put in 100% effort knowing that they face the possibility of a competitor’s candidate being chosen instead.  Unfortunately, this has been creating a dynamic where quality of service can slip and due diligence and best practice processes are not always followed, leaving many employers questioning the value for money they receive.

A Transparent and Effective Pay-As-You-Go Alternative

From what we discovered, we knew for us to be able to add value to organisations through the recruitment process and provide a cost-effective solution, we had to eliminate the percentage-based placement fees model for our Adelaide-based business.  That’s right – we decided to totally eliminate it.

Instead, we provide employers an affordable yet effective outsourced recruitment solution, where we act as their internal recruitment team to assist with the task of facilitating a recruitment process to identify and hire the right people for their business.

We do this by offering our clients access to leading technology, processes and recruitment expertise. With hourly consulting rates and fixed cost service levels, you have the flexibility to select from a variety of recruitment services and only pay for what’s required.

So, has it been successful and are we glad we made the decision to change the way we partner with employers and eliminate the costly percentage-based recruitment agency fees? Absolutely! Our pricing model has assisted organisations in reducing their external recruitment spend and time commitment throughout the recruitment process, without compromising on quality. We have partnered with over 200 companies across Adelaide and the rest of Australia and they are telling us they feel our team of experienced recruitment partners are a genuine part of their business; a reliable source of regular expertise.

Closing Thoughts

If you’re concerned about how much traditional recruitment agencies charge or are looking to reduce recruitment costs and create efficiencies throughout the recruitment process, then it might be time to consider your options!  To find out more about our unique model, or for support with your Adelaide recruitment, don’t hesitate to get in touch with the Harrison McMillan team.