Behind the Scenes of an IT Recruitment Agency
When establishing the company in 2015, apart from our experience in recruitment and the IT industry, we were also guided by the current situation in the labor market at that time. We have seen an ever-increasing global demand for people with technical skills, as well as challenges in hiring them. However, this article is not a story about how we developed our business, but about how working at a recruitment agency (such as Next Technology Professionals) looks from the inside out. We hope that we will be able to disenchant a few myths and thus convince that the role of the agency is not to bother IT specialists with messages on LinkedIn or to unjustifiably extract money from clients’ wallets😉
What is a recruitment agency?
In the simplest terms, a recruitment agency is an intermediary between a company that wants to hire someone and a job seeker. An internally conducted recruitment process can be very time-consuming, so agencies check CVs and talk to candidates who then meet with the company’s Hiring Manager. As a result, people responsible for the Human Resources department do not have to spend time attracting candidates and browsing tons of profiles and recruitment websites to find the few most suited employees who meet their expectations.
In our experience, in order to send 2–5 good CVs to a client, a recruiter often has to contact over 500 people.
As an agency, we value cooperation with the communicative employees of our client who, apart from being professionals, also have a nice personality. We like to work with companies that perceive the market and employees just like we do. For this reason, we never recommend unmatched candidates whose motivation is only to increase their current earnings, those who often change jobs or people who turned out to be unpleasant and demanding during the first contact. What matters to us is finding people with passion, who approach their duties with commitment. Due to the fact that we have open customers, at the beginning of cooperation, we talk very honestly about what their company looks like from the inside. This allows us to present information objectively to the candidate and avoid potential disappointments at a later stage. In addition, we never press candidates to make a decision, because we are aware that the recruitment process must be adjusted on both sides — putting pressure does not lead to success.
What does the recruitment agency measure?
To be sure that the recruitment agency is credible, it is worth getting acquainted with the metrics that are marked during the process. It is not only a source of interesting data, but also evidence of professionalism and effectiveness of the actions taken.
A few examples of indicators that we monitor in our analytics:
- Number of candidates contacted for a given position,
- Number of CVs sent vs the number of candidates invited to the first interview (this indicator measures whether our search is going in the right direction and whether the candidates are well matched),
- The time from the start of the commission to the candidate’s employment,
- The time our candidates work for the client.
What does the cooperation process with a recruitment agency look like?
The methods of negotiating and collecting fees differ between recruitment agencies and most often depend on the salary of the employee sought and whether the vacancy is temporary or permanent. Standard recruiting costs range from 15% to 20% of a candidate’s first annual salary, but for high-level or hard-to-fill positions, this can be as high as 30%.
While the fee charged by a recruiting agency may seem large at times, it is a cost that is also an investment, as in return appears the right person to suit your organization or a specific task. Additionally, the agency guarantees a quick candidate finding, and often the cost of the project’s delay due to lack of people or team frustration caused by too many tasks, can be many times higher.
The 3 most popular models of cooperation with a recruitment agency:
Success Fee Model — is a model that does not require a prepayment, but is based on paying the agency 100% at the end of the recruitment process. The invoice is most often issued when the candidate signs the contract or on the first day of his work.
Mixed Model (Semi-retainer) — prepayment is usually around 10–40% of the project value, and the remaining amount is paid by the client at the end of the project.
Retainer Model — usually divided into 3 (but you can also find solutions divided into 4) installments. The salary is paid to the agency after the completion of stages such as: starting the recruitment process, presenting the candidates and closing the process.
In the case of permanent recruitment, the process of cooperation with the agency may consist of the following steps:
1. A company that is looking for a qualified employee, contacts a consultant from the agency by phone or e-mail.
2. There are conversations about the client’s needs and requirements (it is also a space for consultation and sharing best practices due to the experience of people working in the agency).
3. After establishing the terms of cooperation, an interview with dedicated agency employees and an employee of the HR department (or Hiring Manager) is organized. At this stage, you usually learn more about the technology, project and team.
4. The process of searching for candidates begins. The most popular sources are internal databases (crucial in the case of urgent recruitments), LinkedIn and job portals. Our standard process is to send detailed feedback after 7 days of work on a given vacancy — thanks to this, the client is kept informed about the progress of the whole process.
In our internal database we have contact details of over 40,000 candidates.
5. The candidate’s first contact with the recruiter is in the form of text messages and a 30/45-minute telephone or video call. During the interview, the recruiter pays special attention to the candidate’s motivation to change jobs, acquired experience, technical and soft skills, matching with the team, financial expectations and their availability. After such selection, the candidate’s CV is sent to the client and then the responsibility for the next stages of the recruitment process lies on their side. The agency’s employees, however, keep an eye on the process all this time and are in constant contact with the candidate and his potential employer. The agency can also help in arranging appointments and the bidding process.
6. When both parties want to start cooperation, agency employees control the course of signing the contract and provide advice in case of any questions or doubts (e.g. regarding the form of employment).
7. However, the engagement of the recruitment agency does not end on the day the candidate starts working. Agencies that care about maintaining relationships and reassuring the client that the new employee will stay with the company for a longer period of time, operate on the so-called “Warranty” (usually 3 months). This means that the agency restarts the recruitment process free of charge, if either of the parties changes their mind and decides to terminate the cooperation within the warranty period.
Credibility of recruitment agencies
“Agencies are blowing the candidates’ rates on purpose, because with the increase in rates, their commissions in the success fee model increase.” — we happen to meet with such a statement, but in our opinion, it is a wrong accusation. This is best illustrated by a few examples:
Example 1: A company offered a candidate 22,000 PLN net under an employment contract. The candidate said that he would accept the offer, but only expected 500 PLN more to make it profitable for him to suspend his B2B activity. He did not receive this amount. Effect — rejected the offer.
Example 2: The candidate has provided financial expectations of 150 PLN/h at the market level, this is how much he received. Everything in the offer is fine, but in another one the project seems to be more interesting. Effect — rejected the offer.
Example 3: Candidate stated expectations are below the market rate and this is exactly what he received. Effect — he rejected the offer because another company offered him a market rate.
The role of the agency is that we talk to the candidate and know if he or she participates in other recruitment processes (and if so, at what stage they are). If the candidate has other offers, we know at what level, how he evaluates them and how willing he is to accept them. We inform clients about the candidate’s situation. Sometimes time is the key — first of all, you need to make an offer QUICKLY. At other times, it is important that the employer DOES NOT NEGOTIATE the candidate’s salary, i.e. offers him exactly what he expects. Yet another time, we recommend INCREASING THE AMOUNT, if we know that the candidate is considering offers at a higher level or, in his opinion, the project is more interesting, and we feel that he will reject the offer of an employer who really cares about hiring this particular candidate. Sometimes, however, DON’T CHANGE NOTHING — the candidate will accept the offer that is prepared for him.
The higher the amount, the greater the chances of accepting the offer. It is obvious! But increasing the budget is not easy. This requires the contact of an HR department employee with a Hiring Manager, who may be unavailable or reluctant to such a solution, so it is worth asking about it only when the situation is exceptional.
And what if, in our opinion, it is worth increasing the offer for the candidate, the employer will refuse, but the candidate will still accept the offer with the original, lower rate? What will the company/employer think about such advice? One time — he will forgive, the second time — he will end the cooperation. Nobody sensible will act and risk like that.
Or maybe it is better to send candidates immediately with an increased amount? This too (in the long run) is absurd. If the agency sends four expensive candidates with expectations above the market, and the company independently finds at least one at a similar factual level, but cheaper, thanks to the advertisement/network, it will hire this candidate. Or if an agency sends out deliberately expensive candidates, there will be another (companies usually cooperate with several agencies), which does not do that and the employer will hire its candidates. In both cases, the effect will be the same — an “expensive” agency operating in the success fee model will earn 0 PLN.
So the question is: who will devote at least 40 hours of recruiter’s work (more or less this amount is needed to send 3–5 good CVs) to earn maybe 10% more risking everything? It would be gambling🙂
Can you develop professionally in a recruitment agency?
People who are considering working in an agency, both as a recruiter and a business consultant, may have doubts as to whether they will be able to develop their professional wings in such conditions. Yes, such work can be monotonous — let’s face it, contacting several hundred people may turn out to be boring, but it does not have to be! In fact, every day looks different, because clients, recruitment projects and, most of all, contacted candidates differ from each other.
Every month, our company conducts technical training, during which all employees expand their knowledge in a specific IT area.
In addition to constant interpersonal interactions, in an IT recruitment agency, you can gain know-how from colleagues, as well as recruited specialists (e.g. regarding programming languages or frameworks that have been gaining popularity recently). If someone is curious about the world, open to new acquaintances and ambitious, working in an agency will surely be a good choice. Our current team members prove how much progress can be made in just a few months.
Before you start your career as an IT recruiter, it is important to understand that there is much more to this profession than just earning a high salary. In our agency, we always strongly support candidates in achieving success with our client, because we believe that a real recruiter cares about the candidate and supports him in professional development. However, you should also be aware that practicing this profession also presents many challenges. It is known that not all recruitment processes are easy, quick and pleasant, but they can take up to several weeks. In addition, the behavior of some candidates, such as ignoring messages, not answering phone calls or not showing up at scheduled meetings, show how much persistence and discipline one needs to have in order to be an effective recruiter. We wish the motivation that our recruiters have to all the readers!
So is it worth working with a recruitment agency in the IT industry? We leave it for individual assessment, but we hope that at least we have been able to reveal the secret of the functioning of recruitment agencies. The devil’s not as black as it is painted (by some people), right? 🙂
Originally published at https://nexttechnology.io on January 31, 2022.