Six Reasons Why Companies Need a Recruitment Agency

In today’s dynamic business landscape, companies in search of talent for their teams find themselves in a peculiar quandary: despite widespread layoffs and a market teeming with highly skilled candidates from renowned startups and tech giants like F(M)AANG, their vacancies remain unfilled.

This overview explores the underlying reasons for this phenomenon, which, in some ways, mirror the reasons companies seek external recruitment support and go through a list of recruitment agencies.

#1. Internal Recruitment Challenges

Several factors contribute to the inefficacy of a company’s recruitment efforts:

• Lack of Dedicated Recruiters: Some companies do not have a recruiter on staff.
• Overwhelmed Internal Recruiters: Even when recruiters are available, they often lack the capacity to handle the volume of hiring requests due to the sheer scale of tasks or a lack of understanding of the job specifics. This mismatch leads to a flood of irrelevant applications and difficulties in assessing candidates accurately.
• Failure to Hire Despite Efforts: In cases where recruitment efforts are made, companies sometimes still fail to secure hires.

Compromising on candidate quality might seem tempting to expedite the hiring process, but lowering standards can detrimentally impact a company’s performance. Over time, it necessitates the replacement of these compromise hires, further exacerbating the issue.

Employing external recruiters can have a positive side effect on two critical HR metrics: staff turnover and retention. Better-matched employees with the requisite soft and hard skills, who align with your company’s values and culture, tend to stay longer.

#2. Need for Deep Expertise and Established Processes

• Leveraging Expertise and Systematic Approaches in Hiring: Many companies lack established hiring processes, making starting from scratch resource-intensive. Unlike ad-hoc vacancy postings, professional recruitment agencies possess a battle-tested, step-by-step hiring procedure that effectively identifies qualified candidates.
• Efficiency in Recruitment Processes: The initial search, screening, sorting of resumes, interviews, assessments, and shortlisting is a resource and time-intensive task. An external agency can streamline this process, presenting only those candidates who truly fit.
  Niche recruiting agencies, such as tech recruitment agencies, marketing recruitment agencies, or sales staffing agencies, are specialised and often yield the best results.
  Moreover, agencies have access to nuanced search strategies (especially sourcing in the post-X-Ray era) and passive candidates, capabilities that are critical for finding the perfect match, especially in specialised fields (e.g., niche tech recruitment for AI/ML/DS, Blockchain/Web3, etc.).
• Objective Candidate Evaluation: Agencies can offer an unbiased assessment of candidates based on their skills, experience, and qualifications, reducing biases in the hiring process and leveraging a data-driven approach essential in today’s landscape.

#3. Need for High-Caliber Specialised Roles

Navigating the recruitment landscape to fill specialised positions with high professional requirements can be a formidable challenge for many companies. This becomes particularly complex when seeking:

• niche talent;
• venturing into new industry fields without prior experience, or even pivoting your business;
• the roles in question are at the senior level—such as lead positions, architects, C-Level executive search, or even A-Players, “star” candidates who can act as brand ambassadors and key drivers of your company’s success. Often, leveraging personal networks or the company’s immediate resources may not suffice in attracting these top-tier professionals.

Turning to a recruitment agency that specialises in a specific sector can significantly streamline the process of identifying hard-to-find talent. These agencies possess a deep understanding of the technical stack relevant to tech recruitment, as well as the necessary hard and soft skills, and how to effectively assess these qualifications.

#4. Addressing Urgent Hiring Needs

In scenarios where time is of the essence, and a position needs to be filled posthaste, the stakes are exceptionally high. Rushed hiring processes are prone to errors, leading to costly mis-hires and further expenditures.

In such cases, delegating the task to professional recruiters can be a justified and strategic move. Top-tier recruitment agencies are often prepared to provide a list of pre-screened, qualified candidates within 24-36 hours, thanks to years spent cultivating networks of outstanding prospects.

This advantage enables access to “warm” candidates ready for interviews—a stark contrast to the cold outreach that often fails to elicit responses from high-caliber professionals, who are frequently contacted by recruiters.

#5. Entering New Markets and Geographies

Entering new markets poses its own set of challenges, including unfamiliarity with local nuances, cultural barriers, and the absence of a local network. Best recruitment agencies with a global presence and experience in various “zones of interest” can expedite the search in the required country, ensuring the vacancy is filled promptly and efficiently.

#6. Saving on Hiring Costs

The Cost Benefits of Agency Partnerships

In many instances, the costs associated with organising the hiring process in-house—such as purchasing expensive recruitment tools (paid LinkedIn packages, costly Applicant Tracking Systems, candidate management systems), and posting on premium job boards—are comparable, if not higher, than the fees for external recruiters.

The cost of recruitment agency services varies, but it typically takes the form of a percentage of the salary for the position being filled. Moreover, the payment mechanics in most cases favour the client. There are different schemes, but one of the safest involves payment upon actual hire, without any upfront fees or regular monthly payments.

Additionally, agencies usually possess the necessary tools and may have access to better partnership rates on platforms ranging from job boards and Applicant Tracking Systems (ATS) to participation in exclusive partner associations, which often require a substantial membership fee.

Utilising a recruitment agency means you only pay when you need a candidate. If your hiring needs are sporadic, an agency is likely the most cost-effective option.

Whether to use a recruitment agency often depends on the frequency and regularity of your hiring needs: continuous, high-volume hiring for large companies often necessitates an in-house team of recruiters and HR professionals. For targeted, occasional hiring, outsourcing to an agency is almost always advisable.

However, in terms of flexibility provided by external recruiters, it’s worth mentioning the intermediate, cost-effective hiring option. This occurs when you have a significant amount of recruitment (or talent acquisition) work, but it’s still feasible to forgo hiring a full-time team if you can find quality Recruitment Process Outsourcing (RPO) services. This approach takes on the bulk of the work and is still significantly more efficient than hiring full-time staff (considering the costs over 12 months per number of full-time positions).

In-House Recruitment Costs

Also, you should consider the overhead costs associated with in-house recruitment, including salaries, healthcare benefits, 401k pension plans (US example), sick leaves, vacation pay, and employer taxes. Additionally, it’s important not to forget about the expenses related to training and professional development for in-house recruiters.

To gain a clearer understanding, let’s examine the average annual salaries of Talent Acquisition specialists around the world:

In the United States:

• according to Glassdoor, the range is $61,000 to $91,000 per year.
• Levels.fyi provides further details:
• In the US, specifically in the Greater Seattle Area, the average recruiter salary is $139,000, ranging from $110,000 to $215,000.
• In San Francisco, the figure rises to $170,000, with a range from $130,000 to $246,000.

In Canada, recruiters can expect to earn an average of $84,501, with salaries ranging from $75,000 to $130,000.

The recruiter salary in the United Kingdom stands at $88,029, spanning from $73,860 to $136,400.

Other sources present slightly more modest figures:

In the US, according to ZipRecruiter:

According to Salary.com (US)

France, according to makesense: from EUR 35,000 to 75,000 (depending on experience).

Busting the Myth: Understanding the Value of Recruitment Agencies
There’s a prevailing bias that only an internal team can truly understand the company’s values, culture, and the ideal candidate for a position, assuming they are the best carriers of the Employer Branding message.

In reality, most of these concerns can be addressed in a 20-30 minute introductory call with a recruitment agency, where they gather essential information using a well-prepared template. If done correctly, this effectively resolves any potential issues.

Furthermore, for lesser-known businesses, partnering with a reputable recruitment agency can significantly enhance employer branding and reputation. Such a partnership can improve the company’s image as an employer, attract top talent, and boost its market reputation.

Conclusion: When to Consider External Recruitment Services

Engaging external recruiters becomes prudent when you need to fill positions quickly, or the role is complex or critical (e.g. executive search), and your internal resources are either insufficient or unavailable (due to lack of time, talent pool, market knowledge, or understanding of recruitment processes). By outsourcing recruitment, your company can focus on its core activities while the agency handles talent acquisition.

Deciding whether to utilise external recruitment services depends on your specific situation. Professional guidance can help identify the best approach for your needs.

It’s crucial to ensure that your recruitment partners are professional, experienced, and have a proven reputation. How to choose a strong recruitment partner will be discussed in future articles, highlighting the importance of making informed decisions in the partnership process.