”The most important asset at this company is its people”, “recruitment is the most important task out of all of your responsibilities” and “recruiting is the most important point of business, it could be the worst and by far the best deal you’d ever made”
We’ve all heard the comments.
We know of its importance, we know that recruitment can be expensive and that we most probably should spend even more time planning, executing and evaluating our recruitment processes than we currently do. Despite this, surprisingly enough (or as expected) it seems quite tough to give a straight answer to the question: what does a recruitment cost?
After having performed interviews with recruitment agencies all over northern Europe, we can easily determine that the industry is somewhat aligned in their responses. Over 60% of the interviewed agencies claimed that their average recruitment fee was between 2 and 3 times the role’s monthly salary. Reasonable?
Maybe, maybe not.
Neither me or Sekando are any better than the companies named above. It is not only hard, but most probably even point-blank wrong to give a generic and sweeping answer to the question of price of recruitment. What we on the other hand could do, is to compare it to the cost of a full blown in house process.
Given that you as a recruiting company hire a “Recruitment specialist” to handle the talent acquisition, it needs to complete at least 7,8 hires per year in order to make use of its salary cost. Needless to say, of course easier for some to reach than others, but given average salaries and price/recruitment it’s the simple truth.
Now – let us zoom out when we have comparable data. Between 2014 and 2018 the number of recruitment agencies in Sweden increased with more than 30%, and the net profit margins decreased with 8%, two key ratios which are correlated.
Since low barriers of entrance increases fragmentation, which decreases margins and leads to a harder choice of supplier for the customer, we figured that digital aggregation of the very same market could be a convenient tool in order to avoid the choice of supplier, and focus on the choice of candidate.
So – what is our answer?
It’s not our task to answer the question. Neither should the agencies.
The market should answer. You, as a customer, decide what’s reasonable. And if we by any means could help the market by increasing the pace of that process we believe that we bring what we should to the table.