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Why is Recruitment so expensive?

Is it the shiny new offices? The huge pay packets? Keeping the owners / directors in new sports cars and luxury holidays? What is it that makes recruitment so expensive? It’s hard to be sure. Whilst the preceding list is a little tongue in cheek, there is no doubt that’s how the recruitment industry is perceived. Here at YPP we believe that recruitment is too expensive, but that the problem is working on a contingency basis.

Let me elaborate. Working on a contingency basis means that you only need to pay the recruiter when someone is placed in the role and starts. If you’re smart you can get several recruiters all working on your vacancy and then only pay the one who is successful. Brilliant right? All that expertise for free and only one fee to pay. Lucky you. You’ve managed to outsmart the parasites!! WELL, not really and you’re only adding to the problem, not even thinking about the problems and stress of having several recruiters all trying to convince you that they have the best candidate.

Working on a contingency basis means that the recruiter only gets paid when they place someone. Sounds like a good deal for the employer. However, the reality is that it’s become a bad deal, and this is why…

Let’s think of it from the recruiters point of view and you’ll start to see how that impacts on the fee structure and quality of the recruitment process. As a recruiter you do lots of work that you don’t get paid on. This means that fees inevitably have to go up to compensate for all the work that gets done that doesn’t lead to any recompense. So in essence by choosing contingency recruitment you are paying them not only for the costs related to your hire, but also for all the costs related to all the hires they were unable to make. See where I’m going with this? 

Why is Recruitment so expensive?
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The quality of recruitment also suffers. If you know a significant amount of your work will not result in being paid, you will take on more and more in the hope of seeing a fee or two. This leads to a drop in quality as recruiters have to play a ‘numbers game’ and basically get as many CV’s as possible to as many clients as possible to increase their chances of being paid. This has led to many recruiters KPI’s (Key Performance Indicators) to be based around metrics such as how many CV’s they send. Hence the race to the bottom in terms of service. 

Ever wondered why you receive CV’s that were unsolicited, or don’t match the job description? Probably a recruiter desperate to get their number of CV’s sent up so they could hit their KPI.

Here at YPP we refuse to work on contingency. We appreciate that it works for some, but we prefer to keep our fees low and our quality high. Our team of consultants are judged on their knowledge and professionalism and the most important metric of all – customer satisfaction.

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