Increasingly, companies are taking into account the services offered by recruiting companies as part of their business strategy. It is becoming more and more apparent that in most cases not using a recruitment firm put a company at a clear disadvantage.

Cost to Company

If you are a company whose recruiting needs are with the regular range and are not excessively high, the first major disadvantage of not using an executive recruitment agency is the high cost of maintaining an in house recruitment department. While recruitment firms charge in the range of 10% to 35% of candidate’s annual Cost To Company for the first year, it is still only a one time cost and far less than the cost of running your own recruiting department. On the other hand, the services provided by executive recruitment agencies will ensure that your senior managers do not get involved in the task of sifting through resumes and screening of candidates, but are only involved in the evaluation and interview stage. This can also have huge monetary repercussion on the bottom line of a company.

The ‘No Poaching’ Clause

When a company hires an executive recruitment agency to fulfill its recruiting needs, the recruitment firm agrees to not poach people from that company for the duration of the contract. This means that the recruitment firm will not recommend employees from your company to other firms within the industry. However, if you do not work with any recruitment firm, you are leaving the employees of your company exposed to the poaching from them. This, of course, does not mean that you sign a contract with every recruitment firm in your vicinity, but it would be prudent to have the market leaders within your industry on your side.

Industry Knowledge and Gossip

Recruitment firms are in constant touch with a large number of candidates across any industry. They build strong personal relationship with candidates and are able to get a lot of industry information and gossip from them. This can be very useful for any company that hires an executive recruitment agency. For instance, if you have the inside knowledge that a particular department of a company is about to close down, you will know that the employees of that department will soon be looking for a job and their salary expectation may be highly negotiable given their position.

Confidentiality

This is another huge disadvantage faced by companies who do not want to use the services of recruitment firms. On one hand, every vacancy they have will be publicized and this could mean loss of reputation in the case of very senior level placements and also leaves the company at risk from competitor’s tactics to take advantage of this situation. If you use a recruitment firm, whether it is an executive search firm or a retained search firm, you can expect them to keep information of vacancies in your company confidential until after potential candidates have been screened and evaluated. On the other hand, hiring recruitment firms also helps attract those candidates for whom confidentiality is paramount.

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