How flat fee recruitment works and why it doesnt work

Flat fee recruitment can take various forms but essentially what it means is you will pay a fixed fee to a recruitment agency and they will perform various tasks to assist you with recruitment.  If the fee is very low, it might be the case that they will advertise your vacancy and forward you the responses.  For a slightly higher fee, they might review the applications and only send you the stronger ones.  And for a slightly higher fee again, they will discuss the vacancy with suitable candidates and perform a fairly basic recruitment service.

Flat fee recruitment issues

Unfortunately, none of this guarantees that you will find the right person for your role.  Flat fee offers a false economy – there’s a good chance that the outcome will be that you will recruit someone for your team, but nothing to ensure that they are the right person with the right skills that will stick around for the duration. And what happens then?  You replace them, pay another flat fee, offer the job to another unexceptional candidate… and the cycle continues.

With this in mind, we’ve put together three questions you should ask before engaging with a recruiter offering a flat fee service.

How important is it that you get the right person on board?

If your role does not require niche skills and the most important thing is to get a body in place quickly, there’s a good chance that a flat fee agency can help you.  But you could just as easily advertise the role on your own website, or on, your company’s LinkedIn page, or purchase a one-off ad on one of the online job boards.  If your role requires niche skills, you must bear in mind that the best candidates won’t necessarily apply for the role – they might not even be actively looking for a job.  The agency might have to go looking for them, and even head hunt them – a service that probably seems expensive until you consider the potential costs to your business of employing the wrong person.

What service do you expect?

Even agencies that provide a fairly basic service still ought to provide a thorough telephone screening of candidates, in which they assess their suitability for your role and inform the candidate about your company and what will be required of them.  This is important as it gives them a chance to filter out candidates that don’t have the skills or those that aren’t interested in working in your particular sector.  Bear in mind that fixed fee recruitment is only made possible by stripping the service back – ultimately the agency still has to cover the salary of the consultant that does the work, but they still need to turn a profit.  So you might not even get this basic service.  Our advice is to clarify exactly what you can expect for your fee – if it sounds too good to be true, it probably is.

What guarantee is there?

You might think ‘there’s never really a guarantee, is there?’ but decent agencies that do a thorough job will usually put something in the terms and conditions whereby you will have some comeback if the placement doesn’t work out.  But this guarantee is also their stamp of quality – they know that their process is thorough, and have no doubt that they will find the right person for you.  Yes, it does cost more – the right person can be hard to find.  They’ll spend time talking to a lot of almost-right candidates, testing them, interviewing them, and networking with them.  They’ll spend time searching on databases and engaging with people through social media.  But the candidates that they put forward will be strong contenders – they will be well prepared, technically capable and most importantly they will know your business inside out and will want to come and work for you.

Every business wants to cut costs and we can’t deny that paying substantially less for recruitment seems very appealing.  But remember what you are paying for – a lower fee offers a poorer service, less expertise and a good deal less time being spent on your requirement, probably by consultants that are being rewarded considerably less for their efforts than those that don’t work on a flat fee.  The future of your business is at stake – don’t be fooled.