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Recruitment Agencies – Are they a necessary evil?

Recruitment Agencies – Are they a necessary evil?

Many contractors hold the view that recruitment agencies don’t provide value for money. Well this can be true of some agencies however using a good agency to secure a contract can be very cost effective.As a contractor there are two ways to find a contract

  • Using a recruitment agency
  • Finding a contract for yourself

What’s involved in finding a contract for yourself.

Firstly, you need to find time to research the companies with contract opportunities that suit your skill sets which means trawling through umpteen job sites and job boards and knowing where to look.

If you are already in a contract and looking for your next one then it’s very difficult to find the time in the working day while you’re at the client site to cold call HR departments of potential clients, after all you are getting paid by the hour by your current client and they are not going to be very happy if your phone is glued to your ear all day or sneaking off to the corridor every ten minutes.

If you have no experience in selling then it can be a daunting prospect. You may be an expert in the field that you’re in but are you an expert sales person?

The biggest challenge is developing contacts. These days the majority of HR departments in multi-national companies have preferred supplier agreements with agencies and will only take on a candidate if they come through one of the agencies on their preferred supplier list and therefore they won’t even entertain an individual approaching them direct – ‘If you’re name is not on the list you can’t come in’.

So why use a Recruitment Agency?

You can look at recruitment agencies as your sales force, working for you on a commission basis. The nature of the recruitment agency business model is to make money by being paid commission for successfully placing candidates with clients, so it’s in their financial interest to find you a contract as quickly as possible.

The agencies spend a lot of time and money in developing contacts and building relationships with clients. They compete with each other to get on preferred supplier lists of clients which involves a lot of wining and dining and jumping through hoops.

Clients also want the security that if a candidate doesn’t work out then the agency is obliged to find another with the relevant skills. It may be possible to earn more money if you sourced your own contract and missed out the ‘middle man’.

However, what you have to ask yourself is whether you have

  • The contacts
  • The sales expertise
  • The time
  • The knowledge

Even if you managed to by-pass the preferred supplier lists it could take months for you to find a contract on your own, during which time you probably won’t be earning money. The time being out of a contract looking for a new one could well be more costly than the margin the experts at a recruitment agency charge their client.

By diptesh on May 10, 2011


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