Ever heard of shortlisting?
For those reading this who aren’t recruitment professionals,h ave you ever wondered how a recruitment consultant or agent gets paid? They only receive a commission on placing a candidate. Recruiters have a very challenging service to deliver, even in the face of extreme risk.
Three problems with the current recruitment service
Yet, crucially, earning commission on a placement incentivises the recruiter to think only about making the deal and not on what the company or job seeker really want. In other words, just as with property agents, if the deal doesn’t happen, they don’t get paid, which means from the get-go they are not as interested in the candidate or the company’s needs as they are in making the placement. The words “forcing a square peg in a round hole” are probably heard daily in the halls of recruitment firms.
In a similar vein, companies don’t really want to pay recruiters to handle the candidates after they have been presented with their CVs. After all, they are best suited to organising interviews with the chosen applicants and taking them through the rest of the recruitment process (provided the company has qualified staff).
In other words, recruitment agents take on a lot of risk, job seekers don’t always have their interests looked after and companies don’t want to pay for things they can do themselves.
Shortlisting as a solution
There is a form of recruitment service that solves all three of these problems. It’s called shortlisting and simply consists of a recruiter taking on an assigned vacancy, finding a defined number of suitable applicants and submitting a shortlist to the company, getting paid all of their fee right away. Thereafter, the company can hire all or none of the shortlisted candidates at no extra cost.
The recruiter has their payment (which is non-refundable) and accepts none of the many risks associated with higher fees: not placing the position after many months of hard work, having the placed candidate leave within the guarantee period, etc. The recruiter has thus solved the company’s problem by finding a list of candidates, something that the company either couldn’t do or was prepared to pay for. And what’s more – the recruiter has banked revenue without cash-flow concerns and writing a credit note (to an unhappy client) later. I’d venture to say that the risk linked to the extra amount on contingency-based placement fees is not worth the extra cash.
No shortlisters in South Africa
Since this blog is based in South Africa (yet has a global focus), I’ll take a little time to express my dismay at the fact that I could not find one recruitment company online that does shortlisting exclusively. I’m sure almost every single recruiter will accept an assignment from a company that requests a shortlist, but none ever offer this as a service. It seems that it is up to companies to request it for the change to occur.
Other industries offer “halfway” services for potential clients who can handle some of the process themselves (think of a car wash with their various options). My advice to recruitment companies would be to offer a few extra pricing options over a fair spread of services additions. Gone are the days where recruitment agencies can simply charge a percentage on annual salary equal to a cash value (way beyond what their services are actually worth) to one client, to make up for failed placements at another client.
In closing, shortlisting is a great option for a recruitment company and some firms would probably appreciate the choice of being able to run the rest of the recruitment process their way without a third party. If you own a recruitment firm, you should try this variant with those companies you cannot bring on board – they may well be interested.