How to Avoid Being Ripped Off By Employment Agencies

Don't Be Blind Because You Don't Know What You Don't Know

Recently, Business in Vancouver published an article expressing concern over the regulation of the Recruitment industry, or lack thereof. Various business owners shared stories detailing their negative experiences with Recruiters, which often highlighted that the candidate they hired through the agency had not been screened properly.

As a company who offers Recruitment services, the article was distressing to read, and while the stories were unfortunate, they open up the conversation as to how the industry can be improved upon.

Oftentimes, a company will have poor experiences with employment agencies and will swear off using them altogether. Not long after attempting to hire on their own, managers come to the realization that sourcing and recruiting top talent is a complex and time consuming process. Once again, they take a chance on another Recruitment agency and the cycle ensues.

Given the fact that managers who are tasked with hiring duties already have a full-time job, it is often unrealistic for them to take on the extensive process of sourcing top quality candidates. Many fail to understand that the process includes screening, scheduling, interviewing, reference checking, background checking, negotiating the offer, and even onboarding the person once they are hired. For the sourcing alone to be done properly, it needs a time commitment of 15 to 30 hours depending on the position.

Unsurprisingly, while many managers tasked with hiring become frustrated from one negative experience with a Recruitment agency, they soon come to understand that hiring for themselves is equally as frustrating and commonly only a temporary solution.

The question remains, what is the solution?

Fortunately, there are several ways to improve your chances of engaging with the right agency and having a positive experience:

Ask the right questions

• How long have you been in business?
• What is your guarantee like? (is it recurring? is it extendable? ... gauge how accountable they really are if the new-hire doesn't work out)
• What is your standard for reference checks? (if they use reference letters or reference from colleague/friend, just walk away ... For example, our standard is minimum of 2 references from recent Managers)

Ask the Recruiter to provide you a detailed report on completed references

• This should include contact information, so that you can call and ask additional questions if you choose
• Do not accept excuses about a Manager not returning calls.
  • The candidate should have multiple managers they can provide
  • If they were good to the manager, typically the manager will return the favor
  • No response can sometimes be a red flag.

Try to avoid retained searches

• Never agree to a retained search for non-executive level roles.
• Even for Senior level roles (Director and above), if the recruiter is creative enough, they'll offer a solution that works.
• For example, for executive recruits, TPD often works on a Contained model where there is no fee upfront and the client only pays once they have seen the high quality of sourced candidates.

Consider new Recruiting models (eg. 'Recruiting on Demand')

• The “Recruiting on Demand” model is transparent and allows you to see exactly what you are paying for (number of hours, advertising dollars spent, etc.)
• You can choose if you want to take on part of the Recruitment process yourself, like sourcing candidates.
• This model costs 45% to 65% less than the contingent model, and allows the Recruiter to truly look out for the employer's best interest, rather than trying to make the placement to close the deal and get a commission.

While the recent Business in Vancouver article included anecdotes that ranged from the unethical to the illegal, many Recruitment agencies are actually reputable and maintain long-term clients by providing reliable service and high quality candidates

At TPD, past clients have gone as far to say “I am not sure where you found her, but she is by far one of the best employees I have ever had”, and we have built a relationship of trust with them moving forward. Another candidate we placed as a Receptionist in an insurance company 8 years ago now handles our insurance needs as a broker with the same company. Evidently, it is possible for Recruitment agencies to operate ethically, and to prioritize the best interests of both the candidate and the client, rather than their own.

Utilizing the services of a Recruitment agency is an important decision, and there are pros and cons to all options available. Explore each one carefully and make your decision accordingly.

Interested in learning more about the cost of turnover, and the costs associated with recruiting a new employee? Check out one of our resources!