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A Victorian member had a difficult experience with a recruitment agency earlier this year. To provide additional fodder for the discussion, I have invited a recruitment agency, Aquent, to provide a response to the issues he raises. What's your view on working with recruitment agencies?

I wish to draw to members attention to the flimsy nature of the Recruiting industry's guarantee on staff. It goes like this:

We give you a guarantee that if the candidate that you select does not work out for whatever reason, we will find you a replacement candidate free of charge.

I had a recent experience with a recruitment firm based in Melbourne. I paid $7,500 to recruit a sales person.

The sales person hired did not work out - and when a replacement was requested there was no call for 3 months - I had to call to check on progress. My studio was relying on finding a replacement person quickly - I communicated my urgency to the recruitment agency.

In the end it was obvious that they were not going to honour their guarantee and I requested a refund - partial - as they had failed in their guarantee.

The reply was:

You were late in paying the $7500 fee so there is no guarantee - not communicated on the 5 or 6 conversations previously whilst the quarantee period was valid.

You sounded a bit desperate (can't imagine why!) so I didn't want to put someone in that might not have a job there in 6 or 8 months!!!

and finally,

I think I've done enough, I'm not going to refund you any money.

The guarantee is worthless. If you're not sure on who you're hiring, don't rely on the integrity of the recruitment firm to honour their guarantee.

My advice is this: negotiate a deal where you pay 50% of the recruiting fees on hiring and the balance after the guarantee period has been successfully completed.

Terry Dear
1st Edition
Victoria

Dear Terry,

I am writing in response to your comments on recruitment firm's terms of trade and guarantees following your unsatisfactory (and costly) experience recently. Unfortunately, your experience is not unique and as I believe the tested adage that prevention is better than cure, I would like to share an 'insider's' perspective to assist hiring managers such as yourself to obtain value from recruitment firms. Working with Aquent in Sydney, part of the world's largest talent agency for creative and production professionals in print, web and new media areas, we receive daily feedback from clients and talent regarding their experiences and we seek to continually raise the professionalism in our own industry.

It appears the dissatisfaction you experienced regarding the guarantee that was not invoked (or clearly communicated once the initial candidate was identified as unsuitable), was compounded by the fact that 6 months down the track you still have a critical gap in your business that has not been filled. There are a number of key factors I would consider in selecting a recruitment firm, whether engaging them for a single assignment or ongoing partnering:

Review and discuss with your recruiter all terms of business up front and document any individual agreements. Terms of business of most recruitment firms can be negotiable for both one-off or long-term provision of services, including % fee on salary, length of guarantee, timeframe on agreed deliverables (eg. shortlist of candidates) and payment terms.

As is common in professional services (and other industries, like insurance), this guarantee is void if payment for services is not received within trading terms (typically 10-30 days). Investigate guarantees thoroughly. The standard three month probationary period provides what is considered a suitable period of time to integrate and assess a new employee. However, people are unpredictable by nature and you can expect to have to deal with a guarantee at some point as a hiring manager. Most firms do not provide for refunds if the first candidate is not successful. As costs have already been incurred in their search, they seek to minimise the risk of significant operational costs and ongoing business relationship by providing a replacement candidate or maintaining a credit (usually a % of the original fee paid) for future assignments. This arrangement is typically successful if you have had a good experience with the recruiter throughout the assignment and are confident in their commitment and ability to replace the position. It does not work as successfully if such a relationship has not been established. As this is knowledge you only gain in hindsight and the terms of business are negotiated with foresight, discuss all possible outcomes with recruiters before you agree to any other trading terms, particularly if it is your first experience with a recruitment firm (or even an individual recruiter).

Review policies of a number of firms and propose the terms you are most comfortable with to your selected provider for consideration. Aquent currently provides the most comprehensive money-back guarantee in Australia that can be used as a benchmark when reviewing standard trading terms with prospective recruitment partners. Aquent provide a 110% refund as standard terms. If a guarantee is invoked, you not only receive 100% of the original fee but an additional 10% for the inconvenience to your business when we are not able to deliver what we say we will deliver.

Minimise the number of recruiters you work withto get the best out of them. As recruitment firms work on a success fee, they will typically apply greatest efforts and resources where there is the highest potential return. If you give an assignment to 4 firms, you are giving each only a 25% chance of success. This could reduce the commitment they have to dedicating time and resources on your assignment. However, providing exclusivity on an assignment (to a firm with proven reach through networks and resources across your industry) could result in greater commitment and speed of response in managing your assignment. In this situation, you should agree on a timeframe for short listed candidates on which continuing exclusivity of the assignment is contingent.

In addition, it is often the case that an individual recruiter's remuneration is largely made up from commissions on placements. If they are confident of getting a result with you, they will work harder to achieve this. On the downside, they may be 'over-eager' and try to sell you a candidate that is not quite what you are looking for. Ensure the criteria for the role is clearly defined and agreed upon by all stakeholders in your organisation and the recruiter. Alternatively, seek a recruitment firm whose consultants are non-commissioned. In this way they will only seek to find you the person who is right for the job to secure your long-term business (that is, their success is measured internally by their annual performance not just the next job they fill!).

Assess the credentials of the specific individual who will be completing this assignment for you, including their experience within your industry and knowledge of the specific issues facing your company today. If it is your first dealing with a recruitment firm and they have not been specifically recommended by an industry colleague, it is appropriate to ask for recent references (written or verbal) demonstrating both the company's and individual's success in managing assignments such as yours. Of particular interest is companies who have used this recruiter or recruitment firm on an ongoing basis.

Select a sizeable firm with a demonstrated 'track record' of successfully (and recently) placing numerous candidates of the specialisation and level at which you seek to employ. This will ensure the firm has suitable knowledge, experience and networks to identify not just the most 'available' candidates in the market (ie those actively responding to job ads) but the most suitable. You may request a recent client list that will inform you of the scope of their reach within your industry sector.

I would not commission a recruitment firm that relies on advertising. Investigate what resources they have available from which to select a short-list and take particular note of an extensive in-house database of pre-screened candidates within your industry sector. With longevity in the industry, you can be assured that whether the candidate is already registered with an agency or not, they have already 'benchmarked' your need in their experience of screening these candidates which greatly increases the speed of response and deployment of other resources necessary to present you with a shortlist.

Ensure they are a member of the Recruitment Consultants Services Association. As such, they are committed to adhere to the Code of Professional Conduct introduced in 1999 which states in it's introduction:

"Members will observe the highest standards of ethics, probity and professional conduct. Ethical behaviour is not simply compliance with legal requirements, it extends to honesty, equity, integrity and social responsibility in all dealings. It is behaviour that holds up to disclosure and to public scrutiny."

If an RCSA member company is thought to be in breach of the Code of Professional Conduct you can seek the support of our industry body who will review your claim and may expel a member company if they confirm the member is in breach of this code.

An online directory of member firms can be found on their web site:

http://www.rcsa.com.au

"I too have had a similar bad experiences with AQUENT's services.

After meeting with AQUENT and also being assured of my great talent and the great possibility of work, they only managed to put me forward for one position in one year.

What disappointed me even more was after emailing them on numerous occassions re positions I felt fit my skills/experience, I only ever recieved a response via email outlining why I was NOT suitable for each. They should not agree to take you on their books if they cant be bothered representing you. This is disappointing after coming from a very well organised industry in Wellington, NZ.

I understand they obvioulsy only work for the employers and NOT the employees."

"I have to agree with Ky (ky@kylane.com), my experiences with AQUENT were not the best. After signing up early last year, with "loads of talent" I am still waiting for a reply, even when they have new positions, I still have to apply again to remind them of myself and have even beat AQUENT when the customers advertise positions themselves and through AQUENT at the same time.

Again granted with the climate of work this slow and tough at the moment maybe they are doing the best, but even if they kept in contact with you, just to let you know how things are."

"My experiences are from another angle. I signed up for recruitment through AQUENT back in May, and after being assured I was a "star talent" and finding me a new position was only a matter of time, that 'matter of time' ended up being 'til today, with barely any contact. Granted the current climate is tough, but the company I'm still with has never been busier, or more prosperous."