If you’ve been studying the global staffing industry (or have been checking your spam filter), you may have noticed an increase in the number of staffing agencies offering recruitment services by the hour. The advancements in social media described above have given everyone a robust rolodex from which to recruit. Choosing to work with a recruiter by the hour can offer hiring entities an attractive financial upside unavailable with the contingent and retained fee-based search models.
Reputable hourly search firms will offer a similar high-quality approach as offered by retained or executive search firms. As opposed to the typical 20%-35% fee for contingent and retained search firms, the average cost-per-hire with hourly search firms is typically at or around 13% of the candidate’s first year salary.
While there is potential financial upside to working with hourly firms, there is also higher financial risk. For any number of reasons, it is possible that the hiring entity can end up spending their recruitment budget without making a hire. No other model exposes the hiring entity to this type of financial risk, therefore we do not endorse this model without some type of risk mitigation process.
Here is a summary of my personal experience with hourly recruitment models. Across a portfolio of searches, this billing structure should cost far less than one based on contingent or retained billing models. That said, all it takes is one tough search, one unfocused recruiter, or one change in scope to blow your recruitment budget without making a hire. Nobody wants that situation, the hiring entity or the recruiter.
We actively recommend that hiring managers check out this one-pager on Talon RPO's hybrid recruitment model. It shares the quality of a retained search with the financial upside of an hourly search. Once you try it, you'll be hooked.