Why IT Recruitment is Expensive
There is quite a large number of IT recruiters, who are ready to fill positions for a fee equivalent to a candidate’s monthly salary (or even less) and over the past 5-7 years there has been more and more of such individuals entering the market. This tendency could be due to multiple factors, including the fact that such recruiters are actually, at times, able to fill positions and their clients have no reason to consider paying more because they receive ‘more or less the same type of service’.
The surprise usually springs up in the long run. There are rare occasions when the strategy of filling a vacancy for any fee you can get, using any resources you’ve got does work. However, such an approach carries negative consequences.
Why are the services of some recruiters cheap?
- The low-skilled labor provided by some recruiters, who receive a percentage-only fee on a success basis or the minimum wage is the result of a lack of their education concerning the industry, as well as their lack of knowledge of what Information Technology actually is. Their employer may have minimal staff-associated costs because such employees are not officially registered with the company and practically work for food. As a result, the costs are kept to a minimum.
- Recruitment agencies do not invest in process automation and the tracking of results. It is easier to hire 5-10 remote recruiters and give each one the task of filling a position during their probation period than to pay $50-$300 for an Applicant Tracking System, which would allow for monitoring whether potential candidates are being spammed with the same opportunity over and over.
- Recruiters are tasked with searching for potential candidates for a high number of roles and their applicants are offered to multiple clients simultaneously. It is sometimes easier to engage a single recruiter with five clients, who are ready to compensate a fee equivalent to each successfully-placed candidate’s monthly salary than to negotiate a more decent fee with a single client and to provide quality recruitment services from a recruitment team that is needed for such a project.
- Recruitment agency owners fear that a new day may not bring any clients or that the amount of clients they do have is not enough to cover potential cash flow deficits. As a result, the option of an imminent arrangement with a low-paying client is chosen instead of dealing with negative profits or releasing underused employees.
- Recruitment agency owners or sales managers are unconvinced that a fee of 16%-25% of every successfully-placed candidate’s annual salary could realistically be agreed and are afraid of losing clients due to competition and the fact that there will always be those, whose services are as much as two times cheaper.
After engaging with recruiters described in the examples above, who are ready to work for low fees and are able to occasionally provide suitable CV’s, you may even be lucky enough to be presented with candidates, who have an idea of what your company does. However, there is a flip side to such a scenario – along with having saved money on recruitment services, your company’s goodwill on the job market may be substantially damaged.
The IT community is quite tight-knit and information within it spreads extremely quickly; especially if it’s of negative nature. Within the CIS region, it is very common to exchange information via messaging platforms such as Skype/Slack/Telegram, etc. There are plenty of communities, where IT specialists regularly exchange news. There is also a separate community, where various examples of erroneous or questionable behavior of industry professionals from different companies are described with great specifics and without censorship. The most common subjects of such discussions are usually recruiters or other individuals, who are the first ones to engage with potential candidates.
A potential candidate’s first encounter with generalized information about a company, as well as inaccuracies in the company’s tech stack without being given any details of the working conditions are just a few examples of ‘quick recruitment’. Such work is done by low-skilled recruiters or agencies, where there is no criteria for or focus on quality, or tracking of results of those, who are tasked with filling the roles. Other examples include grammatical errors during various forms of communication, spamming of potential candidates, and mixing up their names during customization, along with rudeness.
The less information there is available about a company before its initial introduction to potential candidates, the more resources and effort it is necessary to dedicate to recruitment. The less the company takes care of its employer branding in terms of its recognition, as well as promotion of its key selling points and the unique benefits of working for this company, once again, the more resources and effort it is necessary to dedicate to recruitment. If there’s a lack of expenditure on the former and a lack of budget for the latter, recruitment has no chance of being as effective and quick as expected.
If a company is ready to sacrifice time in order to attempt finding ideal candidates with the help of inexpensive recruiters, it risks diminishing its reputation. This may, in turn, lead to the allocation of extra budget in order to explain to the market what the company is really all about, as well as its offerings, and at which point the misunderstanding regarding the company’s reputation had taken place. Though ill-advised, such a scenario is still an option for conducting one’s business and recruitment and we are happy to provide employer branding services for such clients.
Oftentimes, after learning of complaints about cooperation with other agencies and ineffective recruitment over a number of years, a company is not in need of a different agency, but of a service to convey information to the market regarding which values and conditions the company’s team and management is eager to transmit. It is equally important to identify and deal with the sources of negative messages regarding the company, which are formed by select individuals. This is especially noticeable in tight-knit communities, such as those of the Magento, Ruby, or Python developers.
In the absence of a company’s recognition on the IT job market, the attempt to cut recruitment costs usually results in an increase of time necessary to attract top talent both in the initial stages of a search, as well as in the long term. If such an approach is further damaged by the blunders of low-skilled recruiters, extra budget would need to be allocated in order to form an employer branding strategy from scratch.