Can you afford NOT to use an agency?
A lot of companies will prefer not to use a third party to help with their recruitment needs due to the perceived costs, and of course!
We all want to save time and money!
However, handling the recruitment process internally may not always save you money.
Let’s breakdown the different stages of the recruitment process, along with the cost…
The stages of recruitment
1: You realise the need for a new staff member
How long have you been needing this new member of staff?
How much longer can you afford to wait?
A vacant role will need to be filled quickly. Every hour a hiring manager spends recruiting is real money based on their salary.
Let’s say they have a salary of £45,000 per year = £23.00 per hour.
For however long it takes to find their perfect candidate, their time will be spent on advert writing, screening, interviews, and admin, adding directly to your costs.
2: Advertising
You’re in need of a ‘Production Operative’. Therefore, you need to put together a suitable advert to attract the best candidates.
Creating, posting and managing adverts can be very time consuming.
Let’s look at the cost of this for your first attempt…
In-house cost:
- Writing advert: 1 hour = £23.00
- Searching CV library 1 hour per day for 2 weeks: 10 hours = £230.00
- CV library access = £299.00 + VAT
- Indeed recommended spend = £255.00
Total in-house cost so far: £807.00
Our cost so far: £0.00
We will write and post job adverts across multiple platforms at no cost to you.
Our consultants are training in advert writing and have access to multiple websites and social media platforms that can attract a wide range of candidates.
3: Ad response
You’ve had a successful advertising campaign, great!
And your inbox is now flooded with 100 CVs, but how suitable are they going to be?
Who is going to sort through the applications and screen the candidates?
Going through and screening 100 CVs typically takes around 2 hours = £46.00 of your time
(And if you manage to get through 100 CVs, give us a call on 03339 966988 because that is very impressive)
Total in-house cost so far: £853.00
Our cost so far: £0.00
At Essential, we are trained and have the experience in screening CVs to be able to filter through to the candidates with the skills you have requested. Candidates who have the relevant experience will then be interviewed – either over the phone or in person.
This means by the time you receive our shortlist of CVs, all candidates will have passed through the first interview stage.
4: Interviewing
You’ve now gone through all the applications, and finally narrowed it down to 6 candidates, who you will be inviting in for an interview.
How long will it take for you to decide who to interview?
How many interviews will be held?
Let’s say the 6 interviews being held last for around 45 minutes each, and you would also like to bring in a 2nd party from HR to join you in on the interviews, who is on £20.00 per hour.
6 candidates x 45 minutes each = 4.5 hours = £193.50
Total in-house cost so far: £1046.50
Our cost so far: £0.00
Because candidates are pre-screened by us, most clients will therefore decide that they only need to interview 2-3 candidates, as we have already narrowed down the options, therefore saving your time and cost.
5: Post interview admin
Congratulations! You’ve found your perfect candidate! But what now?
Will you check their references?
Will you contact the unsuccessful interviews?
References, offer management, rejecting unsuccessful candidates, and candidate engagement will approximately take around 2.5 hours of your time.
Therefore = £57.50.
And what if anything goes wrong? Such as a counter offer, withdrawal, failed reference?
The process will then need to be repeated all over again.
We are in contact with all potential candidates throughout the application and interviewing process. We pre-empt the dreaded counter offer and make it our business to know if the candidate is continuing to job hunt. We will advise our candidates of the best opportunities for them, and will make our clients aware of any changes during every step.
However, even if the worst happens and you have used an agency – there is still no fee!
Total in-house cost so far: £1104.00
Our cost so far: £0.00
6: Overtime to cover the vacancy
Whilst you are looking for the new staff member, you may need cover.
Which leads to two members of staff covering for 1 hour per day at time and a half (£18.00/hour) over 30 days = £1,080.00
This is a real unavoidable cost when recruiting in house.
Total in-house cost so far: £2184.00
Our cost so far: £0.00
We can provide temporary cover for when things get tough, therefore not losing out on any company productivity.
7: Risk of a bad hire
When hiring, 18% of new hires fail within the first 6 months of starting their new job.
- Low to mid skill cost per failed hire = £2,500
- Expected risk cost: 18% x £2,500 = £450
Total in-house cost so far: £2634.00
Our cost so far: £0.00
We will reduce the risk of this happening, along with often having guaranteed replacements that are waiting in the wings.
8: First hire fails
Unfortunately, the unexpected has happened, your first hire hasn’t worked out, after just 2 weeks.
Now you have to repeat the process all over again.
So what is this going to cost you overall then?
This is without even including lost productivity, so it’s a conservative estimate.
Agency cost
So we’ve worked out how much it will cost you, but if using an agency, what will you owe us?
Just the pre-agreed invoice fee percentage of the candidates starting salary: 15% of £28,000 = £4,200
And that’s it!
- Advertising, CV searching, screening, interviews, referencing, and candidate management included
- No repeat costs if the first candidate falls through
- Replacement guarantee further reduces risk
So the net comparison?
Agency recruitment is £1,068 cheaper than in-house in this scenario.
Side by side comparison
Agency recruitment saves money, time, and stress, whilst giving you:
- No ad spend
- No repeated interviews
- Reduced risk of failed hires
- A smoother faster process
Key message
Recruiting yourself may feel cheaper, but once you factory in your time, advertising, overtime, and risk, using an agency is the smarter more cost-effective option.
With Essential Recruitment:
- No upfront fees
- No wasted hours
- No risk of repeated recruitment
You won’t need to pay a penny until we have found the right candidate for you. No fee, no risk.
Is it time to re-think agency fees?
See everything we offer here: https://www.essentialrecruitment.co.uk/essential-professional/
Or contact our Essential Professional branch on 03339 966988 / apply@essentialrecruitment.co.uk
