are you paying the hefty 20% recruitment fee?

Is your company growing? Are you considering engaging a search firm to help you find talent? If so, you should be prepared to pay 20-30% of a new hire’s first-year salary to the search firm. How did this become the staffing model the industry adopted, and why hasn’t it evolved over time?

The first known private employment agency in the U.S. was opened by Fred Winslow who started an Engineering Agency in 1893. (Wikipedia) In these early days, agencies had to rely solely on local market sales efforts to obtain clients and job orders. The cost associated acquiring new customers combined and local news outlets contributed to higher costs to deliver. The model hasn’t advanced much since then.

recruiting tools and technology

Let’s fast forward to now. There are now approximately 20,000 staffing agencies operating in 39,000 offices in the U.S. (SIA) Industry sales are at an all-time high reaching nearly $167 Billion in 2018 (see graph). Recruitment is one of the largest industries in the world and it has virtually no regulations.

ASA Graphic

Instead of yellow pages, fax machines, and rolodex, recruiters today utilize online databases like LinkedIn, CareerBuilder, Indeed, to find candidates. The creation of the internet has allowed recruiters to search and find candidates much faster and easier than ever before with new applicant tracking and recruitment tools automating much of the work. However, the pricing has never reduced as a result of the efficiency gains by advancements in technology.

the relode solution

When an employer decides to work with a traditional recruitment agency, it will more than likely pay a 20-25% fee of the first-year salary. We’ve created a new innovative recruitment model by leveraging technology and a virtual crowd of referring agents to bring quality talent to our customers for less. We’ve proven time and time again over the last few years that we can deliver the same or better candidates and save our customers nearly 50% on traditional recruitment fees, while still providing the white glove service that a traditional recruiter provides.

The reason traditional firms much charge 20-25% is because they have so much overhead including applicant tracking systems, job boards, plush offices, salaries, massive commissions, and putting sales reps on planes. At Relode, we do everything we can to remove inefficiencies using technology. By building our own technology platform and creating a 100% virtual workforce, we are able to keep costs low and pass these savings on to our clients.

We believe that the tired and outdated model must be disrupted. Why would you pay 20-25% of the first-year salary when you can pay half? We’re on a mission to bring modern and delightful solutions to employers who must engage a search firm. It saves time, it saves money, it creates better quality, which all leads to better care

Every day in our lives we experience new technologies and innovative solutions to our biggest problems which topple traditional industries. From on-demand food, to transportation, pet sitting, hotels, scooters, you name it, and it’s getting disrupted. Staffing’s no different, and Relode’s on a mission to drive that change.

Looking for a staffing solution? Learn more here. Want to become a Relode virtual recruiter? Learn more here.

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