Most recruitment businesses structure their fees in broadly similar ways, as a percentage of the salary the new employee will be paid. There are differences in timing (on briefing or on placement?), and fees usually undergo the give-and-take of negotiation, but they’re pretty transparent otherwise. A successful management or executive hire is important to the employer – the work the employee goes on to do is highly valuable – and recruitment fees deliver value for money.
Sometimes, recruitment firms and their clients agree in addition to run “client-paid advertising” in support of a particular brief.
Client-paid advertising is a program of adverts, which sometimes may carry the employer’s brand as well as the recruiters, aimed at helping attract candidates for the role, paid for by the client.
If you’re thinking about such a campaign, or your recruitment firm suggests it, understand that not all companies manage these campaigns in the same way. It makes sense to understand what the program is trying to accomplish, and how it’s structured financially.
Here are some things to think about, and ask your recruitment provider:
1. What media the campaign will use. Many packages involve a mix of online and print job adverts. Be a little wary if part of the campaign is for print advertising, which is relatively expensive, yet which in this digital age actually may not be what attracts the candidates who search and apply via job boards and social media. Print has been decimated by online. (Ads in the print “Appointments” section of one well-known international newspaper used to be a business worth tens of millions of pounds annually; today, its recruitment advertising is largely online and generates less than £10 million per year.) Print, when very targeted, can work well – for example, roles with a strong technical orientation advertised in scholarly journals related to the field in question, or roles in an industry that has a magazine or newspaper which is the undisputed “go to” place for jobs. If you’re sceptical about print, though, consider asking for an all-online campaign.
2. What job boards it includes. For a particular job, the number of online outlets that will actually be on-target for that hire is probably small, yet with some packages a recruitment firm may cast an unnecessarily wide net. Some pieces may not be necessary for the job at hand. Be cautious of casting too wide a net, and paying for it, because:
3. A side effect of all recruitment, and recruitment advertising campaigns, is the growth of the recruitment company’s database. It’s absolutely natural, and a good thing, that every recruitment company retains all the candidates it generates from its searches for clients. Having a good database helps the recruiter provide a more accurate and cost-effective service to its clients, and sometimes find the right person more quickly. The client who pays for client-paid advertising, however, doesn’t typically see all these candidates, just the shortlisted ones. If this troubles you – and it may not, for example if you work regularly with that recruitment provider and could thus tap those extra candidates later anyway – consider how you might agree to rebalance things a little. (At the end, we offer suggestions for how to go about this.)
4. The employer branding benefits accrue to the recruiter as well as the client. One reason companies pay for ads is because their company name and logo are then out there in front of lots of prospective employees which enhances their employer brand. For many companies, this is an important and meaningful reason to advertise roles. Bear in mind, though, that just a handful of ads amid the noise of millions is probably not going to meaningfully enhance anyone’s brand. It’s not going to move the dial, unless there’s a volume effect – if the employer is a relatively big, well-known brand that already has a volume of image-building advertising out there for other reasons. If this describes you, then client-paid recruitment advertising can add to this, strongly and in your favour. If you’re a smaller company, or one without a big image ad program, be a little sceptical. Many recruiters are doing lots of this advertising, on the channels in question, so they do have that volume effect, and it certainly builds their brand if not yours. Again, consider whether this troubles you, and if so, whether and how you might discuss it with the recruiter.
5. It’s so profitable for some recruitment firms, they pay their recruiters separately to sell it. Some recruitment companies sell client-paid advertising at cost, or at a small mark-up. This is the right approach. It’s how Executives Online prices client-paid advertising. In some companies, however, that’s not the case. The pricing to the client reflects the single-advert pricing, yet the cost to the recruitment firm is via volume contracts they negotiate with the media owners. It’s incredibly profitable. It’s so profitable, recruiters in firms that sell client-paid advertising are commissioned separately on the amount of client-paid advertising they can sell. Being a good ad salesperson is a significant part of their job, when what the client needs is a professional, effective recruiter. Unfortunately, in these situations, which tend to arise among the bigger recruitment firms, it’s not the client who’s capturing the value in this transaction.
If you’re interested in the benefits of client-paid advertising, be informed. Ask questions, like what types of advertising the package will buy, and how the prices break down amongst the various online and print media they’re recommending. Ask what the cost to the recruitment firm is for the advertising, and compare that to what you’re being asked to pay; is it being sold at or near cost, or with a big margin? Negotiate the associated recruitment fee, in the same way you would if the up-front fee in question were a retainer, or briefing fee. (Retainers or briefing fees serve different purposes than client-paid advertising and are often in the client’s and recruiter’s best interest. Recruiters who are retained will often agree to a discount on their completion fee because they know they have the client’s commitment to proceed with the hire, and with them as the recruitment partner.)
Consider if the employer branding effects are likely to accrue to you. Ask that the recruitment firm share more than just the shortlisted candidates with you, perhaps agreeing some criteria e.g. share the best 20 candidates, or all the bona fide candidates who have exactly the job title being sought, leaving out those that are too junior or wide of the mark for your role. In the unexpected but very positive event you decide to make more than the one hire from the shortlist, negotiate up-front that additional hires come at a reduced fee, in acknowledgement of the fact that you as the client funded the ads that generated them.
If you like what you've read, contact us if we can help recruit for you. (With or without a package of ads. Most of our work for clients does not involve client-paid advertising.) Executive or managerial jobseekers, register your CV. We look forward to hearing from you.