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Here’s How to Fix Agency Recruiter Fees

The issue of agency recruiter fees is a complex one, with no easy answers.

It used to be that using a third-party recruitment firm was one of the few ways for most organizations to access great talent. They built their businesses model around delivering access to talent, high quality, and speed of hire. Many organizations were quite happy to pay high success fees because these firms provided something organizations couldn’t deliver on their own.

But times have changed, and many of those same third-party agencies no longer have the same lock on the relationship in the same way they did before. Most organizations now have lots of access to people through hundreds of social networks and job boards (LinkedIn, Facebook, Twitter, CareerBuilder, Dice, Monster, to name a few).

FEES, VALUE, AND THE CHANGING ROLE OF AGENCY RECRUITER

The gap between value and price sits at the center of the argument about fees. And because agencies and organizations often use the same tools the perception is that agencies add less value than they did years ago. The answer, at least in part, is to right-size value and price.

Agencies want to change their relationship to fees, and maybe even change their business model, but many can’t (or won’t) because they believe it will impact their bottom line. Organizations want lower fees but they are also willing to pay for high value. Many simply don’t see the same level of value as they did years ago. And perceptions matter – and it’s having a huge impact on fees.

Maybe it’s time for third-party agencies to deliver high value in the places where the high fee can match a high value and return. This correction – a realignment in the relationship between value and price – would serve to diminish the gap, and maybe even solve the problem of the “high fee”.