provoking what happens in IT

recruitment and the percentage scam

sometime ago I was in the process of hiring a number of people and decided to farm the process outside to a recruitment firm. this was about 3.5 years ago and we were assembling a team of 20 people. IT specialists. not cheap people by any means.

at that time, we were able to negotiate our way down to a rate of about 9% for letting the recruiting agency find people through for us. the end recruiting fees would have been around the $150k mark at the end of the process.

at the time I felt that this was high but went along with it.

when I came to my recent role 3 years ago I had to hire more people. I found, with disgust, that I was getting hammered 14% for IT staff. so on the average IT person’s wage ~ $80k per annum, I was up for $11k in fees.

let me break this down for you even more. the average contractor (in business type services) in australia earns around $80 per hour for their efforts. an hr person, looking for staff using seek, should be earning this amount of money – perhaps a substantially larger amount of money if they were finding cios, cfos or ceos.

but for the average punter, $80 per hour is adequate.

so at that rate, there is 137.5 hours worth of work to be allocated against finding the average employee.

I cannot fathom that any hr person would be spending 130+ hours to find a generalised resource for you. I mean they get the resumes, talk to the person to see if they have 2 heads, and then send them on through for you to look at. if you like them, you interview, most likely three times and then get the hr person to do the reference checks.

most hr people I ask about this tell me that it takes them less than 20 hours to fill a role. they admit it! which is even worse – they admit taking 100 hours of money for nothing from you!

I’ve lived life as a vendor, supplier and cio with a golden rule – you owe what you owe and nothing less.

I constantly feel aggreived by the amount of money that the hr fraternity want to charge.

so recently, I negotiated a time and materials rate with an hr firm to help me find people.


well for one, every other normal contractor in business works under this sort of rate, or an agreed daily rate; not give me a percantage.

secondly, there is an accountability of the work being done by the amount of hours being taken to fill the role.

thirdly, I pay for the things that I want.

richard giles was recently talking about the change in communication methods for the media going forward – I think that there exists a real potential for the hr and recruiting industry to reinvent itself to meet the real needs of companies, rather than the bs costing in place at the moment – no wonder sites like flourish.


September 27, 2006 - Posted by | Blogroll, technology

1 Comment »

  1. as-94783-sa

    Nice site, will visit again!

    Comment by Jason Howard | December 4, 2006

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