Hiring consultants: Are they worth their hefty fees?

By Thom Holmes, ITworld.com |  Career

Have you tried to hire 50 high-tech employees lately? Dozens of companies -- whether
they're building a new business or revamping an old one -- face this challenge in any
given week. Competition has added to the difficulty for many New Economy firms: 10
companies in the same neighborhood may be trying to find the same developers and
technical staff.

What is a company to do when the classifieds have run for the 10th time and
Monster.com isn't doing the trick? You might consider turning to hiring consultants to
pump up the volume of your recruitment effort.

The idea is simple: Hire a person to find and screen candidates, lots of candidates.
Working with the appropriate managers (there are usually several for rapidly growing
companies), the consultant schedules interviews, helps negotiate offers, and gets the
paperwork started, eliminating major headaches for those seeking new employees.

Barbara E. Heiken is the president of SMR of Mahwah, N.J., which specializes in
helping dot-com companies quickly ramp up their staffing. Interestingly, Heiken says,
most companies don't realize at first how hard it is to find high-quality employees in
great numbers. "Companies usually arrive on our doorstep after they have failed
recruiting for themselves," she explains. "Part of this situation exists because
corporate executives are hired for their know-how and business acumen, as it should
be -- not for their recruitment expertise."

The first task of the hiring consultant is to help a client define who or what is
needed. Not surprisingly, new companies find that definition elusive because, in a real
sense, they do not yet even have a culture they can explain. "The upfront, analytic
piece of a search is absolutely vital to the length and success of any good recruiting
process," Heiken says. "Jobs don't exist in a vacuum. They are designed to support the
vision, mission, and strategy -- as well as the "softer" requirements of culture and
fit -- of a company."

If you are unfamiliar with recruitment fees, you may flip out when you learn how
much they can be. While Heiken's firm works for a flat hourly fee, others require a fee
equal to 30 percent of a new hire's gross annual salary. Multiply that by several
employees and you are talking about a substantial expenditure. But using a hiring
consultant is a lot like hedging one's bets. You will probably benefit in the following
ways:

  • Your managers will be less distracted by the job search. They can focus on
    the nuts and bolts of business needs while someone else is off conducting the
    time-consuming search for candidates.
  • Recruited candidates have traditionally high retention rates, often staying with
    a new job for more than two years.
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