Hiring consultants: Are they worth their hefty fees?

ITworld.com –

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.
  • Hiring consultants can locate candidates more quickly and put them on the job sooner than company managers can, which has a more immediate positive impact on the business.

Hiring consultants differ from traditional executive recruitment firms in several ways. First of all, you can expect hiring consultants to become intimately familiar with the needs and the psychology of your organization. They will spend a good deal of time in your office conducting research, sizing up the situation, and profiling the kinds of candidates that will work best for you. Hiring consultants on an hourly fee are generally less expensive than fee-based recruiters. Finally, a consultant is going to give you undivided attention; an executive search firm will put your needs in the rotation with those of other clients.

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