The internet has transformed the employer/recruitment agency relationship by creating transparent recruitment marketplaces. But how can employers make it work to their best advantage? Virginia Raemy explains.
What are online recruitment marketplaces?
Online recruitment marketplaces are the latest addition to a host of e-recruitment solutions. Based on a model that has already caused a stir in America, these new suppliers are creating transparency in the traditionally opaque recruitment process, creating efficiencies in the employer/recruitment agency interaction model.
Used correctly, employers will benefit from:
- reduced recruitment spend;
- faster filling times; and
- easier vendor management.
How do they work?
Transparency is helping to overcome traditional frictions in the employer/recruitment agency interaction process. Firstly, online recruitment marketplaces allow employers to set their own recruitment fees on a vacancy-by-vacancies basis. Not only does this empower companies to take complete control over their recruitment expenditure, it also facilities the matching process between employers and recruitment agencies. Agencies see directly how much is on offer and can decide whether or not to work on a role.
However, pricing transparency is just one obvious advantage. Online recruitment marketplaces also create performance transparency. Like on eBay, recruitment consultants get rated by all the employers they work with and collect 'real live' performance statistics like CV submission to interview ratios and placement ratios. This increased transparency facilitates the employer’s choice of which agencies to work with.
In short, online recruitment marketplaces improve the matching process between employers with job vacancies and recruitment consultants and reduce the need for endless unsolicited sales calls.
Step by step process
There are five simple steps, most of them are similar with the various marketplace providers:
- The employer posts a job description and sets the placement fee on offer when making a hire. On most marketplaces the employer’s identity is kept confidential at this stage.
- Recruitment agencies review job specifications and apply to work on it if they are happy with the fee on offer.
- The employer chooses the agencies they want to work with based on ratings and reviews.
- Recruitment agencies speak to employer, perform search and submit CVs.
- Employer makes a hire. The online recruitment marketplace invoices the employer and distribute the fee to the successful recruiter. The marketplace provider usually takes a cut of the fee at this stage.
Why use online recruitment market places?
There are different reasons depending on size and need of each company:
SMEs
Online recruitment marketplaces turn the traditional employer/agency relationship upside down and empower a company to set their own fees. This is especially useful for smaller companies who are traditionally subject to an agency’s quoted terms. This can lead to significant cost savings.
Another advantage is that specialist roles can be filled faster. A marketplace eliminates the need to identify and brief numerous specialist agencies. This is all done with one job post. It also significantly increases the reach of an employer and helps to tap into several candidate pools simultaneously. This can have a very beneficial impact on time to hire.
Large corporates
While large corporates also benefit from cost savings and faster time to hire, their main advantage is easier vendor management. Large corporates have preferred supplier lists ('PSLs') with sometimes hundreds of suppliers. Instead of having to enter into terms individually with each of them, marketplaces provide standard terms and provide a sole point of contact for the company. On the backend, the marketplace provider will enter into standard terms with each of the suppliers.
Another benefit for large corporates is a centralised approach to recruitment through agencies. Standardised terms and fees as well as one central place to manage incoming CVs can make the lives for some recruitment managers a whole lot easier.
Case study
A case study will illustrate some of the benefits experienced by a recent adopter of an online recruitment marketplace:
Eaga plc is a green support services company; the UK’s leading provider of residential energy efficiency solutions and an established deliverer of a range of outsourced programmes. eaga employs around 5,000 people.
Eaga recently became a client of TalentPuzzle. The company is going through a massive growth phase and needed support in finding candidates with specialist skills in a fast, efficient and cost effective way.
The result:
- Eight new hires sourced within a month, including three which were found in 12 days.
- Cost savings of up to 60% per hire.
Laura Gordon recruitment specialist at Eaga commented: “TalentPuzzle is a very efficient recruitment tool as it helps us save a lot of time. We get to work with several different agencies at the same time, yet don’t have to brief each one separately. The consultants, many of whom are specialists in 'green' recruitment, vet the CVs and I generally find that they are sending high quality candidates. TalentPuzzle is such a beneficial recruitment tool for us and we have made eight placements in less than 25 days.” [1]
Choosing the right supplier
There are several different suppliers in the UK such as TalentPuzzle, Gatszu, mypeoplebiz and several more. One thing they all have in common is that the service is offered for free to employers. An employer only pays the placement fee specified when making a hire.
One distinguishing factor to look out for is the number of agencies active on the site. As with any marketplace, liquidity is key. Agencies need to get a sense of competition in order to supply the best possible CVs in a timely manner.
The agency’s perspective
The remaining question is why do agencies accept to work on sometimes heavily discounted rates? The answer is simple: these marketplaces give access to more business without the need to spend money and time on sourcing new clients. This justifies accepting lower fees.
[1] Case study sourced by TalentPuzzle.com