A Hard Look at the Recruitment Industry - a Personal Experience.
By Philip Lye
Wednesday, 14th March 2007
As a former Chief Executive Officer and General Manager qualified in Human Resource Management - Employee Relations and Accounting it has often been my question as to what place the recruitment industry plays in today's marketplace and to whether they give value for money or not.

Some time ago when in corporate life I parted with $36,000 for two employees with salary packages of less than $100,000 each and this was at the agencies discounted rate, apparently. As I reflected on the cheque I had just signed I certainly came to the view was this was not value for money – who in their right mind would pay this extortionate amount of money.

What has become increasingly apparent over the last 10 years is the gap between what the recruitment industry espouses and their ability to deliver.

While this may be perceived as personal bias, I speak from experience having worked in a recruitment agency for a period of time and seen what goes on.

It's a jungle out there with many agencies trying to stay afloat, enticing your business as the industry moves to saturation point with new and established recruitment agencies touting for your business.

And their fees, 10% -25% of total package represents almost madness. The amount was not lost on my superiors in ASIA and Europe who ‘were not amused'.

A high profile Director in the recruitment industry shared with me that most new starts last 18 months and either burn out or move on to the next offer, firm or change careers.

In the meantime what about the ‘business-person' who has contacted these agencies? They often have to wait for up to 6 –8 weeks before getting a successful candidate.

This timeframe can be covered in various guises – need I say more?

Good news!

Indeed many former senior recruiters are now leaving the industry and setting up their own boutique company's offering attractive alternatives.

These attractive alternatives include experience, mobility, industry understanding and vast personal networks, some globally. A comon theme is that many have run successful businesses themselves.

This is a welcome change to the ‘recruitment' scene, experience and personal service at a realistic price.

By way of example of a great operator and service, on one occasion I requested that a recruitment agency search out a para-medical sales person in Victoria and New South Wales and have them on a very tight timeframe. The agency delivered and the candidates were offered positions.


1. If you use a recuritment agency, negotiate, negotiate, negotiate. If they don't negotiate do not give them your business.

2. If you wish to outsource ask the agency ‘what business management responsibilities have you held in other industries'and have you ever managed a business!

3. How can I be reassured that you really understand my needs not just pretend to.

4. Can you give me a two-year replacement guarantee to get my business without fine print There are agencies that will guarantee this to get your business and honour that request. Ensure that this is placed in writing.

5. Pay no more than 10% unless it is for a specialised and highly competitive field (nursing unit manager for adolescent mental health).

6. Go with your gut instinct – why is it that women often tell their partners – be wary of him or her and they are later found to be right. Men learn from this.


While some agencies are shonky, there are some very good operators in agencies that are genuine about you and your business. Biz Momentum can point you in the right direction. (We are not paid anything for our recomnmendation).

Philip Lye is the CEO of Biz Momentum in Australia asisting Small to Medium business with Employee and Industrial Relations Human Resouce Managment and Workplace Health & Safety.

Visit www.biz-momentum.com for other helpful small business articles
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