Table of Content:
- Where should you start with your recruitment?
- What are the pricing models in external recruitment?
- What are the main types of contracts in recruitment?
- What are the different types of recruitment models?
The highly competitive labour market and the shortage of skilled workers are leading many companies to need help with their recruitment. However, some companies no longer can or want to rely on an internal solution or department. In most cases, they cooperate with external personnel service providers to cover their own personnel needs.
However, it is often not easy to get an overview of the different specifications and types of recruitment models in this constantly growing and developing market.
How can you proceed if you have one or more vacancies, what should you bear in mind when working with personnel consultants and what are the different types of recruitment models you should choose?
1. Where should you start with your recruitment?
The most common way is to hire a recruitment consultant and discuss and present the vacancy. You must specify the salary expectations, must-haves (documents, core competencies etc.), skills and other requirements. It is important to note that there is usually no clear demarcation of the different types of recruitment models.
Mainly individual business models and services such as Headhunting or Recruitment agencies etc. are offered, where the intensity of the consultancy makes the decisive difference.
The advantage of a personnel consultancy consists of the high industry knowledge of the consultants about the current labour market situation and the academic education or specific further training.
2. What are the pricing models in external recruitment?
Retainer vs. Success Model
Depending on the remuneration model, costs can already arise for companies when contracts are signed or agreed upon.
The recruiter and the client usually decide between success–based remuneration or retainer models.
In the success–based remuneration model, the full fee for the recruiter or the recruitment agency is only due if a contract is concluded with one of the candidates.
In a retainer model, the fee claims are distributed and settled along the cooperation.
The most common retainer models are the one–third arrangement or payment on a retainer basis, in which high percentages of the agreed fee (usually 50%) are paid at the time the contract is concluded. This form of remuneration is usually used for higher–paid vacancies.
3. What are the main types of contracts in recruitment?
The services of personnel consultants, on the clients’ side, mainly include the placement of specialists and managers. This includes the search and selection of qualified candidates.
Indeed, external hiring can be expensive, and it isn’t worth it for companies to use this service for entry-level and/or junior positions.
Contracts can be interim (project-based, temporary work, invoices via recruitment consultants) or permanent (permanent position) employment. Some agencies are specialised only in interim, others only in permanent positions, and some in both.
4. What are the different types of recruitment models?
Executive search is often likened to personnel consultancy or used as a synonym for it, but there is a difference between the two professional fields.
Compared to personnel consulting, executive search stands for specialised and more individualised consulting along all phases of the recruiting process. The executive search usually fills high–paying positions, and the client is the focus of the consultant.
There is also a difference in billing. Usually, a fixed fee is agreed upon and then paid out according to the rule of thirds. The thirds are paid after the first listing of candidates, the final candidate presentation and when the employment contract is concluded.
The second type of recruitment model is Headhunting. Headhunting services are often used synonymously with a recruitment consultancy, but there are clear differences between the two types.
If a company is not successful in its search for personnel but needs to fill a highly qualified and important position, it usually hires a headhunting service. We can define it as a specific search for target candidates.
What is special about this is that the client usually has a specific target list of people for this position. So, the headhunting service usually does not only include candidates who are looking for a job in the application process. It also uses the network and industry experience to find specific target candidates who can also be active in a functioning employment relationship.
Headhunting combines business thinking and acting with personnel management, to be able to carry out a successful placement, the necessary know-how as well as important insider information provide important core competencies.
Headhunting services are paid on a mandate basis, they usually receive a part of the agreed fee when the contract is awarded, usually 50%, and the other part as soon as the company has concluded a contract with a candidate.
Temporary employment and contract staffing
In temporary employment, the employee does not conclude a temporary contract. But she/he receives an employment contract without notice with a temporary employment agency, as in line with the industry standard.
Workers often use this to get an easier entry into the world of work and to gain project experience.
Temporary work becomes also relevant when a company needs many skilled workers for a specific project for a limited period. Or if the company does not want to incur additional personnel costs.
The temporary employment agency “lends” the required employees. The advantage is that the client doesn’t have to hire permanent staff and can save on personnel costs.
The temporary employment agency remunerates the temporary workers in a permanent position in the form of service payments.
If a company suddenly has many vacancies due to a cash injection or an unexpected rapid growth, for example, it can hire an on–demand recruiting service. It will help the company expand its in-house recruiting department at short notice or fill many vacancies.
Recruiters-on-Demand work on a contract basis. They usually work remotely or on–site with the company after the contract has been signed and can thus gain a precise overview of the existing situation.
Such a service is also characterised by a high degree of flexibility; the client can adjust and vary the number of on-demand recruiters according to their current needs.
The remuneration model here is usually a retainer model, in which a down payment must already be made when the order is placed, and the remaining sum must be paid when the order is fulfilled.
Recruitment Process Outsourcing
The last type of recruitment model is ROP. In Recruitment Process Outsourcing (RPO), a company’s recruiting process is partially or completely outsourced to an outsourcing partner.
This external service provider carries out the customer’s specific recruiting activities in the short, medium, or long term. The advantage of RPO for the client company is that it does not have to invest its own resources. This reduces the workload of the company’s own recruitment department and allows the company to react better and more flexibly to short-term or unexpected fluctuations in personnel.
The disadvantage here is that the client must rely on the reliability and competence of the provider, which can lead to disagreements between the two parties.
How can we help you?
As a recruitment agency, we don’t only help candidates to find the perfect team.
Our consultants are also in contact with clients looking for the best match for their team(s). We know how complicated it can be to find the right talent(s).
Are you looking for new employees? Contact us, our consultant will call you to discuss your needs and advise you.