Like to save money? Avoid the hiring fees.
You did it! You found the right person for the role you have been trying to fill! They show up for work on time, have a great attitude and all the technical skills. Now, here comes the tough part: pitching the idea to management that this person is worth the hiring fees from the agency.
These types of fees are packaged based on two factors: the type of role being filled, and the agreement in place between the host employer and the agency. They range from a certain percentage of the employee’s annual salary to requiring a certain amount of time to pass before making any kind of job offer—or risk triggering a flat hiring fee. Still, others will cite the “contract buy-out fee,” or similar contractual vehicle that makes it a problem (read: more expensive) for the host employer to hire this person.
Any way you chalk it up, hiring fees are expensive. The way they cost companies may surprise you. If the person whom you are trying to hire was going to make $60,000 per year, the fees could range from $9,000-$15,000 (15-25% of annual salary!) (1). This cost may be prohibitive to your company and therefore you decide to wait on the hire. You want to make sure that the placement continues to “work out”—and maybe the agency will be more lenient if the employee has worked out more of their contract. Whatever the limiting factor is to save money, consider the following: while waiting to start this person at the $30/hour, they are still getting paid less while at the agency. Therefore they will continue to look for another job while on your assignment. They may find one, or they may not, however, either way you are losing some of their focus at best. If they find another job, you are without the person you felt was a good fit for the role and are back at square one!
The other reason for larger hiring fees has to do with the candidate’s choice of agency. When candidates choose which agency they are going to apply to, they will go with the company that makes it easiest for the candidate to obtain full-time employment. This can lead to greater hiring fees that may be costing your organization. Another factor for higher fees is a limited talent pool. This is because candidates have discovered that finding full-time employment through an agency depends on what kind of fees and restrictions the agency enforces. Therefore, when given a choice, the top candidates will opt for an agency that charges lower fees to its customers.
Hiring fees are designed to protect the efforts of the agencies. They make sure that companies don’t abuse the resource of an agency to find and screen candidates without having to compensate the agency. That is understandable. But here at TSI, it has always felt wrong. Therefore, since our inception in 1992, we have never once charged any client or associate a hiring fee of any kind. There is no time limit for which you are required to use one of our associates before offering them a full-time position.
Tidewater Staffing believes that our mission is to “Put people to work,” and “Do the right thing every day.” Part of that belief is that if the client has a role for one of our associates, they need to be allowed to hire them free of encumbrances, special permissions, or fees. TSI will not stand between a company and a good hire simply because we found the employee. In fact, it is a celebrated day when our associates achieve their goal of finding a full-time job. Check out our blog posts on that subject here.
If you are ready to begin a relationship with a company that understands the industries and people that we serve and can save you tens of thousands on hiring fees, please get in touch with one of our VPs of Production for a free consultation and analysis of how TSI can help your company achieve its goals.