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| Does flat fee Recruitment mark the death of the Tr |
| Author: | OnLooker |
| Date: | Monday, 16th Mar 2009 09:58 |
| Views: | 2,036 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Hi,
In a recent press release I read that James Caan former CEO of Alexander Mann and Investment Dragon has invested into a flat fee recruitment firm.
http://www.onrec.com/newsstories/24280.asp
On the face of it, this looks like a sound investment. The article states that the firm placed 3000 candidates last year. From its website if its fees were £295 a placement as advertised I guess that means that it did in the region of £885k turnover last year?, circa 60 placements a week? Very nice business.
It also looks like for £295 they do a lot of work for the fee:-
http://www.webrecruit.co.uk/for_employers/online-recruitment--flat-fee-recruitment--erecruitment/filtering_and_screening/
If they deliver everything as offered and are doing the sorts of numbers indicated, then I can see clearly why James Caan would want to be involved, (it looks so good, i fancy a slice of this myself)
Lets face it, business is business and this looks like a sound business idea, wouldnt you agree?.
It also indicates that the glory days of recruiters charging 20% of salary or whatever for placements etc could be well and truly over?
Taking a step back from this my other thoughts are:-
1. It must be a sound business concept otherwise James wouldn’t be investing?
2. A move in this direction (This firm are not the only ones) could signal the demise of traditional recruitment?
3. They are doing all the work of a traditional recruiter for a fraction of the fees (must be tempting for staff not to want to do the same job elsewhere for bigger returns)
4. Recruiters would have to work significantly harder if they moved to a flat fee basis this low, just to reach the status quo. Lets face it £295 is cheap.
5. The Biggie – you can’t get away here from the fact that someone that was into traditional recruitment in a big way has in effect jumped ship into flat fee. I haven’t heard of him investing into any other recruitment firm hence I read this as a big signal for further moves in this direction
Are you worried? If not should you be?
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Permanent Recruiter |
| Date: | Monday, 16th Mar 2009 10:25 |
| Views: | 68 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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I do believe they now charge £695 and from an article I read, their turnover was nearly £2mn.
So yes it looks to be a good business model, and like you I can see why James Caan has invested.
Sure they're a threat but there's still plenty of room for agencies who add greater value in terms of their own niche / own database of candidates etc.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mitch |
| Date: | Monday, 16th Mar 2009 10:41 |
| Views: | 60 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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First of all, let's not get too carried away with the illusion that they are doing traditional placement business at £295 a go. What they are doing is placing candidates FROM £295 a go. I would expect that all the activities like bespoke questions, tailored pieces of communications, telephone screening, etc..are additional charges and much easier to levy once the client has agreed to the basic service at £295 ...which probably only involves a series of automated job postings, matches and emails with very little human involvement and/or interaction.
Bottom line is that pumping a few lazily written ads (or worse copying some job specs) onto a few boards, doing an automated filtering and then forwarding some CVs to the hiring company is only worth about £295. Much also depends on what types of jobs they are performing this service on. My bet is it is generic jobs that could be done by lots of different types of candidates.
Secondly, why is there an automatic assumption that it must be a sound investment just because James Caan has put an undisclosed amount of money into the business? Rich people make mistakes too ...in fact I wouldn't be surprised if they make as many investment mistakes as anyone else. Only difference is that they can ride their mistakes better than most other people.
The aspect of that recruitment business that makes it look attractive (and therefore investable) to me is that they are probably building a very very broad base of client companies that they are doing relatively cheap work for. These are companies that can be sold all kinds of value-added and more sophisticated types of recruitment services at some point in the future ...especially if and when the market returns to being a bull market.
My guess is that if James Caan has a significant interest in the business, it will morph into a more more traditional type of recruitment services company when market conditions start to return to normal.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | On Looker |
| Date: | Monday, 16th Mar 2009 11:59 |
| Views: | 62 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Why would it want to later morph into a traditional recruiter? – It’s entire USP is based on the fact that it delivers what the recruiter does for a low cost fixed fee.
I agree that £295 is probably all that a CV shifting job is worth and that it’s likely that, as you pointed out, the fee is FROM £295 hence a full service would push the fees to £695, but even at the top level it’s still great value for the employer and cheap compared to what they may have been used to in the past and a fraction of what traditional agencies charge.
Putting to one side the argument that “why earn £695 to do a job when you can earn £3,000 for the same amount of work” recruiters can’t ignore the fact that fixed fee is moving into this space in a big way.
Compared to other business outside of the industry you could argue that a business operating a fixed fee recruitment model with the margins that webrecruit are making can still possibly be a very profitable and viable business. As this concept gathers more traction recruiters won’t be able to charge 5+ times as much for the same service. This model will challenge traditional recruiter fee structures – will it not?
Don’t get me wrong, It’s obviously not going to appeal to recruiters already in the market because let’s face it, who wants to slice their income by 90%! But for new entrants, a slick digital operation like the model webrecruit operate producing mass placements on fixed fees is an attractive business – you can’t get away from that.
Turning this on its head, can any recruiter tell me how you can justify a client paying you a fee of say £2,500 for a regular administrator on say £ 14k p.a, when they can:-
a) Post the job on say Monster for £295 and do the job with in-house HR
b) Go to a fixed fee recruiter like webrecruit, who for £695 will place the job and save them the hassle of doing the work by own HR and will provide all the screening, application shifting and short listing for them – i.e. the full service.
I’m trying to play devil’s advocate here, but I’m struggling to see where the value for traditional recruitment will be, longer term (apart from say in top draw head hunting firms) as this concept takes further hold in the market.
Can a recruiter seriously justify £3-4k fees (and significantly upwards in some cases) for their service?
Is it not the case that fix fee recruitment is not cheapening the recruitment sector but moreover, it’s really exposing it for the rip off that employers often perceive it to be?
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mitch |
| Date: | Monday, 16th Mar 2009 13:28 |
| Views: | 60 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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It depends on the market and the job disciplines being recruited. In examples like the one you pointed out, there is enormous scope for recruitment businesses to automate the offering and provide candidates that cheap. And they wouldn't necessarily re reducing their income by 90% if they could raise their job to placement ratio by 90% would they?
Plus there are so many other factors to consider, too many to mention here.
And ...recession or no recession, there is always going to be a talent shortage in many many job disciplines above the 50K salary mark. That kind of work will always require specialists ...although I personally think that helping companies develop their own internal knowledge banks, Talent Pools, ERPs and direct sourcing strategies is the way forward rather than being at the mercy of over-priced recruiters calling themselves 'headhunters'. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Stephen O'Donnell |
| Date: | Monday, 16th Mar 2009 13:43 |
| Views: | 56 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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It should be noted that the Webrecruit model is based on the fee being billed up front, and not on a contingency basis.
If a recruiter is working on a vacancy exclusively, and all their work is billable, then it starts to make more sense. Filling only 2 out of every ten vacancies, on a contingency basis, means that the fees have to be higher to cover the work done on jobs other agencies fill.
I'm still not a fan though, and can see it working in certain sectors only. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mitch |
| Date: | Monday, 16th Mar 2009 13:53 |
| Views: | 54 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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That thought crossed my mind too Stephen, as the more I thought about it the more I couldn't see how they could successfully bill that many invoices.
So it's really just a glorified automated job posting service then?
Wow ...such innovation. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Liz Maguire |
| Date: | Monday, 16th Mar 2009 15:08 |
| Views: | 55 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Don't worry guys just as long we continue to provide our clients with a value-added service there will always be a place for a "full service" agency rather than just hitting them with 400 CVs.
I'm not too sure what all the fuss is about, Webrecruit have been going for 8 years and in fact I have come across better models in the market.
Liz |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mitch |
| Date: | Monday, 16th Mar 2009 15:13 |
| Views: | 62 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Yeah but Webrecruit have been validated by James Caan.
Because James Caan has been on the telly and as everyone knows, if something or someone has been on television it/they must be especially valid. Or better than those that haven't.
Television is king. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Permanent Recruiter |
| Date: | Monday, 16th Mar 2009 15:37 |
| Views: | 59 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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I'm not here to defend Web Recruit but £2mn turnover based on a fee of £500 or thereabouts is not a bad achievement.
Sure it doesn't mean that we're all about to go out of business but there's no doubt it will give employers a cost-effective alternative for which they may well be able to get reduced rates from agencies.
With regards to the 400 CVs, as I understand it companies such as Web Recruit do the CV filtering which used to be one of the easiest ways of persuading a client not to use a job board or service such as this. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Liz Maguire |
| Date: | Monday, 16th Mar 2009 15:56 |
| Views: | 58 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Hi Permanent Recruiter,
What about organising all the people that you want to meet with? Don't believe the hype and forget turnoever - IT IS ALL ABOUT PROFIT!!!
What's the betting that all CVs will now be filtered in Lahore by My Caan's offshore resourcing? |
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| Reply To This Thread |
| Re: Does flat fee Recruitment mark the death of th |
| Author: | Permanent Recruiter |
| Date: | Monday, 16th Mar 2009 16:33 |
| Views: | 65 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Hi,
I'm half tempted to buy their accounts for 2008 to see what their profit margin is!
Fair point about the Lahore offering, would fit in very nicely.. Sure I totally agree about meeting the candidates and the profit thing (seriously no need to patronise there) but you (and I) have no idea as to how profitable they are.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Recruiter |
| Date: | Monday, 16th Mar 2009 17:40 |
| Views: | 75 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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What about this then?:
"And, if we don't fill your vacancy within four weeks we offer a unique 100% money back guarantee i.e. no hire, no cost, no risk!"
So they must be filling loads of vacs & doing something right or they would have no money! So they are more than just a glorified contingency recruiter.
Thought this was interesting too:
"What's more, with our flat fee recruitment service you can employ a number of candidates from one vacancy. That's right, if you're looking for multiple people for the same position in the same location we'll regard this as one role and charge you one fixed fee - thus potentially saving you even more money."
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mr J Reed |
| Date: | Wednesday, 18th Mar 2009 08:52 |
| Views: | 63 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Thanks for that insightful response Bec, demonstrating not only your in-depth knowledge of the recruitment industry, but your personal understanding of the flat fee model with Webrecruit offer. If only all consultants had such a valid input into this discussion…… the world would be a better place. I do hope you reserve some of your hugely insightful opinions for other forums, as we wouldn’t want to be the only ones who have access to your vast array of recruitment industry knowledge and professionalism.
JR
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | You can call me Sir |
| Date: | Wednesday, 18th Mar 2009 09:26 |
| Views: | 56 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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JR, Far too serious.
To be honest, most of what i read on here --and i read this every day-- is 90% the same people, slagging the same things every day. Promoting their own business every day. Your heads are so far up your own backsides tbh.
And JR, sarcams, and a basic example of that. i think perhaps bec's response has caused more of a chuckle than your oh so witty response. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Michelle Jones |
| Date: | Wednesday, 18th Mar 2009 13:05 |
| Views: | 96 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Interesting discussion! I had to have some input as part of my business operates a fixed fee model.
- WR do charge c£695 per vacancy (upfront cost) and I believe they turned over c£2million last year. They do & have been offering lower rates more recently. It is a good model, like you said – been around for 8 years. Their money back offer is basically a credit against another role, a re-run of the vacancy or as a last resort your ££ back. They have an 80% success/fill-rate, which is impressive – like Stephen says – most traditional recruiters wouldn’t have that success.
- I don’t think it makes a mockery of what traditional recruiters do - it simply offers clients an alternative to the traditional method. Clients are more than aware of the additional value using a traditional recruiter can offer and there will always be a place for such a service.
- Peanuts/Monkeys - that’s quite insulting to a clients judgment in selecting candidates. Fixed fee recruiters provide them with a shortlist of candidates (not all the applications) and the client interviews and makes an offer from that. They use the same methods as most other recruiters – so why would they attract monkeys?
- We all know that due to the way recruitment advertising and candidate attraction has evolved over the last 10 years that we can ‘recruit’ faster, better and at far less cost than before. I spoke with a client (recruitment consultancy) recently who used to spend @ least 250k a year on attracting candidates - he now spends 20% of that and gets far more candidates @ a very low ‘cost per registration’ than he ever did. Why then do recruiters still charge the same fees to clients? Your bottom line costs (especially on advertising) have reduced dramatically – so it just means your margins are far healthier but the cost benefits haven’t been seen by the client.
- You know that it isn’t difficult to attract the candidates – it is just time consuming to filter the good ones to present to the client – fixed fee recruiters do just that. As a model we know this works for clients and will continue to grow. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Confused |
| Date: | Thursday, 19th Mar 2009 14:46 |
| Views: | 64 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Their site states they have access to over 500 sites - presumably they've paid quite a considerable sum in jobboard fees which is going to dig in to the profit somewhat, judging by some of the sites they've listed. Although Monster is noticeable by its absence... |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Michelle Jones |
| Date: | Thursday, 19th Mar 2009 20:53 |
| Views: | 55 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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From what my clients tell me they have a network of c60 'job-boards' which includes aggregators (which WR dont obviously pay for). When bulk buying I suspect they spend between 120-150k a year on advertising not any more than that. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Comparethemeercat |
| Date: | Thursday, 19th Mar 2009 21:24 |
| Views: | 62 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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A message for 'Confused'...
I've just had a look at their site and there's no mention to 500 resources AND there is a Monster logo. Are you sure you're talking about the same company the rest of the party is?
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | What costs? |
| Date: | Friday, 20th Mar 2009 00:37 |
| Views: | 62 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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You will probably find that all the process is run from India which reduces the operational costs. The Indian manpower would not only service webrecruit but also traditional RPO services to companies and agencies. The costs of these job boards is probably being shared between a number of different companies and therefore job board costs to webrecruit will not be as high as you would imagine (Im guessing).
I think it's an interesting model and one that is sure to do well against generalist high street agencies. There is room for them and specialist full service agencies. Good luck to em. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | hmmmser |
| Date: | Friday, 20th Mar 2009 09:17 |
| Views: | 63 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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webrecruit are based in london, with people working from london. they have a small team maybe only 1 person in scotland. im led to believe its all handled within the UK. not India. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Liz Maguire |
| Date: | Friday, 20th Mar 2009 13:16 |
| Views: | 52 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Interesting thread which I have been following all week. I have been working as a freelance HR Consultant for the past 20 years and it is certainly interesting how the industry appears to be rapidly changing.
I 've been doing a lot of research this week on low cost recruitment services and just by punching in LOW COST RECRUITMENT into Google its amazing to see how many companies out there doing something different.
I am still of the old school generation but if it works good luck to them.
And as I mentioned earlier this week in no doubt James Caan's Greenwich Bell will play a part in this. Will candidates be sifted in Lahore (not sure I an comfortable with that). With regards to job boards postings they will have to be bought by Webrecruit and I doubt Mr Caan’s other recruitment investments will want their jobs with the Webrecruit branding.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Onlooker |
| Date: | Friday, 20th Mar 2009 13:45 |
| Views: | 57 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Hi again,
You all assume that because James Caan has invested into the company that he will associate other firms he has financial interests into this one.
Im not saying this is the case but it COULD be that his investment in this fixed fee firm is just that. A single investment.
The firm may be run as a stand alone company with very little imput from James other than him being a shareholder |
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| Reply To This Thread |
| Re: Does flat fee Recruitment mark the death of th |
| Author: | Jay Cholewinski - Webrecruit |
| Date: | Friday, 20th Mar 2009 14:26 |
| Views: | 59 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Dear All,
I have been reading your comments over the last few days with interest. Michelle has actually provided the most accurate information so far and has prompted me for a response. Thanks Michelle!
I am one of the Directors at webrecruit and thought I would give this discussion some hard facts.
- We are based in Exeter and employ 17 staff. We also have a full time team in Lahore supporting us. Which we have been working with for the last 3 years.
- We work with more online job boards than any other organisation in the UK. We currently work with over 60 UK job boards - which do have a combined network of over 500 sites.
- Last year we turned over just short of £2m and made close to £500K profit.
- I agree with many of you that some agencies charge disproportional fees to the effort involved.
- We have recruited for virtually for every industry and sector.
- We are currently running at 83% success rate on all vacancies placed.
We did start something very new in the recruitment sector back in 2001, with the intention to offer clients with a real alternative to traditional methods. We do not see our model being the end of the traditional agencies, however no one could have predicted the phenomenal response this new recruitment model would have. And 8 years later, 100,000s of candidates and 1000s of businesses are still benefitting from our unique approach to recruitment.
I wish you all well with your ventures!
Best regards,
Jay. |
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| Reply To This Thread |
| Re: Does flat fee Recruitment mark the death of th |
| Author: | Permanent Recruiter |
| Date: | Friday, 20th Mar 2009 15:12 |
| Views: | 60 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Well I say fair play to you Jay.
I remember updating my business plan in about 2004 and looking at a SWOT analysis and identifying your model as one which was a real threat and so it's proved.
There's no doubt that those figures will make some of the people on the forum eat their words. Pay peanuts, make lots of profit I say!
There still remain many in the industry who believe that their fees of 25%+ are justifiable and sustainable in the longer term. My view is that more and more companies are becoming cute to online recruitment and the savings that can be made and this will continue to have downward pressure on margins.
This should kick a few off I suspect. |
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Fact |
| Date: | Friday, 20th Mar 2009 17:48 |
| Views: | 59 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Jay just a question, and I am only saying this as you are talking figures but why do your published accounts on Companies House state that your profit for year end July 2008 is £41,587?
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | mmm |
| Date: | Friday, 20th Mar 2009 19:35 |
| Views: | 65 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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webrecruit.....
Why dont we all outsource our recruitment to third world countries.... yeah probably 895 pounds is 25 procent of the yearly fee in those countries.....
our cost base is the uk so we wont be dropping our fee........... |
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| Reply To This Thread |
| Re: Does flat fee Recruitment mark the death of th |
| Author: | kj |
| Date: | Saturday, 21st Mar 2009 10:40 |
| Views: | 59 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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hahahahaha..... this is not about uk companies dropping fees. They use mainly frontoffice services based in pakistan.
average wage in pakistan, white collar, 700-800 pounds per year.... their fee, 295?, equals still 25-35 percent.
This is not about being a unique proposition, a good value for money, this is all about reducing cost bases by using the internet and other technology as such. In other wors, same happened to call centres a while back, and guess what, they are all back.
this model will work well for standard roles, but still you need to add value...
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mitch |
| Date: | Monday, 23rd Mar 2009 09:33 |
| Views: | 60 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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All that Webrecruit is proving is that money can still be made by charging a price that is a lot more commensurate with the amount of effort expended.
But all it is doing is offering a cheap alternative to getting candidates that regularly peruse job boards and apply for badly written ads for jobs at the 'rank and file' end of the market. Now, I'm not saying that all of those candidates are crap or that many of them are not worth hiring ....just that it will never be the answer to finding vertical market specialists, people with relatively uncommon skillsets and people who network to find new jobs or who only apply to companies with good reputations or companies that consistently portray a dynamic employer brand in their recruitment communications. There are a lot of candidates like that.
And all the while that there is, there will always be a market for consultancies to charge 20-25% if they have vertical market expertise, genuinely impartial candidate assessment skills and can offer real consultancy to their clients in how to help that client recruit more effectively. That will increasingly mean them not hiring commercially inexperienced people under 30 to knock the phone out all day every day and to have absolutely no commercial or recruitment credibility when they get to speak to a hiring manager.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | OnLooker |
| Date: | Monday, 23rd Mar 2009 11:18 |
| Views: | 67 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Mitch
What you mean is that it will never replace a blue chip head hunting service or even a full recruitment service done properly?.
But the fact is that many recruiters simply don’t do the job the employer expects them to do, many are lazy, greedy and have become just CV forwarding services, can’t be bothered to try to understand the client’s job remit and will simply submit any old candidate – this is the real problem. Many don’t know what a good recruitment service is or should be like.
Fixed fee has its place and will grow as long as you have poor industry standards with loads of recruiters in the market that don’t deliver or do a quality recruitment job, hence making fixed look like a better option and more financially viable for the same service (which it’s not where a recruiter does the job properly).
Employers perceive recruitment agencies in the majority of cases as an expensive waste of time and I’m sorry but good technology automation can replace them. If an employer gets sent a pile of CVs from a recruitment agency and then has to short list who they want to see, the employer may as well have used a fixed fee service that does the same thing.
Bottom line is that as long as fixed fee recruiting firms like webrecruit deliver and contingency firms don’t, fixed fee will become the standard especially for lower salary level candidates.
As I see it, I would agree that a contingency service based on finding top draw candidates to the client’s needs and detailed remit will always be of value and is worth paying for, but probably less than 1% of recruiters provide this service properly. As for the rest, fixed fee will wipe the floor with them.
IMO the recruitment market is likely to divide from here into two tiers, fixed fee on an automated basis for regular, easy to find candidates up to say £25k a year salary and blue chip contingency service on a percentage for professional headhunting and recruitment advisory for harder to find candidates over £25k. I bet many fixed fee providers will offer both services?
Meanwhile, all these high street recruiters not providing any real value, just doing a cv shifting service will be out of the market.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | Mitch |
| Date: | Monday, 23rd Mar 2009 12:48 |
| Views: | 58 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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Onlooker
I agree with the sentiment but the practicalities of the real world will mean that agencies who do not aspire to the standards you've itemised will still be able to win business simply through the ignorance of the people they're selling to.
You see it's not just about the CV shufflers ...they are the least dangerous because they are relatively easy to get rid of because they are mostly crap at selling. The other types of agencies that need reining in are those that hard sell what I call 'quick fix' candidates.
I've already talked about HR's fallibilities here in another thread. What also has to be factored in is the sheer terror that many line managers have when they have to recruit staff for their own teams.
Most of them hate doing it (especially interviewing) and therefore will abdicate it to HR or will allow agencies who are stronger at selling than delivery to con them into thinking they have the answers ...often these agencies 'answers' are candidates doing similar jobs for similar companies who they have blagged into being interested through a combination of poor assessment and appealing to their baser instincts (like money) ...all of which is attractive to many line managers because they don't have to do any training or much management because the person already knows the job. These are the 'quick fix' candidates I mentioned earlier.
Trouble is that the best candidates are the ones who move into jobs that represent logical career progression for them rather than those candidates making a sideways move. How many times have we all interviewed candidates who have spent their best years moving from company to company doing similar jobs? And how many of them have really been any good? This isn't what talent acquisition/management is really all about.
So while there is that much ignorance/incompetence inside client companies, there will be a market for agencies who are not as professional as the market would like them to be.
The best way to combat this in my opinion is for companies to insource their own recruitment ...especially for those jobs in the 40-100K salary range.
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| Re: Does flat fee Recruitment mark the death of th |
| Author: | liz |
| Date: | Tuesday, 24th Mar 2009 13:46 |
| Views: | 61 (excluding Digests and RSS feeds) |
| Category: | Fees and Terms of Business | | URL: | http://web.ukrecruiter.co.uk/forum/Forum/read.php?i=178412 |
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I haven't but am considering doing it Joe. You might want to put your email address down.
Would also be interested in hearing from anyone regarding practicalities of this. |
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