· 1 min read · News

Recruitment agency fees are a rip-off, say employers


Three quarters of UK businesses claim to feel 'ripped off' by the rates recruitment agencies charge.

According to online recruiter TalentPuzzle, UK businesses spend £2.6 billion on external recruitment each year, but 76% of business owners and HR staff surveyed felt that they were not getting value for money.  

More than three quarters (77%) were frustrated there wasn't any consistency in recruitment rates and rebates, with businesses paying as much as 25%-30% in placement fees.

But employers do recognise the value of working with recruitment agencies, and 92% said they were planning to use an agency in the next six months.

Employers said the main reasons for working with recruitment agencies was the ability to fill specialist positions and solicit better candidates. But the research suggests recruitment agencies need to improve their service levels, as business owners and HR staff invest time briefing recruitment agencies, only to receive a lot of poorly-targeted CVs that don't meet their requirements. Over half (58%) felt briefing recruitment agencies can be a waste of time.

Virginia Raemy, CEO of TalentPuzzle, said: "With so little consistency and transparency when it comes to fees it is easy to see why employers can feel ripped off by recruitment agencies.

"Employers should have more power to set prices according to their budget. At a time when businesses are looking to reduce recruitment costs, the recruitment industry needs to start being more realistic and transparent, while ensuring the quality and targeting of CVs they send through improves.

"It is clear that both recruiters and employers need to improve the way they work together. They should have a symbiotic relationship, rather than seemingly working against each other. By working much more smartly and effectively together this would help raise the quality and targeting of CVs. This is a win-win situation for both parties, as it helps employers to reduce their time to hire and helps recruiters improve their reputation, increase their quality and hopefully increase their new business."

The survey of 250 business owners and HR staff at UK organisations, with up to 750 employees, was commissioned by TalentPuzzle. The research was conducted by independent research company Vanson Bourne.