The current buzz is that the war for talent that we experienced 5+ years ago is making a comeback. The looming talent shortage may be great news for technology specialists with in-demand skills, but it’s a bit scary for the companies that need to hire them.

If you’re a company thinking about engaging a staffing agency, how do you decide which one to work with? Below, I’ve outlined a few key points to ask when evaluating IT staffing and recruiting agencies to determine if you are choosing the right company.

1) Screening

  • How does the company screen candidates before recommending them to you? Do they do behavioural and technical interviews?
  • How do they train the recruiters performing the interviews?
  • Do they meet candidates in person?
  • What type of writeup is provided from the screening process? Just a resume, or more in depth notes on candidate interviews and test results?

The questions above will provide insight into how thoroughly the company will screen candidates before presenting them to you. Companies should be doing at least three levels of screening, and one of these should be a face-to-face interview. If they do all of the above, it means the likelihood of them finding exactly the candidate you want is much higher.

2) Placement Fees and Markups

How can a company save money by working with a staffing agency?

  • A recruiting company takes pressure off internal recruiters or HR staff
  • A good recruiting company will devote at least 8 hrs a day to find top candidates
  • A staffing company will broadcast your job on major job boards and various social media platforms (cost is included in your fee)
  • A staffing company will know how to headhunt from competitors giving your company a┬ácompetitive advantage
  • Most agencies will have over 50 years of recruiting experience that they can draw upon when screening talent
  • A good staffing company can recommend candidates to you from a vast network of talent that they know personally through previous placements

Normally, without a recruiter working for you, your company would post a job, get 200 resumes, and then have to search for the needle in the haystack. A recruiting company will know exactly where to find the needle for you, and save your company a lot of time in the process.

What is a fair cost for placement services?

Normally, 20% is the average fee for placement services. 15% of a placement’s first year salary should be a minimum. Some companies will charge less, but you need to consider that you get what you pay for. If a company is charging 10% they likely do not have the same resources, database, processes and networks that a company charging 20% would have.

One thing to consider when trying to negotiate a price with a staffing agency – if you force a recruiter to decrease their price, the amount of services will decrease by the amount you force down the rate. The lower the price, the less resources can be applied to your search, and you’ll have less access to top of the line talent.

It makes sense to ask for a rate reduction if your company has a number of people to hire or you agree to sole-source an order to a company.

  • What kind of a guarantee should you expect?

Typically, you should expect at least a three month guarantee. The higher the rate, the longer the guarantee. At Stafflink, we offer a full money back guarantee, but that’s not typical for most recruiting companies.

3) Services

  • Does the company do criminal and credit background checks? Do they do reference checks? How many?

These services should all be included in your price.

Another value-add service some recruiting companies include is a job description writing service. A good agency will offer to write the job description. They’ll sit down with you and disseminate what you’re looking for from the job and then do the appropriate write up.

A good agency will also be able to provide salary and contractor rates. If you’re starting a new company and you’re not sure what to pay a developer, your recruiter should be able to give you a pay range for different positions. Again, remember, you get what you pay for. Top talent is not cheap.

4) Other Questions To Ask

  • Current clients?
  • What are their areas of specialization?
  • How do they handle placements that don’t work out?
  • What types of jobs do you specialize in, geographic areas of specialization?
  • Where do you get the candidates from?
  • How long does it take you to find the candidates?

A good recruiter should be able to present you with a couple of candidates within 3 days. Senior roles, take longer.

  • Ask for examples of testimonials from current clients
  • Ask for examples of placements of the same type of job you are recruiting
  • If you are looking for a product manager, ask when the last time they placed one was

Did I miss anything? How do you evaluate a staffing company? How does your company balance cost with quality when hiring new staff?


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