Recruitment Agency vs Direct Hiring

Jun 19, 2023 | IT, Tips

We are in the middle of a long and sustained talent crisis. Candidate availability is decreasing by the day, and job vacancies continue to rise. Albeit at a slightly slower rate over the last few months. But the success of your business depends on your team. The people you hire have a direct impact on your success. So, when it comes to your next vacancy, you may be asking which is best for you – recruitment agency vs direct hiring.

We’ve asked our expert consultants to share their insight on the pros and cons of both to help you make that all important decision.

Agency vs Direct

We’ve written at length about the benefits of working with a specialised recruitment agency, but let’s compare some key areas when it comes to recruitment agency vs direct hiring.

Writing adverts

This may sound like a simple process, but don’t be fooled. Yes, it’s true that we can all write an advert stating the responsibilities and requirements. However, in the current market, that is not enough! Candidates are less likely to apply for a job with a list of demands. They want the story, the feeling, a sense of what you stand for. They want the benefits, the future opportunities, and a sense of being part of something important in the world.

If you don’t have experience of this, you are likely to find that your advert will be a bit of a ‘damp squid’ and won’t attract the people you need to make your business a continued success. Agencies are writing adverts day in, day out. They know what it takes to get the best response.

Access to candidates

A recruitment agency will have access to many more candidates than you will if you recruit direct. Not only do they have a large database of experienced candidates, but they are also able to advertise in lots of different ways. This means that you don’t just get the best people who are currently on the market. A recruiter will also headhunt suitable candidates for you using a combination of technology and their personal network. This means that your shortlist should be the very best candidates for the job.

Direct hiring tends to be focused on adverts, website pages and the odd social media post. The reach is not as great as that of a recruiter. With direct hiring, you are unlikely to have the tools you need to get your advert out as far as it needs to go. Lots of companies use their own employees to recommend candidates. Whilst this is great in some instances, it can have an impact on your diversity. Something to bear in mind with any employee referral scheme.

Sifting through CV’s – Recruitment Agency vs Direct Hiring

Depending on how much time you have, it could be a benefit for you to read through all the applications you receive if you do decide direct hiring is for you. The advantages are that you see not just shortlisted candidates, but every single response. This will give you a real insight into the market (if your job advert is great!) and may give you insight on what you need to change to attract the best.

You’ve also got to have the technical knowledge when it comes to IT. You may be looking for experience in a particular piece of tech. And unless you’re aware of other technologies where skills can easily transfer, you could be missing out on a great candidate!

Either way, be prepared to spend lots of time looking at unsuitable CVs as the pay-off for direct hiring. However, if you don’t have the extra time needed to go through the process, using a recruitment agency van be a valuable way of finding new talent for your business. Shortlisting is completed on your behalf, and you only have to choose who to interview from a shortlist of CVs.

Employer branding

You’ve probably heard more and more people start to talk about employer branding. It’s a vital part of the direct hiring process. When was the last time you reviewed yours? What does your Glassdoor say about you? How are your Google reviews? There are many things to consider when recruiting direct when it comes to how you are perceived in the market.

However, we know that there are some really great companies to work for our there who don’t have any employer brand at all. And if this is you then using a recruitment agency is the best idea. Recruitment consultants are highly skilled at attracting candidates to opportunities. They sell the opportunity first and the company a very close second. This gives the added benefit that any questions candidates have about your values, culture, and more, can be answered directly. So, whether you have a strong employer brand or not, you’ll still get the best candidates using a recruitment agency.

The same can be said for candidate experience too. If you already have a robust recruitment communication process, great, direct hiring could be for you. But remember that candidates expect a response within 24 hours of their application now. They expect to be kept up to date at every stage in the process. Do you have the time and organisation to do that effectively?

Cost

There’s a general misconception in the market that using recruitment agencies can be costly. But this is usually when it’s looked at in isolation and not compared to direct hiring. If you wanted to do the same work as a recruiter does, it could end up costing you considerably more. And this cost increases if you’re not regularly recruiting. Recruitment agencies spend hundreds of thousands of pounds behind the scenes to make sure that they are providing the best service and the best candidates.

You’d be amazed how much it costs to just advertise a job on one job board, let along over 30! Access to CV databases is also at a great cost, and let’s not get started on the costs associated with LinkedIn! Then there’s the time spent searching out the best candidates. At Langley James, we allocate at least 3 full days just to shortlist candidates for you. And in the current market, this can take longer too.

But there’s one huge benefit when it comes to cost. Recruitment agencies will not charge you a penny until they have been successful, regardless of the time spent on the role. This is something you can’t do with direct hiring. You take a financial risk every time you recruit direct – there are no guarantees of success.

Recruitment Agency Vs Direct Hiring – Summary

If you have lots of time on your hands, and an ‘easy to fill’ role then direct hiring will probably work for you. But, if you have a harder to fill role but you still want the very best candidates, without having to invest your own time, you need the help of a recruitment agency.

About Langley James

We have been helping companies to attract and retain the very best IT talent since 1999. But we don’t just simply find the best candidates. We can advise you on the current jobs market conditions. Share data on average IT salaries. Talk to you about the benefits that candidates are looking for. In fact, we do everything we can to help ensure that you get the very best people for your team. Get in touch with our team to find out how we can help you to recruit the best!

Contract v Permanent – Which is Best for Your Company?

Mar 14, 2023 | IT, Tips

Are you currently looking to hire in IT? If so, there’s a lot to consider. And it may be that the first thing you need to decide is the benefits to you of contract v permanent. Which will you choose when it comes to filling your next IT role? There are advantages and disadvantages of both. Our consultants share their thoughts to help you make the right decision.

What’s the difference? Contract v permanent

A contractor is someone who provides their services to your business. Typically, a contractor is hired for a set period of time, or a set piece of work. A daily rate will be agreed, along with deliverables, deadlines etc. Contractors are usually self-managed and can be left to work independently based on the project brief.

A permanent candidate is an employee that works for you on either a full or part-til basis. They are expected to produce work based on their contract of employment and in return, they are paid a monthly salary on a continuous basis.

Pros and cons of hiring a contractor

When it comes to contract v permanent, it’s important to consider the pros and cons of each. Here’s our top 3 for each –

Pros of hiring a contractor

• Hire as and when you have a need. If you have a project that needs completing, or you are experiencing a temporary increase in work, a contractor could be the perfect answer. Also, if you suddenly have a drop in demand, you don’t have to continue to use the services on a contractor. This can save your business money but only paying for the services of a contractor when you need them.
• It can actually work out cheaper. Yes, it’s true that contractor rates are usually more expensive than a permanent salary. However, it can still work out cheaper to hire a contractor. With a contractor, the daily rate is all you pay. There’s no paying into pensions or other benefits. It gives a certainly of cost so works particularly well if you have a set budget.
• Higher level of expertise. Most of the time, when you hire a contract, you tap into a huge amount of expertise. Having someone in your team who has a lot of experience working for multiple companies can really be more beneficial than you realise. Using their past experiences, they can bring new and exciting things to your business, meaning you could be in a position to tap into this a fast track certain areas of growth.

Cons of hiring a contractor

• Continuity. If you want to turn the services of a contractor on and off, you could end up disappointed. Once a project is complete and the contract has come to an end, the contractor will move on to their next role. Therefore, if you want the same contractor back again a few months later, it may not always be that simple.
• Day rates can be high. We touched on this above. But, day rates can be high when compared to the salary of a permanent member of staff. Contractors looks for higher rates due to the risks associated with the role not being permanent
• IR35 rules – be aware. You can face large penalties if you are in breach of IR35 and need to take extreme care. Make sure that you work with a reputable agency to ensure that you are hiring contractor legitimately.

Pros and cons of hiring a permanent employee

Pros of hiring a permanent employee

• Higher level of control. With an employee, you decide when, where and how they work. They are employed directly for you (and in most cases, only you if full-time), so you get to call the shots.
• Commitment. When you hire a permanent employee, you both agree on the details of an employment contract. This is a long-term consideration for the employee. Therefore, when they agree to be employed, they are fully dedicated to your company.
• Employee engagement levels. A permanent employee has made a choice to join your company as part of their career development. They are more likely to align with your values and are therefore likely to be highly engaged.

Cons of hiring a permanent employee

• Commitment. Both a pro and co on hiring permanent employee! You need to be sure that you will be able to pay a monthly salary, plus all the additional costs, every month despite ups and downs.
• Employee rights. There’s lots to remember here, from holiday pay, redundancy, maternity, sick pay and lots more.
• It can work out more expensive. There’s lots of things that can affect your costs when hiring a permanent employee. From paying agency fees, to higher salaries, you need to have a budget up front. However, to retain your staff, it’s likely that you will also have to invest in training and development too.

Contract v Permanent – which will you choose?

We’ve been helping companies to recruit the very best in IT since 1999. We can advise you on which route is best and can even give you detailed insight into the IT jobs market. Each month, we produce our IT Salary Guide which looks at average salaries and day rates across all areas of IT. We also produce a monthly Report on Jobs so that you can see what’s happening in the market. As ever, we are here to help. So if you are looking to recruit into your IT team, get in touch with our expert consultants today.