Tips on Working with a Third-Party Agency

The decision of whether or not to hire additional recruiters can be a struggle. During hectic times, the workload can be overwhelming. It can seem like an easy solution to increase the flow of resumes by opening up positions to numerous agencies. However, it is important to educate these staffing firms on the details of the job, the process, and the environment. Without this knowledge, they won’t have the information they need to deliver quality candidates. Using third parties can be a valuable strategy. But, being proactive and communicating with them every step of the way takes time. Without these extra conversations, positions won’t necessarily be filled more quickly.

Traditional Staffing Firms

Working with a staffing service, particularly one that specializes in an industry, can be a vital resource for a company. An open door allowing them to talk with hiring managers about each job helps them understand your culture and company goals. Even if these solid relationships are built, turnover internally within a staffing firm can have an effect on timeliness and the understanding of your needs.

When dealing with a small talent pool, there can be plenty of debate over who owns a candidate and for how long. To eliminate issues in the future, make a few agreements with agencies in advance. Since they often use some of the same resources a company may already be paying for, be clear upfront about the sources from which candidates will be accepted. If two agencies present the same candidate, you may want to decide in advance who would get the fee. It could be the one to present the opportunity to the candidate for their approval first or the one to present the candidate to you first. Third parties also need to know if the organization is willing to consider paying a fee for a former employee. If your head spins thinking about the groundwork and ongoing issues, why not change the way you work with third parties?

Make Staffing Firms Part of the Team

Rather than only relying upon third parties as a resume supplier, use them as a trusted contract recruiter that enlarges the department without a permanent hire. As an employer working with third parties, Brown Shoe Company has built a unique partnership with The Grapevine Group. An offsite representative of Grapevine acts as a Brown Shoe recruiting team member in all aspects of the hiring cycle. This adopted team member is trained on the internal processes and has access to all our systems. Just like staff recruiters, this person does everything from open to close for assigned positions. Working with hiring managers, this representative learns the needed skills and the department fit. Job assignments are in all departments and levels within the organization.

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In addition, Grapevine’s staff completes various projects such as competitor organizational-chart building, sourcing for targeted searches, and scheduling interviews with downsizing companies. The amount of time this outside firm is used fluctuates based on recruiting needs. Grapevine employees have also conducted training at team meetings and have contributed ideas by providing a non-bias outside viewpoint.

Partnership Has Payoff

Your favorite staffing firm may be open to this model since an agreed upon, guaranteed hourly fee can be charged. To weigh the benefits of this type of relationship, determine the time and money spent within the traditional staffing firm model. Calculate the amount of hours your staff spends with agencies (they discuss the position details, your culture, and how your organization works, as well as communicate about resumes and serve as the go-between for scheduling and offers.) Add to this the 15% to 30% fee if someone hired was sourced by the agency. Compare this total to the hourly cost of a contract recruiter, who is actually filling positions without ongoing internal staff involvement.

There are additional benefits for the third party that include job satisfaction and retention within their own staff since they get to see the result of their work in a different way. They also get a true view of your company by being a relied-upon partner. Traditional third parties build and maintain strong pipelines and often have more time and experience with cold calling than many corporate recruiting teams. They succeed in filling difficult openings and can also do an outstanding job of being the go-between for the company and the candidate. However, there is no denying the extra time and communication needed to get everything scheduled, explain the process, and get to the offer stage.

At times, corporate recruiters need the extra help traditional staffing firms can provide by digging into the market for access to more candidates. But when you have an increase in workload, consider using third-party sources as an extension of your talent acquisition team.

Tami Retzlaff is the Global Training Strategist for the Talent Acquisition department at Brown Shoe Company. She founded the Madison Recruiters Network and served as president for four years. Throughout her 10-year recruitment career, she has led corporate recruiting functions, developed innovative ideas to improve practices, and designed as well as managed training programs to deliver upon business strategies.

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6 Comments on “Tips on Working with a Third-Party Agency

  1. Great article Tami. Too many company authorities are clueless as how to properly manage and leverage the relationship with external/search firm partners.

    I have a great manual/pamphlet I authored on the subject located at http://www.searchwizardry.com Look under ‘Free Downloads’ and ‘Maximizing Search Firm Success: Why some companies fail while others consistently succeed to derive benefits from search firms’.

    Some use search firms as a commodity. Only to cause the recruiters to discover others are working on the same project … and the result is each recruiters decides to abandon the project rather than work on the assignement.

    I would add companies often fail to consider hybrid, engagement fee or retainer considerations if they desire better quality service.

  2. Tami is spot on with TPR’s. A good relationship is a symbiotic one, the success is mutual, and great candidates get placed in the right positions and everybody wins. To build that relationship takes in investment in time and trust and open communication. Too often though companies see third party recruiters as the equivalent of ordering a pizza…’Give me a SVP of supply chain & an order of cheesy sticks.’ No time is given to understand the profile, hiring process, etc. They sometimes forget that at the end of the day we are talkng about real people, not a large two topping delivered in 30 minutes or less.
    Contingent search firms like mine operate where my time is my dime…until a company makes a hire. I work for the clients that give me a decent shot at ‘helping me help them.’ I prefer clients that spend time on the front end of a search so I have an understanding of the position, the ideal candidate profile, corporate culture, etc. I shy away from the ones who will not invest their time before I agree to invest mine. Consequently, the companies I work with that I come to understand, I have a stake in their success, and they have an advocate for their company who has a different logo on his business card.
    My advice to companies thinking about going the TPR route is to build those relationships before a staffing situation becomes one of last resort. It won’t cost much, and having the right list of agencies on speed dial is another valuable tool to have in the tool box.

  3. A good subject to bring up. I’ll add:
    * Look for opportunities to recognize their contribution in your own organization (i.e. an on-site luncheon)
    * Find ways to equip agencies with more than just a description – culture, marketplace dyanmics etc.
    * Ask for them to be part of the problem solving situation (is a turn key solution better than hiring a bunch of temps?

    etc.

    cheers – William

  4. Tami has covered most of the key issues when engaging third party agencies. However, there are some other considerations when using these resources. In my career as a staffing executive I found that third party agencies where a valuable resource when faced with a short time frame ramp up in a specific area…when I had to hire large numbers of employees quickly, especially when those hires had high-demand targeted skills. I also used third parties to fill niche jobs in specific labor markets where my regular staffing workforce did not have much traction. In each of these cases, speed and a targeted hire trumped cost. When recruiting highly experienced professionals, it has been my experience that the break even point for highly skilled in-house recruiters vs third parties is between four to six hires per year. If cost is key and you are comfortable hiring and managing a highly skilled staffing workforce, in-house recruiters may be the best route. However, due to cyclical nature of business, most companies will still have a need for solid third party partnerships. A number of years ago I obtained a recruiting best practices survey of the top companies in the world. Only two of the best five companies said that their annual staffing planning was effective. In my experience just-in-time staffing still seems to be the default business standard especially for companies that are staffing to support future business or emergent projects. This reinforces the need to have established third party staffing partners.

    In all engagements it is critical that the agency be provided the information to find and qualify top level candidates and that the agency have direct experience recruiting in the market. Whether the agency is allowed direct access to the hiring manager depends on how you use your regular staffing professionals. If the staffing is truly outsourced then direct access may work. If the staffing is a supplement, then it may make more sense for the company recruiter to serve as a gatekeeper, ensuring that the agencies keep their eyes on the ball and making sure that all applicant flow and applicant communication is handled appropriately. The agency will use the direct manager contact as a business development opportunity. That is to be expected and is good business practice. If you are ok with this, allow direct contact. However, if you are engaging the agency for a specific project and expect to disengage when the project is completed, you may want to use your recruiters as a gatekeeper. You absolutely want to avoid creating a competetion between the agencies and your own recruiters. Each will do what they can to preserve and protect their jobs and the staffing manager will become a referee in a staffing free-for-all, not good for either party. It is important that all parties understand their roles and responsibilities prior to the commencement of the engagement.

    And I urge any company which engages a third party agency to execute a solid written agreement. It protects both parties and avoids future conflicts.

    Benton Howie

  5. As I point out to my corporate recruiter friends, there are two kinds of recruiting: Process and Project. Corporate recruiting is geared toward the Process: posting jobs, using the ATS, building a pipeline for similar, ongoing, predictable jobs.

    Where third party recruiters excel is Project recruiting. Taking one job, and working it until you identify and facilitate the hire of that person.

    I have no doubt that corporate recruiters have the capability to do that, but they simply don’t have the time. With all the meetings, compiling metrics and statistics and all of the other corporate duties, you lose the focus that allows you to make that kind of committment to a specific hire. The biggest comment I get from hiring managers is that HR does not seem to give their job the attention it deserves.

    I find myself asking the hiring managers to cut the corporate recruiters some slack, and telling them that is why they called us in to help.

  6. Thanks, Frank,

    I used your link (‘searchwizardry’)for the ‘free download’ about working with ‘Maximizing Search Firms’, it requires registration, which I did and once that was done, it only led to ‘Buy Now’. So much for your free article..I tried navigating through ‘free download’ and it kept going to ‘Buy Now’. I’m sure you’re not using ERE to build sales, so please explain how this can be downloaded ‘FREE’…thank you!

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