Hiring? Find the Right Recruitment Model

by Kyra

A KPMG report compiled for the Indian Staffing Federation, says that the temporary staffing sector in India will grow by 74% in four years. The Indian market, currently worth $ 3.04 billion is poised to grow to $5.3 billion by 2021.

When it comes to the hiring needs of companies, they change according to the company and the sector. So depending on level of engagement, exclusivity, long term prospects and other factors, many different recruitment models are present in the market. Here we will look into few examples.

Different recruitment models:

Contingency Hiring: In this type of hiring, whenever a company has an open position, it gives it to many consultants at the same time and asks all of them to source candidates. Only the consultant whose candidate is offered, gets money from the client company. Here the recruiters are not assured any fixed pay. Their revenue depends entirely on whether they can close positions or not. As the risk factor is high here, consultants charge more percentage for such type of recruitment. Generally companies pay the recruiters in terms of a specific percentage of CTC of the candidate. This is the most prevalent way of recruitment.

Retainer Search: Here a Recruitment Consultant works exclusively for specific requirements from the client. Payment is divided into two parts. He gets a fixed amount from the client for conducting the search, which is called the retainer fee. Other than that, if he makes offer, he gets extra money. For recruitment of senior executives like CEO, Sales head, etc, a very focused approach is required. In those cases, this method is preferred.

Exclusive Requirements: In certain cases, companies connect with recruiters for exclusive requirements.The recruiters in turn give an assurance to the client to close the position within a specific time period. If the recruitment consultant is not able to close the position in the agreed time, he needs to either close the position with a lesser commission or bear some penalty. All the hiring conditions are clearly decided in the contract at the beginning. Here the percentage of commission is less than contingency hiring because there is no competition.

Recruitment Process Outsourcing (RPO): The RPO model is gaining a lot of popularity at present. Here a client company outsources the entire recruitment process to a consultant company. The recruiters from the consultant company can either sit in their own office, or at the client’s premises. Here, the RPO partner is responsible for closing all the requirements. They take care of the whole recruitment process right from sourcing, scheduling, interviews and offers to join. The benefit the client company gets is that -- they don't have to manage their own recruitment team, which substantially reduces costs. But on the other hand risk is high, because if consultants don't understand the company culture and hiring plans properly, it can become disastrous. So, companies should choose recruitment partners with care. Because here we are talking about high stakes and longer duration engagement.

Outplacement: This concept came into picture during the recession period. Here If a company wants to lay off some employees to cut costs, they can hire a consultant to place those employees in other companies. The recruitment cost is borne by the current employer. Outplacement is not very popular till date.

Executive Search: Executive search teams only focus on senior level positions like: CEO, CTO, Sales head and similar kind of requirements. The method of sourcing for such positions is quite different from junior and mid level requirements. Here the number of potential candidates are less and they don't prefer to put their resume on the portals. So head-hunting, searching in networking sites and personal networks are the preferred way to hunt down candidates. For such recruiting, the commission is much higher as compared to other level positions. The team of Executive recruiters do retained search activity also.

Other than the above models, recruitment can be divided into two broad categories.

Permanent recruitment
Contract or Temporary staffing

Permanent staffing: Here the candidate, once recruited, stays in the company’s payroll as a permanent employee.

Temporary staffing: In case of temporary staffing/contract staffing, the candidate remains in the payroll of the consultant company through which he is recruited into the client company. He works with the client company for a limited time period. Generally companies prefer this model if the project is small or uncertain. This model reduces their long term costs. Because of its benefits, this model is gaining popularity with companies nowadays.

About the Author: Kyra is a Hiring Director at Alliance Recruitment Agency – an IT Recruitment Agency. She specializes in helping with international recruiting, admin recruitment agencies staffing in Dubai, HR services and Careers advice service for overseas and international businesses.

Facebook: https://www.facebook.com/Alliancerecruitmentagency/

Twitter: https://twitter.com/career_alliance

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