The format for recruiting fees is outdated. Its also extremely difficult to break because of major corporate contracts that still base fees as a percentage of compensation. A service business like accounting or legal, recruiting should be billed as a function of hours invested in a particular search. There are many situations where a $300,000 position requires far less time investment than a $120,000 position based on hiring parameters, yet the recruiting fee for that service by the same resource is 3x greater. In today’s model, the Fees are most often based off compensation, a policy that started in 1965 and has outlived itself. Even worse, the evolution of social media and the ability to identify individuals online has allowed research time to reduce greatly while fees continue to rise based on inflationary salary increases. That’s great short term news for the field, but skyrocketing fees will tempt companies to hire resources internally that can offset this expense. The longer a bull market and employment growth lasts as a trend, the larger these internal departments will grow until the next dip hits. Then there will be a surplus of HR professionals in the market.
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