SMEs spend £100K+ on unnecessary recruitment fees

Latest data has revealed that many SME’s with a headcount of 250 are spending, on average, £116,545 annually on recruitment fees.

According to the Consult Inhouse report, companies are spending this amount even if they’re not increasing their headcount, with the recruitment specialist believing that this highlights how there is often a lack of visibility around total staffing spend.

Steve Lorde, Consult Inhouse Co-founder & Director, commented, “The financial burden which comes with relying on recruitment agencies to manage the procurement of your business’s most valuable assets should not be underestimated – but often business leaders and HR teams lack visibility around total staffing spend.

“As our analysis shows, the cost of managing permanent staff turnover alone can have a significant impact on the bottom line. Add to that the additional costs which are incurred when sourcing and securing senior hires and niche skillsets – where recruitment fees are often double the average – and it is easy to see how the amount of cash spent on agency fees can quickly spiral. That is before you even take into account managing contingent workers or actively growing headcount.”

He added, “Historically, the arguments ‘for’ and ‘against’ bringing talent acquisition in-house were fairly balanced. Businesses essentially had to weigh up whether they were willing to forgo the relationships and reach that their external providers boasted, in order to retain control of recruitment decisions and ownership of their brand. However, in the digital age, external recruiters no longer have the ‘edge’ that they once sold as their key differentiator.

“As a result, small and medium enterprises which would previously have housed talent acquisition activity within more generalist HR functions – or allocated resource to focus on administering the relationship between external agencies and business hiring managers – are increasingly considering alternative options.”

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