The number of recruitment agencies offering pre-emptive bonuses to lure experienced consultants is on the rise thanks to a shortage of good candidates, according to a rec-to-rec specialist.
Historically, when the rec-to-rec market is as tight as it is currently, agencies start to lift base salaries and overall wages in the industry start to inflate, says Watson Collard director Craig Watson.
Yet this time agencies are playing it a bit smarter and rather than increasing their permanent fixed costs, they are offering guaranteed initial bonuses to prospective hires, Watson told Shortlist.
"What a lot of our clients are starting to do now is guaranteeing bonuses. [They'll say] 'You show me what you're currently earning and what you're currently billing, and for the first six or nine months while you bed in, we'll pay that as a bonus'."
While this is not a new tactic, especially among higher-level agencies and search firms, it is becoming more prevalent among traditional recruitment companies, says Watson.
Good temp desk recruiters hardest to attract
The hardest candidate to lure to another agency – regardless of sector – is one who is running a lucrative contractor desk, says Watson, because they have an ongoing billing record and will be due bonuses.
Generally, the main reasons good consultants leave their employer is because they've been overlooked for a promotion, don't get along with their colleagues, don't believe in the company's direction, or dislike their management.
If these factors aren't present, a guaranteed bonus might entice them to make a move, Watson says.
Guaranteed bonuses can also be more attractive as most consultants are on a commission structure set according to their base salary; if they "come on a higher base salary, they've got to bill more before they can start earning commission".
Rookies require less 'de-programming'
More recruitment companies are hiring rookies from outside the industry, for the benefit of not having to "de-program" them from the bad habits of competitors, Watson says.
"I would say over the last 18 months it's become a key trend... Some of my clients have had experiences where they've brought people in from competitors who have learnt things differently at the competitors than the way they do things", he says.
The other key reason agencies are more willing to hire beginners is that there just aren't enough seasoned recruiters looking to change jobs.
"The process of recruitment is not a difficult skill to learn for those people who can learn. It's more of a personality trait, and the desire to be able to build relationships – both candidates and client."
If managers can hire new consultants from industries where they have experience building relationships, it's fairly easy to teach them the process of recruitment on top of that, says Watson.
Other industries that provide skills transferable to a recruitment setting are usually those with a business-to-business service or sales focus, as opposed to business-to-consumer, he says.
"[So], rather than selling screws at a local Bunnings, they need to be used to selling a service so they can understand people's pain, and how to find a solution for it."
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