Private recruitment agencies started operating commercially in Malta in the 1980s, offering recruitment services of a general nature. In 1995, specific legislation was introduced to regulate the duties and obligations provided by such agencies (LN 127/95).
There are currently more than 30 local organisations that have a licence to provide recruitment services on a commercial basis. Most recruitment agencies provide specialist recruitment services, such as accounting, finance, IT and gaming, whereas there are still a number that provide general recruitment services.
The rise in popularity of recruitment services may be attributed to the overall general success of such organisations to identify and source appropriate human resources to client organisations. Moreover they do so within acceptable timeframes and in a much more efficient way than if such organisations sought to recruit new employees using traditional recruitment processes.
From a client organisation’s point of view, a significant advantage of using recruitment agencies is the fact that these organisations are specialised in understanding business requirements and sourcing potentially suitable candidates.
Moreover, most recruitment agencies will carry out the initial screening of candidates and ensure that client organisations only meet those candidates who may potentially fit the organisation’s needs.
From a candidate’s point of view, being registered by a recruitment agency means that a candidate is being recommended for employment, which is equivalent to a reference from a reliable source.
Both client organisations and prospective candidates benefit from two key factors. First, confidentiality is key, and this is guaranteed to both. More importantly, client organisations are saving on time, effort and resources that would otherwise have to be devoted to the recruitment and selection process if an agency is not used.
Similarly, prospective candidates get to know about career opportunities that may possibly not be advertised through other means. On the other hand, since recruitment agencies are outsiders to the organisation, they are at a disadvantage when it comes to interpreting business requirements unless they are made aware of these.
Recruitment agencies are becoming a fundamental business partner to turn to for recruitment and HR requirements
Whenever an organisation considers carrying out the recruitment process itself, there are a number of inherent specific costs normally incurred in the run-up to the first interview.
When considering these costs, one also has to remember the additional costs that would be incurred if:
a. No suitable candidate is found;
b. A suitable person is employed, yet for some reason, this person leaves the organisation within three to six months;
c. If one had to take a conservative estimate of the guarantee offered by leading recruitment agencies, one can safely say that this would equate to at least one-third of the total estimated cost of €2,400, which is an approximate opportunity cost of €800.
Considering the costs involved in the recruitment process, and without considering the possibility that undertaking this process may not result in filling the respective vacancy, the total cost an organisation is incurring when carrying out its recruitment amounts to approximately €3,200.
This is excluding potential opportunity costs, such as the lost income, output or performance the organisation incurs from the unfilled position.
If such opportunity costs were included in the total cost estimate and equated against the placement fees of recruitment agencies, clearly the financial benefits of using recruitment agencies are significantly greater than the cost involved.
One also needs to consider the fact that some recruitment agencies operate on a no-placement, no-fee basis. So, if the client organisation does not employ any of the prospective candidates put forward, then there are no fees charged by the agency.
When the same agency is used repeatedly, a business relationship and better understanding of the organisation is developed by the agency, which is subsequently able to provide a personalised and even more efficient service.
Recruitment agencies are becoming a fundamental business partner to turn to for recruitment and HR requirements.
Robert Delia is an HR and training consultant within CSB Group and head of vacancycentre.com.