Using a Recruitment Firm: Worth the Fee?

By Dr. Larry E. Shear

When one of my associates was having some discomfort due to stomach pains and a fever, he immediately called a Gastroenterologist for an appointment. He did not consult with a pharmacist nor did he first talk it over with some of his 'all-knowing' relatives. He immediately went to see a specialist.. an expert. Cost was not an imperative issue in light of resolving his problem. He knew that the value of the service he sought was well worth the investment. His ROI (return on investment) was improved health.

Medical offices and healthcare institutions are more reluctant, at times, to deal with what is essentially the GUTS of their organization….the best staff available to meet their needs. Organizations quite often will pay top dollar for consulting firms, for accounting expertise, for billing systems, for operations consultants and for auditors that promise improved business results. However, when it comes to top-notch employees, there is a tendency to attempt to cut corners.

The enigma rests in the fact that if an organization had hired the best talent available, then the cost of all those so-called experts could have been avoided, and the bottom-line of the business greatly enhanced.

Recruitment fees vary dependent upon the services that are provided, and the willingness of the search firm to adjust fees (negotiate fees). However, firms that do, indeed, lower or negotiate fees without a reciprocation, typically do not value the worth of their services.

What Should a Recruitment Firm Provide?

Know-How

Data Basing

Reach

Cost Effectiveness

Confidentiality

Selectivity

Timing

Consultive Input

Goal matching

Follow-Thru

Screening

Local Interests

Expanding the Universe

Develop Interest

Bottom-line

Know-how A good recruiter knows the market better than most. A Good recruiter knows the medical climate of your primary marketplace, -- the 'players', the political climate, the managed care scenario, the patient mix, and the comings-and-goings. A good recruiter also knows what it will take to attract the quality individual that you seek. A good recruiter will provide an unbiased perspective on the recruitment marketplace, and will share strategies with you to better improve your market position in the hiring process.

Data Basing A Recruitment firm that is well established is very well networked throughout the medical community. It is via this network that the recruiter can 'reach out' to a variety of candidates and resources to help locate the best person for your opportunity.

An advertisement will only surface those individuals who are reading the classifieds. Ads typically solicit responses from physicians who are seeking to leave a situation, rather than move toward one. And, I, for one, would be more interested in attracting a candidate who saw my opportunity as a career advancement, rather than as a means of 'escaping' from an undesirable situation.

A recruiter is able to surface individuals who do not read the classifieds. A recruiter will surface potential candidates who are comfortable in their current situation, but, who, for the right potential, would consider a career advancing move. And, are not these the best candidates? Are not these the type of folks you should want to hire?

Reach Most recruitment firms have working relationships with similar firms throughout the country, through which your opening will be made known. Thus, rather than limiting your search to a particular geographical area or readership, your situation will be promoted nation-wide. The reach of a recruitment firm is considerably broader than can be achieved via advertising, trade shows, word-of-mouth, or other such means that may be considered. Coast-to-coast exposure insures that your job opening will get the maximum interest.

Cost Effectiveness

Hiring individuals is a costly undertaking. Hiring the wrong individuals is even more costly. And not hiring the right people when you need them can be devastating.

The costs that are deferred or reduced by the use of an recruiter include:

The hidden costs associated with recruitment are appreciable. And they become even more dramatic, if, after going through your own search and then coming up 'empty', you need to turn to a recruitment firm.

Confidentiality

When you run an advertisement, you must either rely on a P.O. Box or use your name and phone number.

If you use a P.O. Box, you limit the number of responses. Afterall, what fine upstanding Physician is going to send his CV to a blind ad?

And if you use your true name and phone number/address, you will get responses from any number of unqualified applicants, pharmacy representatives, insurance agents, equipment salesmen, etc. who scour the classifieds weekly. I recall an ad that was run for a General Surgeon that solicited a response from an Airline Pilot. Needless-to-say, he did not get the job, but was more qualified than many who responded.

Using a recruitment firm provides for a level of confidentiality that will not only screen out unqualified candidates, but will also allow you to deal with:

Selectivity

A definitive benefit of utilizing a recruitment firm also relates to selectivity. You can specify the nature of the individual for whom you are willing to pay a recruitment firm to find.

You can indicate the preferred educational background, specifics vis-à-vis training, background, values, etc, and other preferences that you cannot typically spell out in an advertisement. Effectively, you then are able to utilize a recruitment firm to screen out undesirable candidate profiles.

Recruitment firms will not discriminate based upon race, color, sex, origin of birth, handicap, religion, creed, etc, of course, and neither will you. However, you can indicate the characteristics and qualifications in a candidate, that you would pay a recruiter to find for you . This does not mean that you would not consider others for the position… it just means that you would not pay a fee to a recruitment firm for them.

Timing

A good recruitment firm can surface candidates for your review within a 2-4 week period, and often times, quicker. If you have an immediate need, it may take too long to place an Advertisement (3-4 months), wait for the results, screen through respondents, etc., to meet your needs. Besides, only 15% of all positions are actually filled via advertisements.

Added Capability

"In-house human resources, no matter how effective, view the market place through an imperfect or misrepresentative prism and tunnel vision is their occupational hazard", so writes the Fordyce Letter, of  St. Louis, Missouri. The 'we-do-not-use-outside-recruiters' is a penny-wise and pound foolish stance, in that contingency search firms do not charge a fee unless they deliver a candidate who is hired. Why, then, would an Organziation limit its ability to attract the best talent available?

In-house recruiters are vulnerable to the pressures of their job. Afterall, they were probably hired so as to eliminate recruitment fees, and bring the function under the roof of the Organziation. However, it has been proven that in-house recruiters are inhibited by "internal politics and cultural dimensions which do not hinder the outsider" (Fordyce Letter).

The in-house recruiter faces the pressure of filling a position, and often is tempted to do so, regardless of cost. Afterall, his/her job is structured around filling positions with success or failure being measured by the number of physicians that are recruited and retained. The tendency to hire someone , regardless of cost, causes the development of poor or excessive contractual arrangements, budget deficits, and unhappy physicians. This is the pressure that the in-house recruiter faces and must deal with, and must do so without the resources, expertise, network, and developmental abilities of a  search firm.

Consultive Input

A recruiter is able to share insights into the market place in terms of what it will take to attract the person of the caliber that you seek. Such issues as salary, bonus, partnership packaging, perks, etc. are all items to which a recruiter can address and provide valuable input.

A recruiter can also serve as a negotiator to bring two parties together, functioning as a third party 'go-between'.

Often it is difficult for two parties who will be working together on a medical/professional plane, to enter into detailed discussions about salary and who-gets-what. This is a role that a recruiter is well adept at playing, thereby sparing both parties from any uncomfortable haggling.

Goal Matching

A good recruiter will speak to you in terms of your goals and objectives and the importance of filling the position at hand. The Recruiter will then go about the task of finding appropriate candidates who have similarly matching goals and objectives. Only in this manner, can one be assured that career-minded individuals will be more apt to be retained , in what should be a WIN-WIN situation.

Follow-Thru

A good recruiter is not only involved with search recruitment and placement. A good recruiter is concerned with retention, as well.

Afterall, a recruiter is a business person. It is important that placements 'stick' and that all parties are happy with the process. A good recruiter wants to do more business with you; wants to get referrals from his placed candidates; and wants to get a good reference from you when needed.

A good recruiter will maintain contact with both clients and candidates to insure that both are pleased with the situation. If problems arise, a recruiter then becomes a confidant in intervening to work out any differences or uncomfort levels that may have evolved. 

Screening

A good recruiter may rule out individuals who appear to have all the qualifications that are sought, after having conducted a detailed interview with a candidate. Effectively, as a third party, a recruiter is able to discuss issues that may not surface in the course of a routine interview, that could impact a candidates ability to accept a position.

Fundamental issues may include:

Other issues may include:

And still others, factors that would inhibit a move…

Local Interests

I would strongly recommend that an organization utilize a recruitment firm with representation in the same State. A local firm has a better understanding of the medical community, is aware of the regulations and nuances, knows the attractions, the social and cultural amenities, the medical community culture, and can 'sell' the area in a more effective manner. There is also an added incentive in satisfying local needs that recruiters aspire toward. I utilize a primary care physician that I, myself, recruited to the area.

I find it extremely puzzling when I talk to both candidates and clients that utilize recruitment firms on an exclusive basis, that are officed outside the State. If you want to relocate to Florida.. use a search firm that is located in Florida… if you want to fill a position in Georgia, use a search firm in Georgia! It makes sense.

Expanding the Universe

There is a hospital in the southeast which limits its use of independent search firms because "it has physicians ringing the doorbell all the time to see what is available". Ergo, they do not need to pay fees.

My response to them is quite simple. Would you go to see a physician who got his job by going door-to-door to find a position? I wouldn't, either!

I would also suggest that they are limiting their selection process to only those that ring their doorbell. Does not this do a disservice to the medical community and to the patient population which deserve and expect the best physicians available?… and not merely the best bell ringers? Dr. Quasimodo, please step forward!

I would also think twice before I go to see a physician who sprayed his CV all over town until he found someone who would hire him. This indiscriminate practice suggests a sense of desperation, does it not? We have a number of solid clients who will not consider a candidate who has spread his CV around. Their perspective is that 'something is wrong' with a professional who would employ such tactics.' It suggests a sense that lacks sensitivity, pride, and discretion.

Develop Interest

A good recruiter will be able to develop interest in your opportunity with physicians who might not have been drawn to the situation, otherwise. By discussing your practice scenario and by sharing the potential,.. by customizing the conversation to address the objectives of the potential candidate…. a position may be presented in a much better light and sound more attractive than any advertisement could possibly portray.

Find the Hidden Candidate

Ad responses solicit a wide and varied range of resumes. Typically, when faced with the task of reviewing a pile of CV's, the objective becomes 'elimination' rather than 'selection'. This is because the objective is set at getting through the pile.

Unfortunately, very qualified candidates may be eliminated through this or any resume review process. That is because, in answering an advertisement, respondents send generic CV's. If they happen to put the buzz-words that you seek on their CV's, they become candidates. If they do not put the buzz words on their CV's, they run the risk of being eliminated even if they are well qualified!

A good recruiter will interview a candidate to determine qualifications whether or not such is expressed in the CV. Afterall, most of us have terrible CV's! Further, we do not hire CV's --- we hire people. And we certainly do not hire people on the basis of how well they can write a CV! If we did, we might never fill our vacancies.

The Bottom-Line

Whenever you are considering the use of a recruiter, two factors need to be viewed in order to make a definitive decision.

Will I get a better candidate from a recruiter? The answer should be "yes". However, in reality, if the recruiter does not surface a better candidate… one that you deem worthy of the fee,… DO NOT HIRE THE CANDIDATE. If you use a contingency search firm, there will be no fee associated with the recruiter's effort UNLESS you hire someone from them! Thus, it costs you nothing to have them search on your behalf.

If they succeed by producing a candidate that is worth the fee and that you hire, everybody wins. If they do not produce a candidate that you hire, you have not lost anything.

How do you determine whether the candidate is worth the recruitment fee? Assuming that he/she meets the job specifications and the profile that you seek, ask yourself; ...

1) How much will I lose if I do not to have someone hired and at work at a particular date? How much will I lose by having the position vacant?

2) How much will I gain over the next year if I have someone in the position by a particular date? What will having this position do for me?

The sum of the responses, above, will allow you to measure your RETURN-ON-INVESTMENT, when compared to a recruitment fee.

For instance, if a new hire will generate $300,000 in collections for you over the next year, and you paid a $20,000 recruitment fee, the your ROI would be 15:l. That means for every $1.00 you invested in a fee, you will get back $15.00.

Whether at the race track, looking at a loan investment, or perhaps buying stock options, a 15:1 RIO is pretty good, isn't it? The ROI developed via utilizing a recruiter offer should offer a very clear-cut decision for you: you've got nothing to lose, and a lot to gain.

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About the Author . Dr. Larry E. Shear has served the healthcare community since 1968, having worked in administrative capacities at Massachusetts General Hospital (Boston, Mass), Kings County Hospital Medical Center (Brooklyn, NY) and with the Lutheran Hospital Society of Southern California (Los Angeles, Calif.). He has lectured at UCLA, USC, CalState and Arizona State University. Dr. Shear is currently the Chairman of the Board, Shear Healthcare Resources, Inc., a consulting and search/recruitment firm in Sarasota, Florida.

 

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