Posted on June 2014 By Speller International
So, when it comes time to recruit for your project, what really is the difference between a Specialist Recruitment Agency and a Consultancy House? Both avenues have huge benefits (and both are close to our heart) but let’s break it down and take a look at the cold hard facts. Here are some of the key decision-making factors around this tricky topic below.
WHAT’S YOUR M.O?
Let’s start by clarifying the business model’s objective for each firm. A Consultancy seeks primarily to provide business solutions and outcomes, where an Agency’s objective is solely to provide recruitment solutions and outcomes.
IT’S ALL ABOUT THE MONEY
While costs can vary dramatically depending on your needs and the scope of the project, one measurable constant is the margin. A consulting house will typically charge between 30 and 35% as a margin, although the cost of the project is often fixed, making it easier to determine the overall cost at the outset. On the flip side a Recruitment Agency will charge a lower margin of between 15 and 22%, but there is less of a definitive costing structure from the outset.
THE POWER OF THE PEOPLE!
One of the key questions when building a team is ‘What kind of candidates are available?’ With a Consulting House the candidates will be directly employed by the consultancy and typically assigned to projects at their discretion. This means the consultancy will select and deploy staff to you as they see fit. On the flip side, a Recruitment Agency will typically tap in to a network of preferred contractors whom they have placed in previous roles and know well, allowing a more hands-on decision from the client (that’s you).
GETTING TO KNOW EACH OTHER A LITTLE BETTER…
Many prospective employers like the opportunity to meet with candidates and interview them directly. With a consultancy, the client can request to do this. There is a big ‘but’ here however: it defeats the point of partnering with a consulting house as typically team members are assigned to the project by the consultancy’s management team. If interviewing and recruiting at the final stage is more your style, a Recruitment Agency could be a better option: with a recruiter you can interview as many candidates as necessary until you find your ideal match.
THE RIGHT FIT
The meaning of ‘the right fit’ varies depending on how you look at it. For a Consultancy the key is skills – meaning the best skills match is the best match to the project. For an Agency the focus is on a mixture of things: skills, cultural fit and personality.
A burning question when starting out with any recruitment effort is ‘How difficult is this going to be?’ the answer in both cases is above – it’s the job of both an Agency and a Consultancy to put the team together for you. The best part is that they both have rich pools of people to draw from, meaning your team should gel well and work together effectively.
WHO’S IN CONTROL?
The level of control, albeit from a distance, over who is on your team varies in any agreement based on your needs. However with a consultancy the idea is to manage the project on your behalf – meaning you can request to swap out consultants but the majority of the management is taken care of by the Consultancy. With an Agency only the hire is facilitated, meaning the team member is yours to manage – unless you ask for additional support.
AS LONG AS A PIECE OF STRING
Another amazing benefit to using an Agency or Consultancy is that you only have staff for as long as you need them. With a Consultancy, this is usually based on the length of the project. With an Agency, the length of the contract is all up to you.
TAKING THE NEXT STEP…
So what happens if you want to make a team member from your project group a permanent fixture in your office? Under an agreement with a Consultancy, this would be very rare as the consultant is often permanently employed by the Consultancy. On the other hand via a recruiter, this is an option – although a permanent placement fee negotiated between the agency and the client, would still apply.
One of the key benefits to using an external firm to manage your team is that the risk is absorbed by that firm – whether they are a Consultancy or an Agency. With a Consultancy, the risk is absorbed 100%. With an Agency the risk is mitigated, but once the client makes their decision they are responsible for their own outcomes.
WHO’S GOT THE BRAINS?
So who owns the intellectual property (or IP) on the project if you use an external firm? It depends: with a Consultancy, the IP is owned by the contractor and the Consultancy itself. With an Agency, the IP is all yours.
As you can see there are benefits to using either a Consultancy or an Agency (or a mix of the two) and who you use will be dependant on your preferences and needs. If you need more information or you have any questions we’re always here to help so get in touch!