If you need recruitment support when it comes to hiring software developers this blog will provide you with a rundown of why a recruitment marketplace can be a better option when compared to a Software Developer Recruitment Agency.
Coming up in this blog:
- What is a Software Developer Recruitment Agency?
- Pros of Working With a Recruitment Agency
- Cons of Working With a Recruitment Agency
- Recruitment Marketplaces: The Future of Tech Hiring
- Pros of Working With A Recruitment Marketplace
- Cons of Working With A Recruitment Marketplace
- Our Final Thoughts
One of the hardest challenges faced by every business is hiring the right people.
Finding the right people can be the make or break between a business thriving, surviving or failing.
It’s impossible to grow a business by yourself and building the right team can often prove to be challenging.
This is why for years businesses have utilised the support of recruitment agencies.
Working with the right agency to hire the right people can have a positive impact on the growth of any company.
At the start of 2022, there were over 30,000 recruitment agencies in the UK across a variety of different specialisms. Agencies tend to specialise in a specific industry. These industries can range between areas such as Tech, Hospitality, Healthcare, legal, Finance and many more.
Up until recently, hiring managers have been tied to either hiring internally or through a recruitment agency.
However, there might now be a better way.
Hiring via a recruitment agency marketplace!!!
Over the last 20 years, marketplaces have become a driving force in how we shop, travel and even order food.
From buying books on Amazon to ordering taxis via Uber, it was only going to be a matter of time before it was possible to use marketplaces to find and hire talent.
More than ever people want to work for themselves to become their own boss which has led to the explosion of freelancers hitting the market year on year.
The global Freelance Platforms market size was valued at USD 4530.44 million in 2022 and is expected to expand at a CAGR of 13.66% during the forecast period, reaching USD 9765.33 million by 2028.
This rapid increase in the freelancer industry has resulted in several marketplaces such as Fiverr, Upwork, PeoplePerHour & Freelancer.com popping up, which makes it easier for you to connect and work with freelancers.
Whilst these marketplaces can be good for hiring freelancers from various professions/industries, they have not quite hit the mark when it comes to recruitment.
This is where platforms like Giig Hire come into play!
Giig Hire is a recruitment marketplace that simplifies working with Freelance recruiters. Giig has a growing community of freelance recruiters worldwide which can be accessed via a universal contract and process which simplifies the experience.
At the time of writing, Giig has over 650 freelance recruiters across 34 countries and is growing weekly!
What is a Recruitment Agency?
So let’s start by chatting about recruitment agencies and the pros and cons you might experience when collaborating with an agency.
For anyone unaware…
A recruitment agency/employment agency is an organisation that specialises in matching employers and employees.
In the UK alone the recruitment industry contributes over £40 billion to the UK economy and is made up of over 30,000 different agencies working in various industries.
A business that’s experiencing a rapid period of growth might look to collaborate with a recruitment agency for support in finding and hiring the right candidates.
Recruitment agencies tend to make their money by charging a recruitment fee for every candidate that’s successfully hired.
The recruitment fee tends to be calculated as either a percentage % of the candidate’s yearly salary or a fixed fee ($) amount, which is normally agreed at the start of the process.
When picking a recruitment agency, it’s important to spend the time to understand the background of the company and the consultant that works there, to make sure you partner with a company that has access to suitable networks of candidates.
Once you’ve found an agency that you think will be well-placed to support you, it’s onto the terms discussion.
It’s important to get the terms and conditions locked down at the start, this way everyone knows where they stand when a candidate is hired.
Most recruitment agencies work on a contingency model.
The contingency model is when a recruitment agency will take no upfront money. The agency will only collect a fee when a role is filled and the candidate has started employment.
Another model that some recruitment agencies work to is the ‘Retainer Model’ this is when a recruitment agency takes an upfront fee for the work to be done. This is a great model for gaining commitment from recruiters as their time is paid for upfront.
Once the model has been selected and the terms have been agreed it’s time to kick off the recruitment search.
The first stage of the search process will be to provide the software developer recruitment agency with an overview of the role that you’re looking to fill.
It’s important to provide the recruitment agency with a detailed view of what the perfect candidate looks like.
By providing a detailed overview of what you’re looking for you will stand the best chance of them finding a candidate that matches your expectations.
After the recruiter has taken the brief they will then head off to the market to headhunt candidates for you to interview.
After submitting candidates to you for review, most recruitment consultants will keep communication with all parties involved in the process.
This is where a recruiter can add their value.
A good recruiter will be able to sit in between the hiring company and the candidate collecting honest feedback throughout the process.
This feedback can then be used to help make sure the recruitment process is run as smoothly as possible for everyone involved.
If after running interviews you find a suitable candidate that you decide to hire, this is where you will be required to pay the fee.
Most recruiters will invoice for the agreed fee on the candidate’s start date with 30-day payment terms.
Recruiters also tend to offer a rebate/guarantee period, should the candidate not pass their probation period.
So that’s a simplified overview of how the process works, so let’s talk about the pros and cons.
The Pros Of Working With A Software Developer Recruitment Agency
For me, one of the biggest benefits of engaging a recruitment agency is the ‘Time Saving’ impact it can have.
If you engage with a specialist software developer recruitment agency that has a good understanding of its market then they should save you time for two reasons:
- Their connections
A specialist recruiter who speaks with software candidates daily should have a network to start instantly searching through.
This should speed up the recruitment process, as they should be able to start speaking with software developers who might be interested in your role.
A good recruiter should make the recruitment process efficient, as they should be able to identify the wheat from the chaff in the first stage filtration process.
Any good recruiter will spend time speaking with candidates to identify which candidates look strong for a role before sending them over to you for you to review.
An experienced recruiter should send you a small number of relevant CVs that you then have to interview. This should save you time shifting through hundreds of applicants and conducting hundreds of introductory conversations.
However, this can also go the other way, as some recruiters get trigger-happy and send every CV that they come in contact with, which can result in time getting lost.
Access To Hidden Candidates
Good recruiters spend their days networking and chatting with candidates in their industry, with the aim of understanding who could be open to changing companies and what would persuade a candidate to change roles.
As the competition for top talent increases, the need for candidates to apply for jobs decreases.
The best candidates often find themselves receiving daily messages and calls regarding opportunities that they might be a good fit for.
This means that they will not apply to adverts that are posted online.
To stand a chance of getting to these ‘Hidden Candidates’ you must partner with a recruiter that is active in speaking with the passive market of candidates.
A good recruiter can give you great access to hard-to-find candidates who are not actively applying for roles.
However, like with all things, you get good and bad recruiters.
Some recruiters will spend their time chatting with candidates not found on job boards, whilst others will just crawl the job boards looking for suitable candidates.
Putting minimal effort into the headhunting process.
In the technology industry, a good Software Developer Recruitment Agency is worth their weight in gold!
The tech market is highly contested and good Software Developers will be receiving daily approaches from recruiters. A connection with the right agency could be the make or break when it comes to finding the right person for your role.
For situations where you’re recruiting for sensitive roles a recruitment agency can provide you with confidentiality and provide a level of discretion.
As a business owner or hiring manager, it’s not your responsibility to understand what’s happening in the employment market.
A good recruiter should have a good understanding of the market they recruit in and should be able to consult with you on things like salary brackets and time to hire.
This will help you to understand how much it will cost you to hire the right candidate and when you should start the recruitment process.
The Cons Of Working With A Software Developer Recruitment Agency
It’s no secret that recruitment agencies charge for their services!
As I mentioned at the start of this blog, recruiters will look to secure a fee for their services which can typically be a percentage of the candidate’s first-year salary or an agreed fixed fee that will be charged regardless of the final salary.
Most recruiters tend to work on a pay-on-success model, also known as the contingency model.
This creates a completely risk-free process for the hiring company, as you will not be charged unless you are successful in finding the right candidate.
Over the years recruiters have changed and adapted the way that they charge with the introduction of embedded recruitment and the RPO model.
To keep it simple:
Embedded talent is when a recruitment agency places one of its staff on-site for one of its clients.
This helps the recruiter to get a feel for the company environment and become a stronger member of the team compared to an external consultant.
I appreciate this point is a bit of a contradiction!
In the last section, I mentioned that one of the pros of working with a recruitment agency is time-saving.
So how can this also be a con?
Well, it comes down to the quality of the recruitment agency that you decide to work with.
Good recruitment agencies will save you time if they put in good work at the initial qualification stage.
They can also waste a lot of time if they just send through a large list of unqualified candidates.
This is why it’s important to make sure that you qualify the recruiter that you work with.
A good recruiter will save you time, a poor recruiter can end up wasting time.
The tech industry has historically poor turnover, with most companies only retaining staff for 1–2 years.
This is why it’s super important to find the right Software Developer Recruitment Agency to partner with.
If you partner with an agency that is only focused on filling roles, it’s highly likely that you will end up hiring the wrong candidates who will not stick around for the long term.
A good agency will focus on making sure that they find the right fit for both you and the candidate which will increase the chances of a longer tenure.
Another reason why it’s important to find the right recruitment partner.
Limited Company Knowledge
One of the most common criticisms of recruitment agencies is that they have limited company knowledge compared to an internal member of staff who knows the business inside out.
Which can be true!
If you’re partnering with a recruitment agency that’s supporting +10 clients at once, it’s going to become very difficult for them to understand your business in as much detail as someone who works within the organisation.
If you find a recruiter you can trust and build a good partnership with, I believe you can irredicate this issue.
Spending the time to make sure that the recruiter has a good understanding of your business will be beneficial for you, the recruiter and the candidates that go through the process.
Recruitment Marketplaces: The Future of Tech Hiring!!
Over the last 20 years, online marketplaces have played a crucial role in the way that we buy and sell products and services online.
From pioneers like Amazon & eBay through to the modern-day giants like Uber and Deliveroo, we have now become accustomed to transacting via a two-sided marketplace.
One of the biggest benefits marketplaces bring is centralising thousands of suppliers in one platform.
As the markets continue to grow you end up with service providers all over the place, all trying to offer the same service.
Which can be very confusing for the consumer.
Marketplaces like Amazon centralise suppliers, making it convenient for consumers to access the product they’re looking for.
Over the last 40 years, the recruitment industry has experienced these growing pains.
As the industry has grown exponentially agencies have popped up all over the place making it very difficult for businesses to navigate the sea of recruiters.
Enter the Giig Hire Marketplace!
The Giig Hire platform centralises Freelance recruiters.
Making it simple for you as an employer to hire via Freelance Recruiters rather than Agency Recruiters.
External recruitment has become time-consuming and confusing over the years and the Giig Hire platform is looking to put an end to that by simplifying the process.
At the time of writing this, the Giig Hire platform has over 650 recruiters located in 34 different countries and using the platform you can engage with any recruiter via the same contract and recruitment process.
You heard that right,
One contract and one process for recruiters based around the globe.
The vision of Giig Hire is to make things simple for you by allowing you to have a single channel for all of your external recruitment needs.
How does it work?
Posting a job on the Giig platform is simple!
In a matter of minutes, you can sign up for the platform by clicking on Sign-up for free.
The Giig Hire platform has no upfront cost or monthly subscription.
You only pay if you hire!
If you don’t manage to fill your role you don’t pay a penny to anyone.
If you could be interested in signing up you can click the link HERE to get started.
After completing the signup process you can advertise a role that you require support with.
When advertising the role, you set the recruitment fee that you are happy to pay.
After the role is published, freelance recruiters will start to apply!
Before connecting with recruiters you get the chance to review their application and performance stats on the platform.
After connecting with recruiters, Giig’s account managers will help you manage the platform to make sure that the recruiters understand the requirements and deliver good-quality candidates for you to review.
After receiving candidates via the platform, you can run the interview processes and decide who you would like to hire.
If you do successfully hire via the platform, Giig will invoice you for the fee when the candidate starts.
If the candidate fails to start, you will not be required to pay a fee!
The Pros Of Working With A Recruitment Marketplace
One of the biggest benefits of working with a recruitment marketplace is the consolidation effect.
Managing multiple agencies can often be a logistical nightmare.
You end up juggling multiple relationships, processes & contracts.
Marketplaces tend to put an end to this issue by pulling recruiters together under a single contract and process.
This consolidation makes it simple for you to engage with multiple recruiters.
As a business, you only need to worry about dealing with onboarding one supplier and managing one relationship.
Recruitment Marketplaces have the potential to have a wider candidate reach than agencies.
The Giig Hire platform currently has 650 recruiters that are part of the network and that number is growing week on week.
Whereas a traditional software developer recruitment agency takes time to hire people and scale. A recruitment marketplace like Giig can onboard recruiters at a much faster rate.
The Giig Hire platform is currently growing by just under 100 recruiters a month and each recruiter that signs up brings a new network of candidates.
Which you can gain access to without having to sign a new set of terms & conditions or onboard a new supplier.
The marketplace model can make recruitment cost-effective!
Marketplaces tend to drive competition in a specific sector which can generate competitive pricing.
For hiring companies, this can lead to cheaper recruitment fees compared to working with a recruitment agency.
This is also impacted by external factors in the market, so isn’t a guarantee.
You do stand a much better chance of cutting a competitive price in a marketplace compared to working with a high street recruitment agency.
Speed of Hiring
The exponential reach created by a recruitment marketplace also brings an increased speed of hiring when compared to using a recruitment agency.
When engaging with an agency you will have to wait for the recruitment consultant to go out to the market in an attempt to find the right candidate.
With a recruitment marketplace, you have a wider reach to recruiters, which means that you have a better chance of connecting with a recruiter who’s already in touch with the candidate that you’re looking to hire.
In any relationship trust is important!
Especially in recruitment,
Most marketplaces tend to adopt rating and review systems, where consumers can leave scores and written reviews for the suppliers that they have worked with on that platform.
This drives a level of trust and accountability within the market as the recruiters know they will be held accountable for their actions and that they could receive negative reviews which will impact their chances of winning future business.
The Giig Hire platform does adopt a rating and review system where recruiters are rated based on the quality of the candidate that they send and the level of their overall performance throughout the recruitment process.
The Cons Of Working With A Recruitment Marketplace
High Volume of Applicants
One of the downsides to hiring via a recruitment marketplace is the number of applicants you can receive.
The aim of the recruitment marketplace is to save you time and it can become more time-consuming if you have to sift through hundreds of applicants.
Especially if most of them are irrelevant.
At Giig Hire we try to tackle this issue by providing you with account managers that are assigned to your account to support you every step of the way.
This means that you get the benefits of the increased outreach, without the hassle of manually reviewing a high volume of applicants.
One of the downsides to working with agency recruiters is that you can end up with less control over the hiring process.
When you then add a recruitment marketplace into the mix, you end up with a process that has two middlemen. Which can cause the process to become disjointed.
This is when trust and communication become important. With the right teams and management in place, the process can still be handled well. However, with poor communication, you will often find that the process can go stale.
Recruitment Marketplaces do have the added benefit of the tech to help solve this issue.
Some recruitment marketplaces have communication tools and features embedded in the system to try to give you more control and oversight over the process.
Recruitment marketplaces attract large numbers of recruiters which brings a large candidate reach.
However, this can also bring a large variance in the quality of the recruiters and the candidates that you can access.
Where recruitment agencies are slower to scale, they also have increased control over the quality of the people they hire and how they act and behave.
Recruitment marketplaces have less control over the recruiters who are part of the network as they are not employees of the marketplace.
Again, this is why most recruitment marketplaces implement a rate and review system as a way to try and reduce the variance in quality.
Our Final Thoughts
So there you have it!
Our comparison of the pros and cons between a recruitment marketplace and a software developer recruitment agency.
Naturally, there’s always going to be pros and cons for both models,
So you have to decide what is going to work best for you,
Market trends might be the deciding factor in all of this.
If the gig economy markets keep going and more recruiters choose to start freelancing you would assume that recruitment marketplaces will become the go-to choice.
However, people often resist change…
So… If we see the gig economy industry slow down, recruitment agencies might maintain their position as the option of choice, when it comes to external recruitment support.