Why It May Be Time to Ditch Your Staffing Agency

Recently I spoke with a hiring manager who’s having a tough time finding contractors for two open positions.

The positions remain unfilled after nearly three months, despite the organization having a long-term contract and close working relationship with a staffing agency.

The agency has pre-screened and recommended a number of supposedly qualified candidates, but those candidates haven’t panned out once they’ve been interviewed and vetted on-site.

They looked good on paper to the agency, but they lacked the specific hands-on skills and experience the organization needs.

Unfortunately, the hiring manager can’t turn to other agencies or to the freelance economy and online talent networks such as Graphite. This is because there’s a long-term contract that requires the organization to hire all contract employees through the agency.

Both jobs are new positions that must be filled by contractors because they’re project-specific and will only be needed for the next two to three years.

But time is slipping away and work is piling up as the organization struggles to find the right expertise.

Hearing this story reminded me why it’s so important to think carefully before entering into a contract with a staffing agency.

Traditional agencies offer a lot of potential value, but there are also some major disadvantages and drawbacks:

Common Problems with Staffing Agencies

1. Contractual Obligations

As the above case demonstrates, being locked into a contract can get in the way of good hiring.

If you can only hire contact positions through a single source, you’re limited to the candidates one source can deliver and the quality of its screening and due diligence.

If you’re going to contract with an agency, make sure you have the freedom and flexibility to go elsewhere, at any time, if it can’t fulfill your needs. This may also require changes to your own organizational policies and procedures.

2. High Costs

Great staffing agencies are skilled and experienced in finding and maintain pools of excellent candidates, but they’re also expensive.

Typically you’re going to pay a premium in wages to reward your agency and cover its costs while paying your contractor. If you end up hiring a contractor permanently, you’ll also pay a sizable finder’s fee or buyout for the privilege.

3. Outdated Methods

Traditional recruiting and contracting processes are outdated and often inefficient. Many staffing agencies still rely on job websites, ads, and time-consuming networking and cold calls to find and attract job candidates.

Unfortunately, this precludes the precise targeting and high efficiency needed to find great candidates quickly. It also fails to account for the fact that a huge portion of the U.S. workforce is now shifting to on-demand talent platforms and independent contracting, and they’re bypassing traditional recruiters and staffing agencies.

4. Substandard Candidates

The big value proposition for a staffing agency is that it will supposedly advertise open positions, pre-screen candidates, and save a hiring organization a lot of time and effort.

However, many agencies will settle for “good” or “decent” candidates or try to recommend their existing contractors rather than invest the time and money to finding truly exceptional talent.

It can also be difficult for some agencies to pre-screen candidates if they’re not intimately familiar with the specific qualifications and requirements of a given job. A job description is one thing, but understanding your industry and the true day-to-day requirements of a specialized position is something else entirely.

In some cases, the agency may simply be unable to deliver the right candidate or deliver one in a reasonable amount of time, which can leave your organization short-handed and suffering.

Why On-Demand Talent Networks Are the Better Alternative

There may still be a place for a staffing agency for many businesses, but many are now complementing their agency or ditching staffing agencies entirely in favor of on-demand hiring.

Online networks such as Graphite provide a fast and seamless way to hire pre-qualified candidates with highly specialized expertise and proven industry experience.

Candidates are pre-screened according to precise requirements and based on a deep understanding of the expertise required in the marketplace.

For example, at Graphite, we focus on experts in finance, investment banking, strategy and marketing. We pre-screen all of our professionals against the highest possible qualifications for related positions such as long-term or interim CFOs and CMOs, part-time investment bankers, business strategy consultants, and contract marketing experts.

Graphite professionals average 10 years of experience, often in management and executive roles, each with at least two years of experience working at a major firm. Qualified firms include the big three consulting firms of McKinsey, BCG, and Bain & Company, as well as Fortune 500 companies and other similar organizations.

As opposed to waiting for a staffing agency to recommend candidates, you can log onto Graphite and find top-tier job professionals right away, including searches by job function, keywords, length of experience, and geography.

You can also see a complete profile for each candidate, including employment history, educational background, and reviews from other Graphite users who’ve hired them for their project and contracting needs.

When it comes time to hire, you can count on dramatically lower costs than relying on a staffing agency.

Part-time contract arrangements are available at rates of $50 to $200 per hour, which is 50% lower than the cost of most consulting and staffing firms.

In addition, you can hire candidates full-time at a 75% lower cost than using traditional recruiters.

Try Graphite & Experience the On-Demand Difference

If your staffing agency isn’t delivering the candidates you need, or you just want to leverage the rapidly growing trend toward online and on-demand hiring, visit us at Graphite today.

You can quickly create an account, sign in, and start your search of our global pool of on-demand experts in finance, investment banking, strategy and marketing.

If you have any questions or need assistance, our staff is also here to help. Call us at (415) 805-7047 or email us at help@graphite.com.

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Greg Andrade

Greg Andrade handles Graphite's marketing and communication programs. A graduate of the University of Michigan, he worked in corporate marketing for 15 years before turning his focus to virtual marketing consulting for startups and global businesses.

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