Industry expects fee rises

08-12-2004

Recruiters start calling shots. Recruitment heavyweights are predicting a healthy rise in fees next year and the possibility of agencies being able to dictate terms to clients if the candidate-driven market continues.

After a two-year period with downward pressure on margins that forced some agencies to drop prices, the signs are that the market has turned on its head.

Chris Herrmannsen, managing director of Hot Group�s recruitment consultancy division, believes the low rate of unemployment, lack of skilled candidates and recruiters �learning from the mistakes of the last few years� could push up fees.

�There is enormous competition for candidates,� he said. �Companies will have to start looking at paying premium rates to make sure that they are first choice for talent.�

Candidates commonly have multiple job offers, said Giles Daubeney, chief operating officer of global recruitment agency Robert Walters. �This war for talent has the knock-on effect of upwards pressure on recruitment fees, as organisations realise that they have to pay to keep pace with their competition,� he said.

Tara Ricks, managing director of Joslin Rowe, agrees that after a challenging couple of years �it is encouraging, to say the least, to at last be in a position of strength when it comes to fees�.

She added: �The extremely candidate-driven market has created an awareness within the client base that if you insist on rewarding low and not appreciating value, you won�t see the candidates. But your direct competitors, who have taken the view of rewarding value, will.�

As clients demanded more value-added services such as diversity monitoring, salary surveys and market commentary, they would be �more amenable to a rate increase which reflects the additional resources needed to meet these demands�, said Ricks.

Domenic Donatantonio
RECRUITER

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