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Advantages And Disadvantages Of Recruitment Agencies Business Essay

In today's aggressive job market, there are some distinct advantages to using recruitment agencies. Both job seekers and hiring companies can benefit from the services offered by a specialized recruiter. The advantages to each party, are somewhat different since they come to a recruiter for altered reasons and with different perspectives.


The hiring company does not have to waste time screening huge volumes of resumes from candidates who may or may not be eligible for a job opening. The hiring company also can start interviews at the earliest for the reason that a professional recruiter is most likely to have several qualified candidates already in mind.

Another benefit that many hiring companies realize is that a professional recruiter can take care of as much or as little of the hiring process as they want. Some companies use a recruiter exclusively to get hold of resumes of qualified candidates so that they can conduct screening, interviews, etc. Other companies choose to be more hands off, allowing the recruiter to hit upon suitable candidates, conduct preliminary interviews, and even do necessary background and evaluation tests before sending the candidate to see the hiring manager.

Recruitment agencies can save organizations a lot of time in many respects. This is because it costs the hiring company a lot of money and resources to go through the entire process of employing new human capital. Using a recruitment agency can help firms avoid many of the costs and bottlenecks involved in recruiting. This also allows the firms to focus their time and resources on other aspects of their business.


One of the biggest drawbacks for the hiring company is the cost of using a professional recruiter. The usual fee for a successful placement runs anywhere from 20% to 30% or more of the new hire's first year salary and if the recruiter is hired on a retained basis, the fee is generally paid anyway of whether anybody is actually hired or not.

For many companies the time it takes to evaluate and select a suitable recruitment firm is a disadvantage. If only a couple of positions needs to be filled and eligible candidates are easy to find, it is often more cost efficient to do the hiring process internally instead of going to an outside recruiter. The cost to benefit factor will vary from company to company and so it is important to consider all options before the company gets committed to a professional recruiter.

Advantages and disadvantages of informal methods in the recruitment and selection of new employees in foreign subsidiaries

Rees and Schultz (1970) found that referrals is the most commonly used informal recruitment channel and is the preferred method of recruitment for some firms. More recently, Holzer (1987) found that referrals from employees and other employers produce new hires with higher performance and lower turnover. Holzer (1988), and Blau and Robins (1990) present evidence suggesting that referrals from friends and family members are more effective at producing job offers and acceptances than are other search methods. According to conventional wisdom of social movement theory, dense informal networks are the cradle of movements.


Referrals provide employers with more accurate information than other hiring channels

Integrates non-traditional networking channels to produce a diverse applicant pool

Cheaper and quicker to recruit

Advertisements not required


Selection process may not be successful enough to reveal the best candidate

People may not have a wider range of experience

Limits the number of potential applicants

May result in personal and family problems

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