Recruitment

Blog

min

January 24, 2024

Here's why success fee based pricing won’t benefit you in recruitment partnerships

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When in need to hire fast, many SaaS founders often turn to a recruiting partner for help. It is typical that a one-time recruitment project with a recruitment partner will be billed based on a success fee. 

Success fee based recruitment partnership means that you pay your recruitment partner when you get results – in other words, when a fitting person for your role is hired, your partner gets paid. It sounds fair enough, but there are problems you should be aware of.

3 things you should know about success fee based recruitment partnerships:

#1 Success fee encourages “quick wins”

The trickiest thing about recruitment is to figure out whether the candidate is truly a good fit for the role and your team. The smaller your headcount is at the moment, the more significant parts of your company story you are hiring! These choices will determine your growth journey in a big part.

“Success fee based pricing encourages to push the process to the end as quickly as possible, and when you are in a hurry too, the risk of errors will increase.”

The truth is, a success fee based contract with your recruitment partner can encourage “quick wins” and unnecessary haste. It is fairly easy to pile up a list of almost-suitable talents that do not fully meet the real hiring need. Success fee based pricing encourages to push the process to the end as quickly as possible, and when you are in a hurry too, the risk of errors will increase. This leads to…

#2 Even more time wasted

Error recruitments are expensive, and they also eat into your time budget. When you are in need of finding the right person for a key role as fast as possible, every week lost is precious time wasted from reaching your growth targets.

“Every week lost is precious time wasted from reaching your growth targets.”

When done with care and effort, your recruitment process will more likely result in finding the right person for your key role. Success fee based recruitment contract is not necessarily sufficient for all the actions that finding the right expert needs! A fact about success fee based recruitments is that…

#3 Effective recruitment marketing that benefits your brand is usually not included

Let’s be realistic: the top expert you are looking for is employed somewhere else at the moment. She/he has a good salary, nice job and good working conditions. Why should they change jobs right now? 

They have absolutely no reason – unless you have something more interesting to tell them! But if you are a startup, even a B2B SaaS startup, chances are these people haven't heard of your company before.

“Success fee based recruitment contracts do not include marketing that builds your brand.”

To get their attention, you must have something distinctive to say. An open role itself doesn’t get their attention – you need to come in from another angle and with a good value proposition. Communicating the why with effective recruitment marketing helps significantly.

Often, when you do an effective content marketing based recruitment campaign that wins the attention, it also benefits your company and your brand in the future. But one thing is almost certain: success fee based recruitment contracts do not include marketing that builds your brand. 

Wanna take advantage of the opportunity and invest in an effective recruitment partnership that also builds your brand? → Read more about our recruitment partnerships!

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