The Pros & Cons of Veterinary Recruitment Agencies
So many veterinary practices are short-staffed today, and it is increasingly challenging for clinics and hospitals to attract qualified veterinarians, veterinary technicians, and veterinary support staff to available job openings. To increase their options, some practices consider turning to a veterinary recruitment agency or “head hunter.”
The first questions to ask when considering appointing a recruitment agency are simple: How much does a recruiter charge? And what do they do to earn such remarkable fees? Finding transparent information on the fees associated with veterinary recruiting can be daunting. Veterinary recruitment firms seldom publish their prices publicly, so uncovering this information requires a bit of sleuthing. This lack of transparency creates uncertainty and chews up valuable time… time that you would probably rather spend seeing patients or getting a head start on your search for employees. We’re not a recruitment agency, we’re something different, very different. So, is hiring a recruitment agency the right choice for your practice? And, if so, how much does it cost? Find the answers here…
Disadvantages of Working With a Veterinary Recruitment Agency
The most significant drawback to working with a veterinary recruitment agency is the high cost associated with these services – an estimated 20 to 30% of your new hire’s salary. This means having fewer funds available to offer a competitive salary, hire additional staff to support your new team member, invest in laboratory equipment, or make other improvements in your practice.
Depending on your contractual agreement, there may be other disadvantages to working with a veterinary recruitment agency. For example, while some veterinary recruitment contracts only require you to pay the recruiter if they present you with a successful hire, many agencies also charge a retainer fee to be paid whether or not they successfully find you a new employee. You could end up paying a recruiter several thousand dollars, even if your search for a new employee is unsuccessful.
Many veterinary recruitment agencies require you to work with them exclusively in your hunt for a new veterinary team member, preventing you from working with other recruitment agencies. However, an exclusivity agreement may have other unanticipated impacts on your employee search. An exclusivity agreement could mean you must pay the recruiting agency’s fee if you find a new hire through your own personal networking and connections or if a new potential team member approaches your practice unsolicited. These exclusivity policies can have significant potential impacts on your hiring practices and can cost your practice money.
Before working with any veterinary recruitment agency, it is essential to have your contractual agreement reviewed by an attorney familiar with recruitment agencies. A qualified attorney can help you understand the implications of a recruitment agency’s contract, allowing you to make the best possible decisions about your hiring practices. If you’re considering using a recruitment agency, incorporate the cost of an attorney contract review into your budget.
While veterinary recruitment agencies can offer benefits for some practices, it’s essential to view them in a balanced manner. In addition to the cost of these agencies, other potential drawbacks must also be considered in determining whether a recruitment agency is the right choice for your employee search.
Why the Lack of Transparency in Recruitment Agency Fees?
A lack of pricing transparency makes it difficult to assess the value of using a recruitment agency and makes it difficult for you to make educated comparisons between multiple recruitment agencies.
Most veterinary recruitment agencies determine their fees based on a percentage of the new hire’s compensation. If they provide you with an applicant and you decide to hire that applicant, you will be expected to pay the recruitment agency a fee of 20% to 30% of the employee’s total first-year compensation. For example, suppose your new associate veterinarian’s total first-year compensation will be $140,000, and the agency charges 20% of your associate’s first-year compensation. In that case, you can expect to pay approximately $28,000 for recruiting services. An extraordinary number.
Recruitment agencies that charge a percentage-based fee differ in how they calculate employee compensation. Some recruitment agencies only include base salary and benefits in this calculation, while other agencies also factor production bonuses into determining employee compensation. Before entering into a percentage-based agreement, you need to know the percentage that a recruitment agency charges and how they will calculate your new hire’s compensation.
Other veterinary recruitment agencies use a fixed fee model for pricing. This model is less standard than a percentage-based model but has the advantage of being more predictable. Some agencies may offer multiple “levels” of recruitment service, each associated with a different fixed fee.
Regardless of a recruitment agency’s pricing model, the service price varies considerably based on the client. Percentages and flat fees are typically negotiable, and, in most cases, employers should attempt to negotiate a lower rate.2 Other aspects of the agency’s agreement, such as payment deadlines, are also often negotiable. Veterinary recruiters are typically paid on a commission basis, so their prices may increase or decrease based on their need for work. It’s common for every client represented by a recruitment agency to pay a slightly different fee or work with the agency under other terms. This variation minimizes transparency because it’s your negotiating skills that end up determining the price. There is no actual “set price” for most veterinary recruitment agencies; they attempt to charge the highest rate that the market will bear, and it’s up to you to see whether you can negotiate them down to a more reasonable level.
Advantages of Using a Veterinary Recruitment Agency
Recruitment agencies do have their place in the world of veterinary employment. A recruitment agency can offer several benefits to a veterinary hospital looking for new employees.
The most significant benefit of a veterinary recruiting agency is confidentiality. Suppose your practice wants to hire a new associate without alerting current employees or other members of your local veterinary community. In that case, a recruiting agency can be a way to avoid having your practice’s opening discovered in public job listings. Additionally, recruiting agencies can help a clinic or hospital to conduct a highly targeted search. If you are looking for a specialist, a recruiter may know specialists in your field who are open to new job opportunities.
Finally, a recruiter can be helpful if you have limited time to devote to hiring. Some practice owners prefer to outsource preliminary interviews and contract negotiations to a recruitment agency to free up time for other responsibilities. While this approach may offer time savings, it does mean giving up some control and flexibility in your hiring process.
Is a Veterinary Recruitment Agency Right for You?
After reviewing the pros and cons of working with a veterinary recruitment agency, you may know what might work best for your particular situation.
However, there’s one more factor to consider:
The average associate veterinarian turnover is 20%, which means you can expect your new hire to remain with your practice for an average of five years. Suppose you routinely use a veterinary recruitment agency in your new associate search. In that case, you can also expect to pay a recruitment fee of up to 30% of a veterinarian’s total compensation every five years. If your complete associate veterinarian compensation package is $150,000, you could spend up to $45,000 every five years for the services of a recruiter. Is that good value? Maybe, or maybe not.
Consider whether there are other ways you could spend that money to make your practice more attractive to a potential candidate. If you invest that money in your practice, is there a better way to use it? Would a $9,000 increase in base salary, a $45,000 signing/relocation bonus, a $45,000 equipment upgrade, or an additional part-time support staff member make your practice more competitive, helping you attract more qualified candidates? If so, consider whether retaining a recruitment agency is the best use of your practice finances or focusing instead on investing in your practice and marketing your practice to suitable candidates.
Determining the actual cost of hiring a recruitment agency can be challenging, given the need for more pricing transparency in the recruiting profession. However, suppose you decide to use a veterinary recruitment agency. In that case, you will likely spend anywhere from 15% to 30%, and typically 20%, of your new hire’s first-year compensation on the services of a recruiter. Some practices may consider the pros and cons of recruitment agencies and decide that this fee is a worthwhile investment. Most do not. It’s essential to evaluate your particular situation critically and determine whether you may gain better returns by investing that money in other aspects of your practice…or ready yourself to write a large check.
- Olah, KG. (October, 2021). What You Need To Know About Recruiting. Today’s Veterinary Practice. Retrieved from https://todaysveterinarybusiness.com/veterinary-team-recruiting/ (Accessed October 19, 2021.)
- Bacharach, CR, Kellner, RC. (December 14, 2017). Rethinking Recruitment Agency Agreements. Retrieved from https://www.gfrlaw.com/what-we-do/insights/rethinking-recruitment-agency-agreements (Accessed October 19, 2021.)
- Veterinary Business Advisors. (January 15, 2020). Compensation Best Practices in 2020. Retrieved from https://veterinarybusinessadvisors.com/compensation-best-practices-in-2020/ (Accessed October 19, 2021.)
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