For many businesses, hiring firms are a cost-effective solution to recurring problems with internal hiring. For instance, internal hiring is expensive, labor-intensive, and there's no guarantee that your new employee will succeed.

Recruiting agencies can help minimize your employee's workload and expedite the hiring process. Read on to learn how recruiting agencies work and why choosing one may be the best decision you can make for your company.

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Why Companies Choose to Partner With Recruiting Agencies

Currently, the average time it takes a company to fill a position is roughly 36 days, and it’s unclear why employers take over a month to hire new staff. We also know employee turnover is on the rise as well.

A study by the research firm LeadershipIQ found that 46% of new employees either quit or are terminated within the first year and a half of employment.

Here are six reasons why it takes an average of five weeks to fill vacant positions and why are companies struggle with new hire retention.

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Hiring in-house is challenging.

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Hiring in-house is time-consuming. You have to draft a job posting, sift through resumes, check references, interview applicants—sometimes 2-3 different times per person—then once you've found a qualified candidate, you can finally proceed with onboarding.

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It's difficult to spot the candidate "x-factor" on paper.

Finding a competent candidate can be a challenge when the job requires a very specialized skill set. These candidates may have a remarkable resume, but their assets might not align with the position or the company culture. Traits like ambition, teachability, integrity, and dedication aren’t discernible from an application or interview.

Accounting for employee turnover.

Worker retention is often an issue, especially for start-up companies and small businesses that may experience growing pains. Roughly three and a half million people quit their jobs every month. This is an uphill battle that many industries and companies are facing, especially during the current hiring landscape we are in.

Economic cycles impact hiring needs.

Economic cycles play a huge role in a company's staffing needs. Naturally, when production is high, the size of your workforce will need to reflect the demand. In a recession, rates of layoffs and furloughs rise. When the economy takes an upswing, we typically see a sharp increase in the employment rate due to the uptick in supply and demand.

Hiring is competitive.

Entrepreneurs and small businesses have to compete with larger-scale operations that are often more appealing to top talent. Acquiring an employee from a direct-hire firm comes with its own set of unique challenges. These candidates are in high demand, which means you may have to incentivize with a higher salary offer to compete with larger corporations. In the US, recruiting agencies fill an average of 16 million positions every year; the majority of these are jobs with large companies.

Bad hires happen.

Choosing the wrong employee can be detrimental for a company. Studies show that bad hires lower productivity, increase workplace tension, and may even harm the company’s reputation.

According to the Society for Human Resource Management, hiring the wrong employee can cost a company upwards of $240,000, plus countless wasted hours screening, hiring, and training that employee and their replacement. It takes companies an average of 17 weeks to recover from a bad hire, between decreased production and finding a replacement.

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