HIRABL - $MM Cost of Turnover Whitepaper

HOW MUCH DOES RECRUITER TURNOVER COST YOUR AGENCY?
Most agency owners aren’t aware that over a billion dollars in permanent placement fees changes
hands every week – and that $7BN in contract fees changes hands in that same time.
What’s even more surprising is that $420BN/year staffing industry that employs 625,000 recruiters
who generate fees by putting other people to work, actually experiences 25% - 110% recruiter turnover
itself, with 43% being the average. That’s over 5,000 recruiters who leave agencies every week! As
the renowned agency trainer Jeff Kaye states, “recruiters will join your firm because of people, and
recruiters will leave because of people.”
Most agency owners know roughly how much recruiter turnover costs their agency – estimates range
from half to the full amount of the annual gross revenue generated by that recruiter.
Let’s add up the direct costs:
• $10,000 - $15,000 in advertising, interviewing and onboarding costs for a new hire.
• $25,000 - $75,000 in lost revenue as recruiters rebuild relationships that generate fees.
• $10,000 - $50,000 in “backdoor hires” and/or “on-hire/conversion fees” due to
communication breakdowns.
That means losing a single recruiter costs an agency over a hundred
thousand dollars. If you run an agency with 25 recruiters experiencing
43% turnover (our industry average), you’re losing millions of dollars
every year – and that’s just the direct cost!
Ready to make the most of your data?
Call HIRABL at 415 799 1460 (US) or +44 0 2036 953093 (UK) or email info@HIRABL.com

How much does your agency lose when you factor in
lost relationships, lost institutional knowledge, and lowered
team morale? The answer is millions of dollars more.
That’s because recruiter turnover at staffing agencies is significantly more expensive than employee
turnover at conventional corporations, exactly because the hidden “human” costs are high in a
relationship-driven business like recruitment.
Recruitment is about people and relationships – lose a recruiter, and your agency loses a valuable
set of relationships that cost your business millions of dollars.
THE HIDDEN MILLION DOLLAR COST OF RECRUITER TURNOVER: RELATIONSHIPS
Like all businesses, recruitment agencies’ most valuable assets are their employees: the recruiters who
build relationships, represent your agency in the market, and earn you fees. Recruiters know that in a
relationship-driven business, personal knowledge of your candidates and clients is essential to long-
term success. Successful recruiters touch lots of people purposefully and personally every day.
Most recruiters submit somewhere between 250 and 1,000 resumes every year. That’s just submissions
– that means they are qualifying and touching 1,000 - 5,000 candidates every year!
If you currently fill a job with every tenth candidate you meet, and your average fee is $10,000,
then every time a recruiter leaves your agency, you lose $1M - $5M in potential placements.
“Million dollar producers” are invaluable – not just as direct fee earners, but also because they feed
your agency as a whole with high-quality talent, clients, and referrals.
That’s the value of a good personal network to your agency. Not just the $100,000+ direct cost
of rehiring and ramping a recruiter, but the $MM soft cost incurred due to lost relationships and
institutional knowledge.
This is why it hurts agencies so badly when recruiters leave,
and take their relationships with them, leaving you only a stale
database of soulless, dead connections.

“BIG DATA” = BIG OPPORTUNITY FOR RECRUITMENT
As Marc Benioff, CEO of Salesforce recently shared,
“The reality is a lot of our customers still don’t have
a comprehensive customer database, their core employees are not
connected in a robust way with their customers,” Benioff said.
“That remains the biggest opportunity.”1
Benioff’s words couldn’t be more true in recruitment. Most agencies don’t have a comprehensive
database of recruiter activity, and as a result, when recruiters turnover, they are not connected in a
way robust way to their candidates and clients.
Consequently, agencies often suffer from “backdoor hires” and missed “on-hire/conversion fees” that
are the direct result of not knowing what’s happening with their own candidates and clients – even
often when there’s a good recruiter in the middle of the relationship!
Logging data represents the single biggest opportunity for recruitment agencies everywhere –
which is why CRM / ATS systems like Bullhorn, Bond, TalentRover, PC Recruiter, Jobscience, and
others are so essential to building enterprise value for a recruitment agency. Even more importantly,
CRM / ATS systems allow agencies to store structured data, thus enabling “Big Data” applications
that can vastly improve agency efficiency and recruiter ROI.
For example, most agencies pay for their recruiters’ LinkedIn
license. When a recruiter leaves, the agency loses visibility into the
connections that recruiter built on their dime!
1 http://www.businessinsider.com/salesforce-ceo-marc-benioff-says-everybody-wants-predictive-software-2016-3

HOW CAN BIG DATA SOLVE THE PROBLEM?
“Big Data” services like HIRABL bridge the gap
between services like LinkedIn that are individually
owned and operated by 94% of recruiters, and
those like Bullhorn and Bond that are institutionally
owned and operated by the recruitment agency.
The benefit to “Big Data” services
like HIRABL is that they can keep
an agency’s data and institutional
knowledge alive and well at the
agency long after the individual
recruiter leaves.
These Big Data services can also do things like help your agency identify “leakage” in your business
that results from “backdoor hires” and “on-hire / conversion fees”, or accurately predict and identify
actionable sales leads that generate new job orders and top-line revenue for agencies. The value
of data goes beyond institutional knowledge to enable business intelligence services that can
dramatically improve the profitability of your agency.
“Ten years from now, when we look back at how this era of big data
evolved… we will be stunned at how uninformed we used to be when
we made decisions,” said Billy Bosworth, DataStax CEO.
Today, very good recruitment agency has a “data warehouse”
– the challenge for agency owners is to unlock the value hidden
in their data so they can start making faster, smarter, and more
profitable decisions.
AGENCY CRM
L O S T R E C R U I T E R S
I N S T I T U T I O N A L
D A T A
I N D I V I D U A L
D A T A
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L O S T R E L A T I O N S H I P S
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