Are recruiters worth it? BANK ON DAVE replies

I run my own small production company. You can imagine it’s been a very tough few years, with the pandemic, energy costs and rising interest rates on my own mortgage.

The biggest problem I am facing right now is recruitment. I’m at my wits end trying to find people. We pay good wages from the start, and although I employ a few apprentices, I really need some more experienced staff.

I’ve been looking to local recruiters to try and fill this gap, but they charge a ridiculous commission which I’m not sure I can afford at this point. I need the staff to try and grow the business, but I can’t really afford to pay a big commission either.

Should I suck it up and go to a recruiter or should I try to muddle through with minimal staff?

Dave Fishwick, This Is Money’s company doctor, replies: There’s been a slew of challenges for businesses over the past few years, and I think that’s especially true in manufacturing.

Even now, in these harsh economic conditions and with all the news about artificial intelligence and automation making workers redundant, I believe investing in people is the best investment a company can make.

Employees are still a company’s most critical asset. I think it’s fantastic that you hire and train students.

I am a big fan of apprenticeships and think that much more help should be given to help employers provide apprenticeships on a national scale.

Here in Lancashire, a major engineering technology employer is investing heavily in apprenticeships, so they must find it worthwhile to attract young people before they go to university.

I’m very fond of in-house training – choosing a successor within many years before they are needed, then slowly but surely training them to be ready for that future position.

I have an employee of my minibus company named Matt. He has been with me for over eight years and was trained by Mark, who was a general manager and would retire at the age of 66.

Mark retired last year after working for me for over 20 years and doing a fantastic job, and Matt now has excellent in-house training.

Matt now runs the business and does a great job. If you can recruit from the inside and spend some quality time yourself training them for the job, you will find huge benefits in the future.

If you need someone immediately, recruitment agencies are an instant solution, but come at a huge cost.

How to snatch staff like a recruiter

If you had one silver bullet, which of your competitors would you fire it at and why?

Borrow some of their best ideas and then approach some of their employees through social media. That’s what the recruitment agencies will do, and you can take them out of the scenario and do it yourself, saving huge costs.

There are many options you can try before paying the recruiter’s fee, such as self-searching and posting on Linkedin, or using online job boards.

A word of caution about using recruitment agencies from personal experience.

You may find after just a few years that specific recruiters come back and bring back your staff members and transfer them to the next company or a competitor that pays more fees.

The employment agencies tend to maintain close contact with many of the employees they have found jobs for.

You can also try contacting relevant trade associations and place ads in industry publications, posting to local bulletin boards and job boards such as the Resume Library.

If you don’t have time to personally review resumes and applications, create a list of “must have” criteria and delegate the task of shortlisting applicants.

Try reaching out to your current employees to see if they know someone with the right experience they could recommend. It may be worth providing an incentive for a successful referral.

I’ve done this at Burnley Savings and Loans – the ‘Bank of Dave’ from the recent Netflix movie – which was very successful.

The other option you are considering is to continue with your current staffing.

If the business model is right and the prevailing economic conditions allow, the right employee will more than pay for itself – but deciding when the time is right to hire may be a factor that depends on current and future economic conditions. Perhaps offering the existing team some extra money for overtime might help.

Alternatively, you can hire some temporary workers or outsource some of the work and then concentrate your own staff on the tasks that cannot be outsourced.

Think carefully about the coming year and decide if your order book can handle the extra overhead costs of new hires. Once you hire new staff, it will affect your overheads and cash flow for years to come.

It is almost impossible to predict every aspect of the future economy. Still, we can look to the prevailing conditions to help us understand where things could go in the short to medium term.

Consider whether the same pressures your business faces also affect your customers, reducing future orders. If you think this is going to happen, hold off on hiring for now and consolidate to weather the adverse conditions.

If you are more confident in your outlook, definitely find the best people for you and go for growth!

Finally, please keep in mind one thing that has served me very well over the last 30 years when I employed some great people. Take care of your employees, respect them and treat them as you would like to be treated if the shoe was on the other side, and no one will ever leave!

Good luck!