Tech & Work

How one government IS manager saved $60,000 in recruiting fees

Do you want to use recruiters to find IT talent but worry about how to pay the fees? This installment of IT on a Shoestring profiles one IS manager who saved money by making cost-saving deals with recruiters.


Federal and nonprofit agencies can have a tough time recruiting skilled IT workers. Mike Martin, IS manager for the city of Dayton, OH, knows this firsthand.

“As a local government IT organization, we are somewhat limited in our ability to recruit skilled technical employees,” said Martin.

To attract quality workers and to keep recruiting costs low, Martin establishes relationships with IT recruiters that benefit the recruiters while saving the city of Dayton an average per employee of $20,000 a year. Martin has used this method three times, saving the city $60,000.

How he does it
One of Martin’s main concerns about using recruiters is paying finders’ fees. In his experience, Martin said that these fees usually range from 20 to 30 percent of the employee's initial annual salary.

“For one of our technical positions, this could be as much as $20,000,” he said.

Martin also said that the city of Dayton’s human resources department did not traditionally pay out finders’ fees.

So Martin made a deal with the recruiters: He would pay them a per-hour fee based on the monetary value of the position being filled and contract the potential employees as consultants for six months.

“The plan I worked with these [recruiters] is more of a contract-for-hire type function,” Martin said. “Basically, we are financing the fee over a six-month term, while getting work tasks completed. We agreed on a per-hour fee that was based on the value of the position, rather than the normal, higher per-hour contracting fee.”

Martin negotiated a lower per-hour fee to replace the higher contracting fee.


The contract price replaces the finder’s fee and is paid directly to the recruiter.

“The idea came from a discussion I had with a placement firm I have used quite a bit on short-term contracts. We talked about how to reach more candidates via the use of a recruiting office,” Martin said.
Martin’s plan has four benefits:
  • His department gains skilled employees.
  • His organization saves money.
  • Partnerships with consulting firms are formed.
  • New employees move to Dayton, increasing the city's tax base.

Everybody wins
Martin’s agreements with his recruiters stipulates that once a consultant is contracted, he or she will start the process of applying for the position as a government employee through the city’s civil service department.

Martin currently works with three national recruiters. “I am having the most success with TEK Systems, who has an office in Cincinnati,” he said. Martin and TEK Systems recently recruited a systems engineer for Martin’s shop. TEK Systems brought the employee to Martin, and Martin paid TEK Systems a six-month contract.

During this six-month period, the employee will apply for the position that he was assigned to, along with any additional candidates. Then, Martin will receive the employee’s resume from the civil service department and carry on a typical interview process.

The purpose of the contract is twofold: The recruiter ultimately receives their finder’s fee, and Martin can test-run future employees.

“During the six-month contract period, the consultant is learning our organization as well as producing work,” said Martin. “Everybody wins.”
Everyone likes to save money, particularly when the economy is in turmoil. Do you have an idea to share that other TechRepublic members can use to save money? E-mail us a brief description of how you’ve saved your organization money, including a figure or estimate showing how much the change saved over a traditional approach. If your idea is published, we’ll send you $50 and a TechRepublic T-shirt.

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