The Cost of a US Employee - Recruitment

Hiring an employee in the US has, like hiring in any other country, associated costs. These can be broken down into the following buckets:

Recruitment
Salary
Federal costs
Optional Benefits
Infrastructure 

Recruitment costs:
There are several approaches to recruiting new employees in the US. Using the services of a recruitment company (sometimes referred to as a Headhunter) can save time for the hiring organization because they manage the posting of recruitment ads, the initial screening of applications and potentially even the screening of candidates via phone or in person.

Recruitment companies fall into one of two broad categories:
Retained Recruiters:
Partnering with a recruiter on a retained basis means the recruiter will charge an upfront fee to conduct a search. They will operate on an exclusive basis, meaning the job will only be filled through this recruitment company. These recruiters work very closely with the hiring organization and will take their time and using an agreed methodology to find the best person for the job. The process will usually result in the production of a shortlist of anything from three to ten names being presented to the hiring organization before interviews commence. Ideally the retained recruiter will be able to present five candidates with the perfect skills, location, salary etc allowing the hiring company to focus on selecting the best candidate.

Contingency Recruiters:
Contingency recruitment is sometimes described as No Win, No Fee. This is a service performed by a recruitment company for free until the day a candidate represented by them takes a position with the hiring organization. Recruiters working on this basis often have to compete with the client’s internal HR department, advertising, direct applicants and typically one or more other recruitment companies.
The contingency recruiters aim is to represent the best candidate or candidates and to do this faster than the other channels. If for instance the vacancy is hard to fill, there will only be a few candidates qualified for the position. Identifying and contacting these individuals before other recruiters is vital for the successful no win, no fee recruiter.

The primary difference between these two types of recruitment is the level of service. A retained recruiter has agreed to a particular service level and will continue with the service until the position is filled or the agreement is terminated.

A contingency recruiter will have multiple positions they are trying to fill and may well devote more attention and effort to positions that are easier to fill.

Alternatively a company might decide to handle the posting of recruitment ads and screening themselves. There are numerous recruitment websites available for hiring in the US, such as Monster, The Ladders, Indeed, and several others. The professional networking site LinkedIn is also a very popular place for businesses to post openings and is heavily favored by recruiters.

The disadvantage of this approach is that the hiring organization must filter, screen and correspond with the applicants. For some positions this could result in an organization having to dedicate many hours of work to deal with the piles of applications received. 

The advantage of this approach, however, is that all applications are seen by the business, and some applicants may be easily recruited for other positions. In addition, the cost may well be lower than hiring a recruitment company.