Third Party Recruiters & Their Steep Cost to Hospitals

Third Party Recruiters are hardly a temptation but commonplace now, which changes things

Third Party Recruiters & Their Steep Cost to Hospitals – Hospital executives using third party recruiters is at a steep cost and using them is so commonplace they have become the “new form of classified advertising” – hospitals must now compete for the same candidates who are being presented to multiple competitors by these recruiters. Instead of the growing reliance on them, which is revealing corrosive effects, hospitals can empower themselves in a new way by making perfect what they can control, which is their own presentation and recruiting effort with Online Job Tour®.

When it is decided there is a need for a new physician, particularly with non-urban, community hospital executives, 90% of the time the first call is to outside recruiters.

Recruiting is too important and  hospital administrators are under pressure to fill their openings “by any means necessary.”  Losing a single specialist doctor can seriously impact their service areas.  Today, they unabashedly maintain open relationships on LinkedIn with third party recruiters and the willingness to ultimately pay a $25,000 “recruiter fee” is accepted as part of the recruiting process and budget.

Hospitals are Paying a Steep Price for continually using Third Party Recruiters:

In one larger hospital corporation last year, of the 230 physicians recruited, I was told that 75% of them were via third party recruiters (I think that number was far greater given what the local affiliate hospital CEOs told me). At $25,000 per placement for these recruiters, this company paid $4,312,500 just in recruiter fees! And this is only the tip of the iceberg of the losses.

Because the recruiter is working on no promise of payment (referred to as “contingency”) his objective is to place that physician ANYWHERE. As a result, the jobseeker is promoted to many employers which drives up the time-to-fill timeline (and the losses to a hospital for an unfilled physician job placed at $100,000 per month, based on two credible industry sources). Onsite interview visits are also expensive and can exceed $3,000 for a candidate and spouse, and multiple trips are needed – often these are leveraged by the recruiters to try to sell the job – jobseekers are encouraged by them to go on these trips – particularly since it is no cost to the recruiter.

Retention Problems: In the same company, 50% of doctors leave by 36 months – an astonishing figure. This begs the question “why?” The first clear answer is the physician was aware of multiple options presented by the recruiter, so the commitment to the first choice was not as strong. Another answer is that “the third party recruiter was a band aid who didn’t heal the wound.”

It’s the pink elephant in the room that hospitals won’t acknowledge: they ignore the overall “losses” and look only at the line item costs of recruiting, which can still exceed $50,000 to fill one job in direct “line item” budget expenses after the final tally, which is bad enough; but considering the additional months needed to fill jobs, hiring lesser-caliber doctors and practitioners, and the retention problems causing the need to re-fill the physician job and start the entire process over again, the most business-oriented hospital administrators know the true bottom line: hospitals spend/lose more than $200,000 to fill one physician job opening, and considerably more for specialists.

The Awkward Relationship & How Third Party Recruiters Have Beaten Hospitals on the Internet:

We all saw it develop before our eyes.  Jobseekers, once found in many venues, were migrating to one place: the Internet. We know that a vast majority of  physicians presented by third party recruiters merely went online to look for openings and the recruiters were what they found and convinced the physicians to give them a resume and voila, the third party recruiter says to the hospital, “look who I recruited for you!”  The recruiting industry reacted to the changing dynamic of jobseekers and figured out how to position themselves online to jobseekers while the hospitals sat there watching things change.

  • Ultimately, there is a $25,000 in-the-balance awkwardness with the hospital thinking they are getting a steady flow of physician resumes at no immediate cost but with that worry of the candidates being shown other employers by the same recruiter, while the third party recruiter is worried about being on a need-to-know basis. All the while, the candidate has a $25,000 price tag attached to his candidacy – whether he understands that or not.

So 0ver the last decade there has been a clear trend in the growth of third party recruiters who are all over the Internet and are in the position of harvesting jobseekers by being on search results for phrases used, such as “physician jobs in Florida” or “Nurse Jobs in Cincinnati” – effectively beating their own hospital clients to getting the jobseekers first – or “intercepting” them. And then, the third party recruiters convince the jobseekers, much like the lawyers on TV who advertise “no fee to you unless we win” that their services are “free,” they convince the physician they can offer them numerous job options, and now you have candidates who have been “recruited.”

Third party recruiters want their hospital clients to fail – this is what promotes the need to use them. And hospitals paying into that industry ultimately make the situation worse as it pays into the system, or “feeds the beast” regarding how third party recruiters and their companies “harvest” candidates. This is ultimately why I left the business – it bothered me that third party recruiters didn’t work with their clients in order to make them better so they wouldn’t need to rely on their services; I wanted to be an advocate for hospitals and create tools to overcome their shortcomings and empower them.

So Why Do Hospitals Use Third Party Physician Recruiters Almost All the Time?

The obvious economic answer is there is a market for their services. In more sobering terms, hospitals cannot fill their physician jobs. Clearly, hospital executives have not trusted the resources provided to them by their companies for more than a decade as their use of third party recruiters has grown.

The shortcomings of recruiting by hospitals have not changed in the last decade since I got into the business from my sales consulting background. Individual hospitals are simply not going to pay the salary of $100,000+ to land an already-successful, professionally-trained, seasoned sales professional from the competitive arenas of tech/pharm/medical device sales to run their local recruiting efforts. Many (on site) hospital “recruiters” are hardly that; they do little more than help to sift through resumes and then set up interview visit trips for unprepared jobseekers.

Corporate and Regional Recruiting directors are also not from competitive, professional selling (nor do they have a background in technology which would otherwise help them identify tools and systems to compete online for talent). They are generally former private recruiters or hospital employees, such as RNs, who in turn have developed large networks of recruiters instead of  focusing on the challenges of creating strategies to out-recruit their competitors.

And regarding the web content of hospitals, the in hospitals corporations who oversee that are in Marketing – they have no recruiting experience and no understanding of the needs of jobseekers.

As all jobseekers are online now, this “disconnect” between Marketing and the hospitals company recruiting is a huge stumbling block, and another reason why hospitals are “behind.”

  • As a result, local hospital recruiting has no professional set up or protocol designed to measure real progress, results, and percentages and accountability like in major corporations with sophisticated product sales channels.
  • Physician and other advanced practitioner jobs, eventually get placed – but often due to simultaneously lowering qualifications and raising compensation, at a huge costs.
  • Most in the hospital industry who oversee recruiting have an aversion to sales – as much as they have a sense of passion and commitment toward their employer, they are not warriors and proactive sales pros who “live their jobs,” but are “pleasantly passive” 9-5’ers and administrative in nature – more akin to an HR executive.

Summary and a Solution:

Today, the outstanding $25,000 placement fee is the hospital’s advertisement– but as I reviewed, the costs of this practice are much more to a hospital and its service area than this fee. And for hospital leaders with their own administrative and professional goals, they need a competitive recruiting tool they can rely on.  How can hospitals attract jobseekers to their hospitals and service areas, maximize recruiting efficiency and save money? Can they do a better job of educating, informing, and selling jobseekers and their families in order to promote a more solid, long, term placement?

Online Job Tour® is a better approach to attracting and informing today’s online jobseekers and helps hospitals maximize the things they can control: their presentation, the time they spend, putting their best foot forward, ensuring candidates are fully informed and prepared for their relocations, by offering a “mistake free” virtual visit experience that covers more people and places and topics than the real trip. And by being a proactive sales presentation, it offsets the limitations of local onsite recruiters who are likely not professionally experienced or trained.  In the many cases where candidates are considering multiple options through a third party recruiter, hospitals with Online Job Tour have the ability to bring their onsite interview visit to them in order to create compelling immediate and long term advantages.

  • Therefore, before they even decide to become candidates, Online Job Tour fully informs jobseekers and their extended families. Candidates arrive pre-qualified and “pre-sold.” Both spouses come to the interview authenticate why they are interested and then after they leave use Online Job Tour as a touchstone while the hospital’s competitors  hope the candidates remember important details.
  • This is instead of advertising their careers “site-unseen” which results in lost time, lost candidates, and significant cost as hospitals try to cajole possible candidates to visit them and awkwardly use the expensive interview trip – which is filled with logistical and cost limitations, to make the sale.

After a 7 year test market in hospitals in 13 states, Online Job Tour received its patent in 2011 and was acknowledged by the US Patent and Trademark Office as the first website-based recruitment system that provides a holistic presentation of careers offered by an employer.

  • Our surveys revealed hospitals were able to fill their jobs 20% faster, attract and hire the higher caliber candidates, they reduced their number of onsite interviews by 33% per year and lowered their need for third party recruiters by one in seven. Their closing percentage of visiting jobseekers was doubled – which speaks for their improved competitiveness. Hospital savings averaged over $47,000 per physician job filled.
  • Retention, which is a major problem and possibly caused in part by use of third party recruiters, is dramatically improved by Online Job Tour. In fact, at a flagship regional hospital after 36 months their Director of Physician Relations left his position to start a new hospital consulting division at a Michigan-based company with a 100% retention record (vs. the company average of 50%).
  • Physicians interviewed preferred Online Job Tour by 89-100% in every survey question.

Today’s jobseekers are online and physicians naturally gravitate to Online Job Tour’s “better approach:”

There is no longer the hesitation about online content as their once was – particularly the younger jobseekers – such as graduating residents and fellows who grew up online, view what they see as reality, which Online Job Tour harnesses.  The appeal to physicians is demonstrable in our work and we have seized upon it by having Chiefs of Staff introduce their Online Job Tours, and we “build on the hospitals’ successes” by featuring physicians successfully persuaded by it.

The climate for the use of third party recruiters seems to be that they are now commonplace, regardless of the reason or who is to blame.  Candidates brought forth from this climate come with issues based on the contingency relationship which is unfavorable to the hospital.  Mitigating them is a big key for hospitals who want to land the best possible talent and “seal the deal” with strongly committed and confident new employees.  Online Job Tour gets referred by jobseekers to others and  makes job postings stand apart – which lessen the need to fill every job with $25,000 recruiters in tow.   Online Job Tour lands the better candidates.

Online Job Tour also limits the mistakes and continual oversights by local recruiters, and promotes a bona fide, repeatable protocol instead if every search being a “new ordeal” with unpredicatable, delay-inducing problems.

For these reasons, Online Job Tour should be a tool all hospital leaders insist on.

Carl Brickman is a pioneer in harnessing technology to help employers recruit today’s web savvy jobseekers in this entirely new employment landscape promoted by the Internet in the last decade. The rules are totally different now. Jobseekers have new expectations. Technology allows for new ideas and better approaches. Carl has personally dealt with hundreds of hospitals and has viewed the web content of 5,000 healthcare organizations. From the psychology of selling to strategic recruiting to establishing models for hospitals to maximize their recruiting, there is no professional who knows more in this important area for your hospital’s success.

After stints as a sales consultant in ultra competitive industries training six figure sales professionals after his successful technology sales career, and with more than a decade of dealing directly with hospital executives and supporting their recruiting efforts to attract today’s web savvy jobseekers at Promo Web® Innovations, Carl has a very unique understanding of harnessing technology to maximize recruiting results, which is represented in US patented Online Job Tour®, which he invented and has been refined through a restricted seven year test market with hospitals. Carl writes and speaks in plain terms for busy decision makers who want answers and who value recruiting excellence. Online Job Tour® has been Carl’s true passion to empower employers like no product since the Internet, saving millions while making recruiting more productive and less stressful, and improving upon efficiency and quality benchmarks. To learn more about Carl or his company, visit www.onlinejobtour.com. You can also find “Carl Brickman” on Facebook and LinkedIn.

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