PAYG, or ‘Pay As You Go’ as it’s known in full, is a concept which stretches across a multitude of industries and refers to the act of paying for a service or product as it is used rather than in advance or via a long term contract. In the recruitment world, a PAYG service works best when built on a strong foundation of communication and collaboration – combining the strategies of the recruiting company, with the direct needs of the client. By communicating your client needs expressly and directly, a PAYG model can help you to ensure you only receive – and pay for – the services you need, rather than investing in a large contract which you don’t utilise to its full extent.
With that said, how does it work for both sides?
The PAYG model explained
In order to understand and fully reap the benefits of a PAYG model, it first pays to understand how it works for both sides – the client, and the recruiting company.
As a client, whenever you immerse yourself in the recruiting process it is because you are looking for new team members who will help bring your company vision and operations to life. You want dedicated individuals who possess the skills needed to do the job, and who will blend into your company culture seamlessly. But finding the right individual every time is no mean feat – and so enters the external recruiting company or agency.
A recruiting agencies job is to find those individuals you are looking for. As a company, we put job adverts in all the right places, screen the applications, and find those who are best suited to what the client is looking for. We do all the background checks and initial interviews, so that we can be sure that the shortlist put through to the client is made up of only the most viable and potentially successful candidates.
But what happens when you don’t need the full breadth of services? And what happens when you only need to make a hiring decision every once in a while, and don’t regularly require the services of a recruiting agency? This is where the PAYG model comes into play – giving recruiting companies and clients alike a contractual agreement to fall back on, whereby services are agreed upon and paid for on a case-by-case basis.
The benefits for you – the client
In terms of the advantages and benefits, we tend to find that this model works best for smaller and medium businesses who are not regularly seeking new staff; allowing them to create and finetune their recruiting operations for each new recruit, rather than falling back on the same cookie cutter process again and again.
As a business, you will already know what your main goals and visions are; with most reporting their primary focus to be on building a great and committed team and keeping costs and expenses as low as possible – while ensuring income and profit is consistently high.
Now, consider for a moment what the biggest drains on your expenses are. Aside from paying salaries, one of the biggest costs facing small and medium businesses is contractor fees, particularly those which come under annual contractual agreements with consistent payments made to keep the working relationship sweet. One of the biggest subsequent frustrations that comes from companies is paying for services that they don’t use – and that’s where the main benefit of the recruitment agency PAYG model comes in.
Under this model and agreement, you only pay for the services you use. Whether you are looking for an agency to advertise a job every few months or need an agency to manage the entire recruitment process multiple times a month for your regular new hires, a PAYG model removes the need to source a single agreement which covers all of those needs and instead allows you to bring an agency on board as and when you need them.
Think of it as an on-demand service, which gives your company the external expertise you need – whenever and however you need it.
The benefits for the recruiting agency
You may be wondering at this stage why this PAYG model is so popular with recruiting agencies. After all, surely they would be better placed with a long term contract which guarantees them an income regardless of how much work they have to do in each given month or business quarter? But that’s just it – the lack of consistency in recruiting needs is one of the biggest challenges for agencies and can quickly turn agent-client relationships sour if an agency continues to bill an organisation for recruiting services when the client hasn’t used the services to the full extent.
For a recruiting agency, while the PAYG model removes the consistency of income from a single client, what it does do is free the agency up to advertise themselves as available to help companies as and when they need them. It prevents the agency from becoming tied to a few single companies with very little work to do, and instead broadens the agency’s work horizons – giving them the chance and opportunity to work with more companies, and take on new clients, every month.
Transforming your company from the outside, in.
Finding the right people to bring into your company is not a process you want to gamble on. After all, the right people really can make or break your company, and it’s this which most recruitment agencies will target and play on when it comes to creating contracts with clients and companies.
Using a PAYG model contract, not only will you only be billed for the services you actually need and use, but you can also tailor the support you receive at each touchpoint of the recruitment process – helping you to ensure that you always attract, interview, and hire the perfect individuals to help your company thrive and grow.