The Difference between Direct Sourcing and Third-Party Agencies:
The large number of physicians entering the employment market can be overwhelmed by how vast the industry has become. Nearly overnight, a whole physician recruitment industry has emerged, each appearing to be legitimate. The current landscape of both In-House Physician Recruiters and Third-Party Physician Recruiters consists of thousands of such recruiters, all soliciting the same physicians. Physicians BEWARE: There is a real difference between who you choose to CONTACT for a physician job-opening. Know the difference:
Direct Sourcing: In-House Physician Recruiters & End-Employers:
In-House physician recruiters (sometimes referred to as end-employers) are always employees (or partners) of the DIRECT EMPLOYER. Each of these individuals can successfully negotiate the physician’s employment contracts and make physician recruitment decisions on behalf of their employer or partners. However, an In-House Physician Recruiter is NOT an organization that claims to be representing the end employer. An effective way to find out who the physicians are speaking with would be to ask if they are a direct employee (or partner) of _________ (insert name of organization or group). If the answer is “yes”, the physician can be assured that he or she is speaking to the end employer.
Third-Party Physician Recruiters, Agencies & Headhunters: Due to the enormous earning potential, by means of recruitment fees, Agencies continue to multiply nearly unchecked. The range of recruitment fees that these entities can collect is currently in the $60,000 to $150,000 range per physician. With returns such as these it is perhaps easy to see why the physician recruitment market is flooded with unscrupulous agencies. Given the choice, In-House Physician Recruiters and END EMPLOYERS almost unanimously elect to source the physicians they ultimately hire, and this can result in many thousands of dollars saved. To further cloud the picture, there are three different types of Agencies. Keep in mind that all of these entities collect no fees from the physicians they aim to recruit – but ALL of them charge the End Employer a recruitment fee for sourcing any physician that the End Employer ultimately hires. These Agencies are explained further below:
Contingency Based:
Contingency-Based Agencies are commonly the least expensive, but they are probably the most widespread agencies physicians are likely to encounter. Contingency based firms only charge the end employer a flat rate (in the range of $15,000 to $30,000) for every physician who is sourced and is ultimately hired. There is no up-front fee associated with the end employer contracting with the firm. Due to no up-front fees, it is not at all uncommon for physicians to be approached by multiple contingent firms, all claiming to be representing the same employer.
Retained:
Retained physician recruitment firms are perhaps the least common but are typically the most expensive ones to deal with. The physician is charged nothing. Retained Firms contract only with the END EMPLOYER and charge them an excessive retainer fee along with other passed-on costs, which can easily exceed $100,000! Using this scenario, Retained Firms can easily extract $150,000 or more from the end employer FOR A SINGLE SEARCH! Compound this example by perhaps four such searches and one can easily see how lucrative the Retained model becomes. There is little incentive for the Retained Firm to actually get one of their physicians hired. Retained Firms are the least popular among end employers, and such firms normally represent the fewest clients. Physicians being represented by a Retained Firm need to know that, due to a very small pool of clients, the Retained Firm is likely to present fewer QUALITY opportunities.
Hybrid:
The Hybrid Physician Recruitment Firm is actually a misnomer. Firms that claim to be a hybrid still charge a retainer. They ask for an up-front fee to get the search started (they are likely to call it a COMMITMENT FEE), and still charge the end-employer a placement fee when any physician is ultimately hired. The “Hybrid” term became popular when the “Retained” term became synonymous with large fees and questionable practices. As with the Contingent based firms and the Retained Firms, Hybrid Firms do not charge the physician a fee to represent him or her; they collect their fees solely from the End Employer.
The Headhunter:
A true rarity now, the Headhunter normally charges the PHYSICIAN a large fee to find them a desirable employer. Fees can take many forms: hourly, upon successful employment, cost based, etc… From the end employer’s perspective, physicians represented by headhunters are generally considered to be undesirable due to the perceived difficulty of the physician candidate finding gainful employment on their own and their needing to contract with a Headhunter to find them a job. Physician candidates who are referred to an end employer via a Headhunter are highly scrutinized, and their backgrounds are thoroughly checked.