I worked in the agency space for 5 years before moving to corporate (First in Manufacturing, Construction and ICI, before Tech. As a recruiting agency employee, we were paid a low base salary, with the incentive of commission, between myself (recruiter) and the Account Manager.
Here's how it works:
The agency Account Manager prospects as many clients as possible and hooks them in with 20% -25% fees on contingency agreement with numerous clients. They'll take any client. Even if the client has the worst culture.
Recruiters that work with the Account Manager, will specifically ask them how much they closed the client's fee for a percentage of commission, and if they closed the client exclusively.
ie; Account Manager hypothetically closed 10 clients, on 10% contingency fees, and let us know, that you (the client) are also engaging with other firms.
Recruiter thinks: I'm not going to have much of a chance to close deals on a 10% contingency when I know it's out to other firms. How does that guarantee money in my pocket?
The recruiter will begrudgingly work on your role maybe for 30 mins to an hour, before working on the next best role that the account manager picks up with a high commission incentive. I've seen commission incentives go as high as 35%. This isn't enough time to do a great enough search to really find the quality talent you seek because the client has already proven they don't really value the service with their low commission fee agreement, and that they're not willing to work with the recruiter as a true talent partner.
So now you, the client, are left holding the bag because you don't have external recruiters really making their best effort to work on your role. Since recruiters technically don't HAVE to work on your roles because you didn't pay up front, they will hop around on other clients roles within their agency as they please with no setback to their career if those clients agreed to pay higher fees. It's not the recruiter's reputation on the line, it's the Account Manager's. It's up to the Account Manager to incentivize the recruiter to work on their role. However, when there's no incentive and lots of competition, they don't generate buy-in from the recruiter. Ie; a 10% contingency fee doesn't get good recruiters out of bed to want to do work for you.
You as the client, are offering a bare minimum incentive to these agencies. These agencies are going to give you bare minimum results. Which means, sometimes they won't even deliver candidates to you. They may even just give up on you.
The best recruiters I know are all working with some sort of commencement fee or retainer up front. The reason being is that they want to ensure that the client actually has a commitment to working with them, and won't send them on a goose chase where the recruiter will just spin their wheels, when the client doesn't share the risk with the recruiter, and expects to see numerous candidates (past 3) for their role. After 6 candidates are seen by the client, it's in the best interest of the recruiter to fire the client at this point because it's clear that the client may be window shopping or there may be too much scope creep on the role that was assigned to the recruiter.
Now, as a client you may not get an email indicating that you've been fired, but once you stop seeing candidates for a position with no explanation, a series of events has happened which caused the agency to stop working for you on contingency. (Does this seem like something you've encountered in the past?)
It's important, especially on mission critical roles that are extremely urgent, that a robust recruitment process is in place in this competitive market. If you don't know the market for the type of talent you are looking for, and it's a very challenging search, retained or a commencement fee is the best solution because it's ensuring that you're here to truly work with your recruiter, and your recruiter is more incentivized to fill this role for you because you made a financial commitment. Recruiters don't guarantee they'll fill the role on contingency search, but they sure will guarantee it on a commencement fee or retainer.
I also challenge you to take a look at your time to hire for the role. If it's more than 30 -60 days, external agencies are going to challenge you on why you haven't hired for the role yet, and if you're going to be worth their time as a client.
If you're in this situation right now, and you are feeling the burn of being stretched to thin because you don't have candidates, we should talk.