Super-cheap financial services recruiter plans to undercut everyone

Financial services recruitment firms hoping for a lucrative 2011 have reason to hate Renovofinancial. In order to attract more business this year, the company intends to charge a fee of just 10% per hire. The norm is 25-30%.

"We are embarking on a new venture which we hope will shake up the financial services recruitment market a little," says Renovofinancial director Chris Parker. "Many institutions are now caught between the need to hire to restart growth but still have a keen eye on the cost of doing so."

To achieve such a dramatic reduction in fees, Renovo's relying on two things: an office in York and telephone interviews. All roles will be filled on a contingency basis, and there will be no exclusivity requirement.

Parker says most of his York-based consultants are ex-City recruiters, "with knowledge and experience of the financial markets."

He also says face to face interviews aren't imperative as long as telephone interviews are detailed and methodical. "A good, strong, structured telephone interview allows you to get under the skin of a person," he says. "If the interviewer understands the market and the area they're hiring for, it's comparatively easy to achieve an understanding of whether the person is right for the business."

Predictably, other recruiters cast aspersions on the model's likely success. "If you're looking for a very commoditised skillset at the lower end of banking, it might work," says one. "But we find that clients are quite happy to pay higher fees for a specialist and informed service."

The head of recruitment at one bank seems to confirm this verdict. "A 10% fee will get you client interviews," he says. "But this kind of distance recruiting approach will only work for areas like finance, ops, and IT. On the whole, we like a more personal touch."