Star-struck… the power of ratings for the recruitment industry

How ratings can help find good recruitment agencies, fast and promote continuous improvements in the industry

How can online ratings help you drive revenues?

We are now surrounded by websites that consolidate customer reviews – from TripAdvisor or Amazon to ‘aggregator websites’ such as Moneysupermarket or GoCompare that allow us to compare different online offers and prices in one place.

Ratings and rankings are incredibly powerful at influencing us as customers in what we think about different products, services and companies, and ultimately what we buy.

As mentioned in the research paper from Jake Soloff and Oussama Fadil, ‘often times, the online rating of a business is taken as a proxy for its objective quality rating.’

In this article, I’ll explore:

  • why websites offering online ratings or comparisons are so successful
  • why this matters for the recruitment industry
  • and last but not least, how online ratings can help you, if you are a hiring manager or a recruitment agency.

Why are websites offering ratings, reviews or comparisons so successful?

From a customer’s perspective, popular means good!

Ratings are simply helpful!

In a time, when, as The Economist describes it, ‘everybody, everywhere seems to be busy’, buying online offers us a way to save time.

And this is what the majority of us do – 79% of UK citizens to be precise – purchase goods and services online nowadays.

But buying online comes with its challenges – how do I know if this website is trustworthy? How do I know if this service is as good as described? How do I know if this shirt is nice, without touching it, seeing it, feeling it?

This is where online ratings come into play. We rely on others to tell us if we should go ahead with our purchases. It reduces our anxiety.

As summarised by Robert Cialdini, a professor of Psychology in Arizona, in his book Influence, ‘advertisers don’t have to persuade us that a product is good, they only need to say others think so. Popular is good.’

Online ratings help generate trust and can drive greater revenues in the recruitment industry

From a supplier’s perspective, good ratings help build reputation and drive revenues

And this is particularly important for independent or small suppliers.

I recently went on holidays to the Mont St Michel, in France. I wanted to find a nice restaurant to celebrate my mum’s birthday. What did I use? TripAdvisor. We ended up off-the-beaten tracks, in a lovely restaurant. Without TripAdvisor’s online ratings, we would never have found this little gem.

Sounds familiar?

Well, science has actually confirmed the importance of ratings for online businesses.

A working paper published by Michael Luca from Harvard Business School analysed the impact of Yelp reviews, one of the leading website crowd-sourcing the reviews of local businesses, on the reputation and revenues of restaurants registered on the platform.

The conclusions are very clear: ‘a one-star increase in Yelp rating leads to a 5-9% increase in revenue’, and this is particularly true for independent restaurants.

This is not negligible!

As synthesised by Michael Luca, ‘online consumer reviews are a substitute for more traditional forms of reputation.’

In turn, they help drive revenues.

Extrapolated to the recruitment industry, online ratings could drive 5-9% of extra revenues for independent recruitment agencies.

Why does it matter for the recruitment industry?

As we all know, recruitment agencies are often plagued by bad press.

If you Google the word ‘recruitment agency’, you typically find articles such as ‘how to spot a bad recruitment agency’, ‘annoying practices from recruitment agencies’ or ‘why do people hate recruitment agencies’, to name a few.

This does not really inspire trust, does it?

The industry suffers from a mutual lack of trust – between hiring managers and recruitment agencies.

This leads to a lot of wasted time and efforts.

As a hiring manager, how do you know if a recruitment agency is good or bad?

It’s actually really hard to know, especially if you need to find a recruitment agency fast, for example when you need a temporary agency worker urgently.

The only thing you can do is call the agency, or check Google reviews – but they’re based on the experience of candidates working with recruitment agencies, not reviews from hiring companies.

Did you know that 88% of consumers have avoided a company because of bad reviews on social media?

Hiring companies avoid recruitment companies with bad reviews on social media.

So, how to build trust in the recruitment industry?

There’s no equivalent of Tripadvisor in the recruitment industry.

There is no feedback loop. Therefore, there is no real drive for continuous improvements. And a vicious circle of frustration.

That’s why we decided to create TempaGoGo.

TempaGoGo offers a mutual rating system where hiring managers can find recruitment agencies and see their ratings before they decide to work with them. And recruitment agencies can also see clients’ ratings before they decide to submit candidates’ profiles.

How does it work?

To build our system, we had two options – either leave clients and recruitment agencies respectively review or ‘mark’ each other, or use fact-based data collected in our platform.

We opted for the latter for two main reasons:

  • because we feel that recruitment is an art, quite subjective and very human too, and some brilliant candidates in one company might struggle in another company if there’s no cultural fit
  • and because we think that it’s a fair and objective way to assess the relative performance of recruiting companies and recruitment agencies.

How can ratings help you when it comes to recruitment?

  • If you’re an HR professional or hiring manager: in a similar way that you use TripAdvisor to find the best restaurant, it helps you find quickly the best recruitment agencies in the sector and location you need, that can source candidates with the right skills and experiences.
    Instead of having to call several agencies, check Google candidates’ reviews, and dare I say, bet, through multiple discussions, which recruitment agencies might be the most reliable, this is done for you.
    It will help you recruit with greater confidence, at speed.
  • If you’re a recruitment agency, in a similar fashion to the Yelp effect on independent restaurants, using TempaGoGo allows you to become more visible and known, and in turn compete more effectively with bigger players.
    As demonstrated by the Harvard Business School working paper, the impact of good ratings on revenue was ‘driven by independent restaurants.’
  • For both recruitment agencies and hiring managers, the rating system is also a way to drive continuous improvements. You can see your own rating and use this information to identify areas of improvements and track your progress over time. A win-win situation!

To conclude…

Black-box thinking is an inspiring book. It can encourage companies (including recruitment agencies) to collect and act on feedback to look for continuous improvements.


To conclude with some food for thought, if there is one book I really recommend you to read on this topic, it’s ‘Black-Box Thinking’ from Matthew Syed, a former Commonwealth champion in table tennis and award-winning columnist in The Times.

As Matthew Syed puts it, ’we can get better with good feedback and practice. Success happens through a willingness to engage with, and change as a result of, our failings. Get that right and everything else falls into place.’

On that note, let’s all embrace ratings and feedback to be successful!

Ready to join that challenge?

Try TempaGoGo today!


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