Australia's current transactional commission-based recruitment model is fundamentally flawed, and should be changed to a staggered fee-for-service model, according to recruitment executive, Toby Marshall.

Marshall, who founded Abacus Recruitment in 1994, argues that the lucrative commission systems used in many recruitment companies encourage consultants to take a very short-term view and make quick placements regardless of the suitability of the candidate.

"Their haste to fill the most number of posts in the shortest possible time to secure lucrative commissions means the real winners are the recruitment companies alone," he said.

Marshall argues that a better outcome for both parties can be achieved with a "true cost" model for permanent appointments that shares the risk of hiring between recruitment companies and their clients.

This involves a four-stage staggered payment system, with 25% paid at the briefing stage, 25% on appointment, 25% at three months, and 25% at six months. He said Abacus had largely based its business on this fee model for some years.

This fee-for-service model is superior to traditional guarantee periods, which are often not highly regarded by HR managers, said Marshall.

"Some would see this as treason but it's not really," he said. Rather, it's about making recruitment consultants take on a talent management role and not a "dollars for bodies" approach, he said.