It’s been a funny ol’ week. I’m actually off back to Blighty for a wee while on Saturday, and the final week before leave is often a bit disjointed. Simultaneously hoping to get some more work in whilst also trying to close everything off, all set to the backdrop of a country who would rather procrastinate over email than pick up the God-damn phone and get a deal closed. However, it’s not just my impending guilt-fuelled trip home with a new-born, trapsing across a country which I have no interest in, which has made it slightly odd. Twice this week, we’ve had clients ask for a reduced fee based on them “running the process”. Those who have been in the game for three months or more will have no doubt encountered this; the idea that we charge a reduced “finders fee” and then hand the reins over to the client, with the promise that all we have to do is “send the CV, and then send an invoice. Maybe“. On the face of it, it sounds fair enough. Time is money, and this quick win is worth a discount right? Right??
Well let’s have a think.
Firstly, when a client asks for a discount, very rarely do they mean a single percent. In fact, in my experience, when I have offered a single percent, it’s seen as so derisory that I would have been better off not bothering. Like tipping with coins, a percent discount is a pointed “here’s your f*cking discount” said in a Joe Pesci voice, before pistol whipping the client. No sir. When clients ask for a discount, they want somewhere between three and five percent. If you charge your client 15% (as we all sadly do), and the average salary you place is $100,000, you’re looking at $3,000 to $5,000 less in you coffers. That’s a fair chunk of change. So what is this process, and how is it so expensive?
For non-recruiters, let me explain. “The process“ is this, and it gets complicated, so try and keep up. We organise two meetings. We ask two people if they liked each other. We take two times twenty minute references. We offer someone a job. And if our client runs this gauntlet, we are to charge them many thousands of dollars less for doing so. And you know what? I’m not convinced this is worth the discount. Can you tell?
I’m going to let you into a little secret here. When I’m organising interviews, I’m also subtly increasing both the client’s and candidate’s interest in each other. Every touch point is an opportunity to increase the chance of a placement. And yet I’m to outsource this and give away cash for the right to do so. And here’s another little secret. When I take references, I can sometimes also pick up a job or a new candidate, but again, I’m to give this up and also discount my fees for the luxury of doing so. And here’s one more. If I really see no value in taking a reference myself, I can get two verbal reference taken for about $100. I have wasted $100 much more frivolously.
And then let’s look at this from a client’s perspective. At first, saving a load of cash by doing a bit of DIY sounds like a no brainer. However, ask yourself this; If a recruitment supplier is so happy to hand over the reins of the process for a massive reduction in fee, what does this tell you about the candidate, the recruitment firm, and you? Here’s a few things it could mean:
- The recruitment firm doesn’t think the candidate is actually right for the role. The quintessential “shonk”. Send a CV, but don’t waste time on “the process” for a dead duck. Instead, take the 10% that may fall out the other end
- The candidate is a major pain in the arse. Some people are so obnoxious that I’d reduce my fee by 3% as long as I never have to speak with them again.
- You are a major pain the arse. Some firms, and some individuals, are so painful to hire for, that us recruiters would gladly drop our fees in order to avoid all contact with you. Some would say this of many internal recruitment functions, but given that they’re both my clients and candidates, it would be career suicide (again) if I were to agree…
- The recruitment firm is shit and just wants to make fees by sending CVs with little concern for quality. If a candidate is shit, then they always have the “you get what you pay for” mantra to bat you away with.
The elephant in the room however is that not every client wants to run the process themselves to save money. Whether we like it or not, some clients feel that they would secure a better result if they recruit the person, and not leave it in the hand of “the professionals”. This is often due to two sets of circumstances, both quite confronting. Either the client has used you before and you failed to convince them that you can run a better process than they can, or the client is so arrogant that they don’t value the services you provide over-and-above sending a CV. If either of the above are true, perhaps you shouldn’t be working together.
So that’s it. I’m not reducing my fees in future. In our line of work, the hard work is in finding the candidates. The rest is either fun or beneficial to me. And I still believe, naive as it may sound, that a decent recruiter’s influence in the process can often increase the client’s chances of landing the candidate. Instead, if you want a discount, we should look at the worst idea ever to befell the recruitment industry: the f*cking free re-f*cking-placement guarantee. I’ll leave that for another blog.
See you in a few weeks.