Talent Acquisition

Client Got a Fee in Their Bonnet About Agency Prices?

Okay. Time to talk about something in agency recruitment which can cause all sorts of problems for newbie consultants, and even seasoned ones: the ‘percentage’ fee.

Most recruitment companies work to a set percentage fee based on the basic yearly salary of the candidate; this tends to be somewhere around the 20% mark. Now, clients begrudge paying recruitment companies anything… as in their eyes all we do is trawl job boards and bung across any old CV that might fit the bill. So, when the newbie is having a good old chat with a potential new client and the topic of fees comes up, the conversation quickly goes south (unless the newbie knows how to combat incredulous wails and downright hostility).

What do the cries sound like?  

“What?? 20%???? The recruitment company I usually deal with does all placements at 8%… if you want to work with me you’ll have to drop your rates.”

A newbie consultant might not know how to combat this… given they are, you guessed it, new. So how can they (and you) deal with this constant pushback about prices and terms?

1. Acknowledge the client’s concern

Consultants needn’t get nervous or worried when they get pushback from clients about prices and percentages. The first step to mitigating friction over this is to acknowledge the client’s issue or concern, perhaps by repeating it back to them, empathising with them by saying, at a first glance the price might seem high. The next step involves making a great case to support the expense.

2. Explain why, clearly and concisely

This involved explaining the process you go through to find your clients the perfect Widget Noodler, for that manned site in Samlesbury Bottoms. You know, the one the other recruitment company couldn’t fill for the last 6 months? The explanation should go a little something like this…

“Firstly, Fred, I will find you 3 candidates who fit the specification you have just given me. I’ll make sure they have Noodled for at least 5 years and that they know how to Firtle with the best of ’em. Then I will vet them to make sure they have no skeletons in the closet which could cause issues further down the line. I’ll get them across to you with prospective dates for interview (bearing in mind Fred, all of this work is free). I’ll make sure my candidates can meet you at a time which is good for you to interview them. At that point I’ll get you to tell me what you think about each of the. If one proves to be your ideal candidate who you believe would be an asset to Fred Quimby Noodlers PLC, and if you then decide to make them an offer, then great! I will then speak to the candidate and put your offer across to them, if they accept, then and only then does the fee come into effect. That is, a fee for the candidate you truly believe is ideal for the open role with your company.

Quite possibly, Fred will still quibble over percentages, but the newbie consultant should still be able to keep him realistic about pricing for your service. You know, the one which is TOTALLY FREE until they decide to hire.

Clients need to know how much work actually goes into finding people for them. Let’s face it, if it was as easy as they try to make out it is, then they would fill the job themselves. Be proud of your hard work and let your clients know how laborious, carefully thought-out and consultative the process is that goes into finding the best person. After all, that’s why the 20% fee is in place, and that’s why YOU will fill the role with the ideal candidate, not that 8% CV mail shot crew who he referred to as his ‘usual recruiter’.

3. Stand your ground

If you’ve got a client who just doesn’t want to play ball, don’t be afraid to walk away. Time is money and your time is valuable, so make sure your prices reflect that.

*Samlesbury Bottoms is a small village in Lancashire with a rather large underused RAF base

*Widget Noodlers are making a comeback (possibly just on this blog though)

*Firtling is alive and well

By Paul Murphy

Paul Murphy has been working for SER Limited in Engineering Recruitment for over 11 years specialising in the intelligent buildings sector – especially BMS (Building Management Systems). He is also it seems a part time keyboard warrior on behalf of recruiters everywhere.