Fees

 

Is it possibly time to re-visit yours and my favorite issue again? Fees. The bread and butter, bone of contention and pesky contractual obligation that faces every recruiter on the planet. Well, at least these days I don’t go off my rocker when someone proposes a ridiculously low percentage for an executive search. In fact, I find it hard  not to chuckle outright. I just figure, said proposer is clueless about what I do. I do feel it’s still incumbent upon me to educate them to some extent (and of course possibly get them to sign up after all). But to be serious, there is still sadly, a lack of respect internally and externally for the recruiting profession. When a company tells me they regularly use agencies/recruiters at 15%, my first response is disbelief. What self respecting recruiter would undercut industry standards to get a marginal fee for the time invested up to and through a search? This type of undercutting tactic is the scourge of the industry. How can those in the recruiting industry who regularly slash fees expect any respect without adhering to their own standards? What does that tell you about their ethics, ability to deliver and their tactics?

 

I can’t help but wonder what the client expects in return for low fees. Stellar candidates? 100% agency commitment to their search? Personally, I think the level of commitment between both contractual parties is going to be minimal. Where’s the incentive for the agency to produce? And with such little incentive, what will they produce? Most likely candidates hanging around their database or quickly plucked from an online ad (and we all know how I feel about that!).  A company that has negotiated cut rate fees has already demonstrated their lack of commitment to the very idea of the process. And it’s a self fulfilling prophecy when they receive sub standard resumes and service.

 

I can make the fee argument again eloquently, if I have to, but it’s almost beside the point here. My sticking point lies primarily with the recruiting industry itself.  We are a fee for service business. We should be providing a valuable and unique service, which requires skill and experience. When we undercut industry standards, return money and give unreasonably long guarantees, we devalue our services. Lawyers and accountants don’t do it –and can you honestly say, finding the best talent for your team is any less important than the services your attorney and CPA provides? I would argue that it isn’t.  Failure is a direct result of this slashed fee method, which results in high industry turnover. Everyone suffers here; recruiters, the candidates and the clients.

 

I know there is an argument over the lack of requirement for professional certifications and the lack of standardization or education in the recruiting world, but anyone who has ever engaged a really effective recruiter, knows it is a unique, not everyone can do it, occupation. It takes years of investment, dedication, practice and failure to earn credibility and connections. You can say it’s an on the job education.

 

The old adage about getting what you pay for actually holds true in the recruiting industry.