• Mark Pearce

How to cremate your recruitment fees with a magnifying glass

Late night calls after 9 hours in the office aren’t the most attractive. They're a bit dull when you’re speaking with a HR Manager, who’s only interest is your recruitment fee.  

We hadn’t broken into a meaningful conversation when he crashed head-first into, “Tell me your typical fees?”

Typical fees? At 9pm? Does this guy still burn insects with a magnifying glass? 

In a previous blog, I used an analogy about painters painting a house. I like painters - they make good analogies. Here’s another. 

Imagine ringing a painter and asking him if he’s available to paint your house. You want it painted inside and out. Without checking his availability you launch into, “What’s your typical fee?”

Would it be typical for him to quote a fee without seeing your house? Would he know how many rooms you have? Does he know how much paint or time he needs? 

You’d think he was mad. You'd probably end the call and laugh at his stupidity. Much like you should with a recruiter who can fire a fee off the bat.

The problem is this - it’s expected of recruiters. Employers see recruiters as an easy ride. They know if they ask for a typical fee, it’ll be a low percentage or number. The objection of ‘how much?’ develops what sounds like frantic tapping on a calculator. Someone is afraid to lose business. 

Typically, it’s the scraping of abacus beads as a further 5% quickly falls away. With those beads, the credibility of the recruiter and our industry slowly die. The tragic part? There’s rarely a murmur of exclusivity or a retained fee in return.

There’s always a winner in this race to the bottom. When you’re against five other agencies battling it out over a 10% fee, you might win. 

You’ve also demonstrated you can’t negotiate. You’ve shown you have no self-value or belief in what you do. The employer is burning your wings off under their magnifying glass. How do you feel now? 

How do you agree a fee without knowing what an employer wants? 

The simple answer is you can’t and you don’t. How will you know how much work is required and whether you can deliver what they’re asking? 

If you’re a recruiter who prefers the quickest escape route with a ‘typical fee’ without any evaluation, you’re only aim is to pacify employers and hope terms of business are agreed. Crap terms at that. 

When you set a fee, you're defining your value. When was the last time you measured how much your time, experience and skills are worth?

If you want an employer to know your fee, they need to know what skills, experience and time you’re going to bring to their table.

Here’s a quick summary of how to partly demonstrate this. Imagine you’re called with a job vacancy. The employer immediately wants to know your fee. This is why you can’t answer.  

Complete a full job brief

Start with taking a full brief. This means asking more than three questions to scribble on a post-it note. On top of fully qualifying the duties, pay and essentials of the job, you’ll need to know why someone should leave a job they’re happy in and join the employer. 

You’ll need to craft a compelling value proposition to engage and attract people. You’ll need to gauge whether the salary offered is attractive and aligned with what the market is paying.

You’ll need to agree to work with both hiring managers and HR so the communication is flowing. Candidates have to be kept updated. This is after qualifying how many recruiters have already worked the vacancy.

When you’ve completed your brief, arrange a callback with the employer. Why? You’ll need to go away and evaluate the position you’ve taken. When you call back, run through your evaluation.  

At this point you have a choice. You can run through your fee, explaining the value you’ll bring to the hiring process and work the vacancy. Or you can explain that you can’t realistically fill it. 

Without taking a full brief, you’ll never know how difficult the vacancy is to fill.

Post brief

You’ll have to research your candidates. If you’re lucky enough to have a researcher you’ll be crafting your pitch to attract and engage candidates. You’ll be going to networking events, approaching people who are happy in their jobs and selling the employer’s value proposition to them.

As you gradually move through the hiring process, you’ll set up interviews (perhaps psychometric tests for some employers and candidates) and help candidates with interview preparation. You’ll manage counter-offers and offers with the selected candidate. 

You’ll manage the feedback process with the unsuccessful candidates. You’ll manage seamless feedback with the hiring manager and HR. You won’t disappear. 

And you’ll likely keep in touch with the candidate as part of your post-placement service. 

Stop quoting typical fees

This partly outlines the hiring process a recruiter will go through if they’re working on an exclusive or retained basis. The experience and craft comes at a premium.  

Do you honestly think you should realistically give a fee straight off the bat? Of course you don't. You have more respect for your worth. Whichever way you look at it - a fee given without knowing what work is involved is poor practice. 

I lied earlier. Being asked for a typical recruitment fee at 9pm isn't dull. It's fun when you outline your value to an employer. 

If you’re on the phone to an employer in future and they immediately ask for your fee, ask them to put the phone down if you quote one without further evaluation. Seriously. 

If you’d prefer, grab a magnifying glass, run outside and hold it above your head. 

What now?

  1. Hit a glass ceiling at work? Maybe it’s time to look for a better job?

  2. Finding it difficult to attract high-performing people to your business?

  3. Neither, however, I’m happy to sign up with 600+ people for future employment and market insights.

Inverse Energy is a search consultancy based in Perth, Western Australia with a focus on mid to senior management and leadership jobs across the energy, mining, infrastructure and defence sectors - worked on a retained or exclusive basis.