Fee negotiations. Fun stuff, eh?
You finally connect with a manager that seems to need your help. You think you've done a good job "not" sounding like an idiot. Though the position was a little outside of your comfort zone you held on nicely. Your questions seemed to spark quite a dialogue: What projects will this person work on? How big is the team? Tell me about your company.........why do you LOVE working there? What are the types of companies that seem to have the best candidates? You know - all the questions you think will help you establish your credibility BEFORE you let them know your fee is...........(drum roll please........)
30%. Or maybe you start at 25%. Either way - you think you've executed your work flawlessly and hope they'll say "OK".
But that doesn't usually happen, does it? Not from what I see and hear.
"We have a policy of 18%". Or "All our vendors have agreed to a cap of 15%"
Damn. And you were so close!
So what do you do? How do you reply to this one? This is one of the 60 second periods of your day or week that GREATLY impact your income for the year.
Rather than suggest a canned reply (there are hundreds - and I've heard them - and tried them - all) let me ask you something: What makes you believe you should charge more than the others who have come before you? You might think "Well - must be the other agencies aren't providing the right candidates. They NEED me!"
But guess what? No they don't. The other agencies ARE getting it done. Turns out - you're just asking if you can play too! So now what? You better change your thinking on this one. You aren't the best. You don't have the greatest candidates. You have no "secret stash" of top talent. The guy in your inbox is also on your competitors desk. Know it. Live it. Deal with it.
What service do you provide which you think commands a higher fee? Have you spent much time thinking about this? If so - have you DONE anything about it? If you haven't - I've got news for you - you don't deserve a higher fee........
My personal opinion is this: once you get to the point of haggling over fees the recruiter has already lost the game. The recruiter didn't do a convincing enough job of selling value upfront. The types of people worth working for will not typically haggle over fees. My experience is that the types who did always turned out to be regrettable clients. Look, these folks have a budget for hiring and the recruiting fee is already factored in. Those out there haggling to save a couple thousand dollars are wasting everybody's time; they probably have six other contingency recruiters in the fold working on the cheap, why get involved in that?
Since i like to dance to be able to build a relationships over a period of time. I took the deal, made it a point to deliver top candidates consistantly, got to know a lot about the client and watched a lot of those other contingency recruiters fall off the radar as i got to be the "go to gal". Now i get the big ones that the other recruiters don't ever know about and a retainer and a bigger fee.
Those 18 and 20% fees looked pretty good last year when everybody was trying to figure out a way to pay the rent.
All i look for is a chance to play. I can prove i'm a star when i get on the field instead of beating my chest with my own ego up front.
I'm only going to address the second point because the "selling" part is up to every individual recruiter.
When a prospect starts asking about my fee immediately, I attempt to turn the conversation around by saying something to the affect of, "I can appreciate that the fee is important to you, Bob. However, we have not even talked about the value I bring to the table yet. If you don't know what you're getting for your money, any fee I quote you is too high, right?" Basically, I inform them that they are putting the cart before the horse at this stage in the game.
Now, one of two things will happen at this point: 1) The prospect appreciates your logic and agrees to discuss the position and what you have to offer without worrying about the fee yet; or 2) the prospect doesn't want to waste time talking to you without knowing what the fee is first.
In the first situation, you're dealing with a legitimate buyer. This person is going to be a good long-term client if your value proposition is sound. By the end of the conversation, the fee will not matter (assuming it is reasonable).
Conversely, in the second situation, you're talking to a cheapskate that does not care what type of value you offer. If you take as much pride in your work as I do, this person is not worth wasting your time on. Run fast!
I hope my approach helps some of you out there who face this dilemma.
Good stuff. Great conversation everybody.
Now that you finally got in the door and got a chance to make a pitch for their business do you really want to tell them that they are either a buyer or a supplier or are you looking for an opportunity to develop a new client. My take is that the timing to talk about how wonderful we are and how if they don't meet our terms we wil take their shit down the street is not when we are doing the asking, it's when they call us.
I personally have no tolerance for fee discussions regardless of what side of the ball I am on. If the other side is not receptive at all to listening to what I have to offer the game is over. No matter what, if the fee is the first and major factor in the relationship, it is always a bad relationship.
The premise in my original post here was you call them, they say yes, you tell them your fee, they say "our fee is XX". My real question is really quite simple - what makes any one of us think we deserve a higher fee....When the actual service itself is indeed the same?
You're good looking? You have a stronger web presence? You've somehow survived for 25+ years - so that's gotta mean something? You placed somebody there a few years ago?