What makes you think you deserve a "premium" fee?

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........

Comment by Kevin Jenkins on June 3, 2010 at 2:49pm: Jason is correct. While I am fortunate to have most people calling me, I reach out to others often for business and use the exact method he has described. Contrary to what so many recruiters believe, the quality clients are not looking for a low fee. They are looking for a dependable, resourceful, and effective recruiting partner at any cost. If they can get that, they treasure that relationship and it trumps fees.

Comment by Slouch on June 3, 2010 at 2:55pm: Jerry. It's tough to run a business pay out 50% in commission to your recruiters and still be left at the end of the day with enough money to grow that business and live well on 18% fees. I suppose it's easier to do it if you work out of your home or something like that but if you want to pay rent, hire, be aggressive in your company growth you need to charge more than 18%. I think it's important to try to negotiate the best you can if you are the one doing the search. It has nothing to do with how good looking you are.

Comment by Kevin Jenkins on June 3, 2010 at 2:58pm: I think a number of things, Jerry:

- functional expertise (call it a niche, you need to have a better understanding of the role being hired for than the competitive recruiters do)
- industry expertise (you need to be able to add value by understanding the client's industry and giving them insight into what the competition is doing)
- network power (you need have an impressive network that is demonstrable by doing a google search. recruiters need to be savvy in social media, etc.)
- flexibility (so many recruiters have one-size-fits all flat fees and terms that just don't work for everybody. you need to be able to listen and bend but not break)
- ambassadorial quality (you must be able to make a great impression to candidates. proving that you do is critical)
- speed (you should be able to prove that you are fast. your network will typically help convince them that you can deliver fast)
- process (you must have a field-tested and real process. willy-nilly seat-of-the-pants recruiting without a process is a recipe for disaster)
- source (you must be able to show that you fish in the deep waters and are not trawling the job boards for low-hanging fruit).

well, there are many more but there are a few to get the conversation rolling.

Comment by Kevin Jenkins on June 3, 2010 at 3:01pm: i should add confidence - this one will drive many "undesirable" prospects away but it will seal your bond with the best ones. By confidence I mean that you take charge of the assignment and the client respects it.

Comment by Jerry Albright on June 3, 2010 at 3:05pm: Kevin - thanks for your contribution to this one. I always enjoy a good ole fee discussion!

Slouch - I have never and will never recruit for any position less than 20%. I will only work on a 20% fee AFTER a client has worked with me at my original fee structure.

I'm just trying to get the wheels turning a bit for those who may read this which might better prepare them for these situations in the future. Something beyond "Well - it's just our fee policy and if you can't pay it I'll just move on." goes a long way. Battling with a client over a fee when you can not show how you are any different from the last caller and the next is usually pointless.

I had lunch with a client yesterday. She said she can't even answer her phone any more. Gets 10+ calls from recruiters EVERY SINGLE DAY. This is real life. To them we all sound the very same on the first call. What WOULD make someone like her consider paying you more?

Comment by Sandra McCartt on June 3, 2010 at 3:05pm: I thnk each situation is different. I want to know why they cap their fees, what they are not getting from other recruiters. Is it budget, is it that they do think the actual service is the same. There are as many ways to go about it as there are reasons why a company sets a fee structure. If i want to play in the sandbox i will figure out a way to make everybody happy. In my sense of business it's a good deal when both parties walk away thinking they left a little on the table. I don't have to have it all up front. Some of the buyer/supplier stuff will work in some markets ,in my orb if someone says that to a client somebody will tell them to "get after it, hotshot", then offer their employees a bonus to report that recruiter for calling them and make sure everybody in their business circle hears about it. They will burn your bridge and burn your butt. In the South they refer to that as obnoxious blackmail by an asshat recruiter.

We all know it but we sure don't say it out loud even if we do it. Sort of like, "Bless their hearts, they didn't like our fees, sure was too bad that we couldn't work for them." The translation from Southernese is ..."I am a fixin ta recruit the hell out of their best people but i am not dumb enough to tell them. So when they have about four critical openings they are gonna call me for help cause they kinda sorta know that i am the one who is doing it. That fee is a lot easier to sell when the call comes the other direction. But see we just don't ever talk about what just happened then everybody can nice each other to death and the beat goes on.

Comment by Sandra McCartt on June 3, 2010 at 3:10pm: You got er Jer. When your prospective client tells you over lunch about the numbers of recruiters calling her per day you just got your fee.

Comment by Kevin Jenkins on June 3, 2010 at 3:25pm: I'd like to comment on Jerry's reference to the "10+ cold calls a day" from recruiters.

I'm going to be honest and what I am about to say is certainly going to fly in the face of "recruiting 101" fundamentals: but I don't cold call. I hate being cold called and I hate cold calling others. I think cold-calling is an excuse for not being able to elicit "warm" contacts through effective networking. This is not 1980 ... we don't have to "surprise" people on the phone ... disrupt them ... put them in an awkward position to ask for their business. Technology enables us to lead a graceful approach.

I have not made a single cold call in ten years and I do just fine. And I think that is a good thing considering what I'd be up against today (10+ a day) if I did.

Comment by Jerry Albright on June 3, 2010 at 3:38pm: Actually Kevin - it wasn't necessarily described to me as 10 "cold" calls. As I recall her description of the calls many just end up hanging up from numbers she doesn't recognize. Others leave very lame/cookie-cutter voice mails referencing their latest job posting on Careerbuilder.

While having a relationship is always the preferred way to go I do find that many times I just need to pick up the phone and introduce myself. I do it. I hope though my call doesn't sound in any way "cold" or "salesy" but you never know. Sometimes I'm just off my game and sound like a salesman no matter how hard I'm trying not to.

In fact now that I think about it - I AM in sales. So what's wrong with sounding like it? (I'm asking myself as I type this - not you guys!)

Comment by Kevin Jenkins on June 3, 2010 at 3:44pm: True, Jerry. In fact, everybody is in sales in one context or another. My point about cold calling is that I am very effective without having to do it. I like working my network relationships and growing organically that way. For others, cold calling may produce results and you can't argue with that. I guess I just feel like cold calling is a thing of the past. Maybe I am wrong. I am just glad I don't have to do it for a living :o)

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