Combating Fee Reduction Requests in Life Science / Healthcare

“We are only working with agencies who are agreeable to our new reduced fee requirements. I am sure that you can appreciate it, with the economy and all.” “Actually we have so many resumes right now, unless you are willing to reduce your fee, we just can’t justify working with you.” Does this sound familiar? If so, listen with a discerning ear. Lessons of 2001 indicate that often this stance is a façade. There are other vertical’s where this is not true but in the life sciences and healthcare world much of the economic “erosion” is an illusion. There are exceptions such as the large Pfizer layoff but compared to sectors like Mortgage Lending the challenges in Life Sciences and Healthcare are thankfully light. Forward thinking organizations know that the best people are currently harder than ever to extract from chairs within competing companies because of the intensified risk aversion accompanying this economic downturn and it’s most challenging by-product, fear. Therefore, it is precisely because of the current economic environment that clients must and will pay full fees for top talent.

In fact, there are challenges that make filling a job order tougher now than before the onset of this recession. You have to sell against risk aversion. You must expose and address pain points. You need to stop and listen as hard as you have ever listened before. Yes, there are a lot of people out looking for work and some of them are very good at what they do. Many are not. Not all companies are great or even good. But good companies don’t stay successful by laying off their best people! The qualification process must be intensified as well and presentations have to shine brightly enough to differentiate your candidate from a growing crowd.

The idea that it is easier to find the right talent is an absolute myth and the companies that understand this are enjoying the advantage of operating within the realm of reality. Just because the crowd is bigger does not mean that the crowd is more talented. It is just bigger and thus requires more work to sift through. This is challenge enough. The good candidates that are active in the job market are being courted by multiple companies and getting multiple offers.

The top people are not looking. This is where you earn your fee. Suddenly the executive within a sound biotech firm in San Francisco is nervous due to a recent merger. She is not willing to consider new positions at this time but when you call she mentions that she doesn’t feel very secure and “probably should dust off the old resume.” You discover her goals and take her direction over the course of an hour long conversation and suddenly you have a extremely placeable candidate that is not part of the crowd, not available to in house recruiters and not looking at other opportunities because of the economy.

So next time you hear the negative spin on our economy and are presented with the idea that the current downturn should result in a reduction of fee, DON’T! Instead, ask that potential client a few more questions. “How comfortable are YOU in your current role?” Any chance that you would consider looking at an opportunity right now? Why not?” Given the prior downturn blame game, I submit that 75% of the time this same person will say that they would be crazy to look in this economy. Then ask a few more questions “Do you consider yourself to be an above average performer?” “Is it fair for me to say that you are not alone, that the majority of above average performers are as risk averse as yourself? If this logic is sound then it would also be fair to say that the majority of these masses of candidates that are available right now are below average. Well, I don’t ask that you invest in my firms 30% service charge to provide you with below average talent. I do so because I know that I can go out and get the best.”

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