Placements for Less

Well, I made a placement today as the owner of my own career management biz with a company I have worked with (on and off) for a number of years. When I joined a staffing firm at the beginning of 2006, they were paying the staffing firm 20% of the annual salary. By the end of 2008 they were paying 18%, and this year, they are paying between 10-12%. Now, this might seem dismal, however I am finding that as an independent contractor I can undercut larger agencies (they probably wouldn't take the job order anyway) and still make significantly MORE from a commission standpoint than if I was a full-time employee of an agency. On the flip side, it definitely requires more discipline to keep the client pipeline going, but I must say, it felt great to see the offer letter and know that it was my work that "sealed the deal". So what does all this mean? It means, you go small entrepreneurs! Keep plugging away and don't give up...

Comment by Tim Spagnola on September 22, 2011 at 8:07pm: Congrats Elizabeth! Feel great to get that first one all on your own. To many many more.....

Comment by Bill Schultz on September 22, 2011 at 10:21pm: Congratulations.

Comment by Steve Jenkins on September 23, 2011 at 11:26am: How timely. Our Association (Rocky Mountain Association of Recruiters) just held the Big Biller Panel and awards ceremony last night. The recruiters with the largest billings for the year are lauded and asked a zillion questions.

More to the point. The question was asked, "What is the one thing you would tell rookie recruiters to always remember" All three speakers (all billed over $750k in the year) said the excact same thing.

As a recruiter, you are worth every penny in fees; no fee is to be cut, walk away from companies who are looking to pay you less"

You are right on one point; many recruiters would not take the job order with your client.

They are too busy with "A" orders. With clients paying them what they are worth.

Undercutting only serves to lower the opinion companies have of recruiters.

Comment by Jerry Albright on September 23, 2011 at 11:31am: First things first. Congratulations Elizabeth! Each and every placement is to be cherished!

More importantly though is the cut fee topic. Don't do it! I could list dozens of reasons why not - and can not find any reason why you should.

There are MANY firms who will pay what you are worth. I don't have time to continue right now - but if I have time I'll drag my soap box over here and pound this topic into the ground.

Don't do it. ;()

Comment by Elizabeth Kaufman on September 23, 2011 at 12:44pm: You know what? You are absolutely right and believe me, I have gotten a boatload of commentary that is similar to yours. I am good at what I do; I should be paid accordingly. Sometimes, it's easy to forget that when the bills are piling up.

Thank you again for your candor.

Comment by Terry Cobb on September 23, 2011 at 12:52pm: Elizabeth - good for you and congratulations on making that placement. In my company I offer fair and competitive pricing for my services as well and yes, I do get a lot of the low hanging fruit that bigger companies ignore. What they don't see is that I'm not undercutting their big fees, I'm just working jobs they don't want. I make a very nice living with smaller fees and a larger number of placements. Keep up the good work.

Comment by Elizabeth Kaufman on September 23, 2011 at 1:11pm: :) Thanks. I still think that I ought to start higher in the fee percentage; if the client comes down to a place that works for me, then it's a win/win. Since i started my biz. in 2008, I partnered with other firms because they provided a more robust database than I had at my immediate disposal. Since I am also a resume writer and career consultant, I have begun to build a pretty decent database of my own; this was the 1st placement I made w/o the help of an outside agency. Sort of felt like that 1st dollar that you might see in a frame near the register of a store; it's the beginning of good things to come!

Comment by Amber on September 23, 2011 at 1:14pm: @Elizabeth, congratulations on the placement!!!

It is very difficult to get clients, and the fee is obviously a big part of the negotiation. So just thought I would throw in my two cents of "real life" happenings in the past 2 years that I have been an independent recruiter.

I have recently started my discussions with new (and some current or former!) clients with my fees being a combination of retainer and contingent. I started doing it with companies I saw with positions that were going to be hard to fill. (I think that made me feel more confident and justified in asking for retainers!) I found out:

1. The objections I thought were coming often did NOT - wow, wish I had started doing it sooner!

2. The clients who are open to it seem to be much more serious about filling positions.

3. I actually get much better communication with the clients.

And I also have not been so ready to go less then our normal fees or any other compromise since I am finding that there are clients out there who are great to work with and willing to pay for a service that works better for them. I have also noticed a much lower stress level because I am more able to work on my terms while delivering what the client needs. Still have a way to go to be as stable as I'd like, but it's a much more pleasant ride now then when I felt like I had to take any and all orders that came my way.

Comment by Jeremy Spring on September 23, 2011 at 1:16pm: Congrats on the successful launch. One thing to consider in such a crucial stage of development for your firm is that you're setting the fees bar very low and you may never be able to raise that bar. You'll most certainly not get the clients who pay you 12% now to pay you 18% next year, and chances are good that any business referred to you by current clients will bind you to the same schedule of fees. Very rarely can businesses shake a reputation for cut-rate pricing, in my experience.