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 Odalis Gonzalez on September 23, 2011 at 10:42pm: I'm planning to start my own recruiting firm and wondered about the fee. Ive heard 18% to 20%, Any suggestions? I would be working from home

Comment by Elizabeth Kaufman on September 23, 2011 at 11:01pm: Hi there. I suggest 20% to start but don't go lower than 18% if you can help it! Good luck. :)

Comment by Bill Schultz on September 24, 2011 at 1:27am: I prefer flat fees. Out formula is based on the supply and demand, like we learned in economics. I really don't see where the % model makes sense besides tradition.

We sometimes offer lower fees for early stage companies. This is kind of on speculation. If we like their story and feel they have a chance to be successful, we will work for less with the potential of establishing a foothold. We call this venture recruiting.

Our flexible and equitable pricing is one of the things that sets us apart in Silicon Valley. It also kept the doors open in late 2008 and 2009.

Comment by RecruitingBlogs on September 24, 2011 at 9:19pm: Great feedback...congrats Elizabeth!

Comment by FREYJA P. on September 25, 2011 at 12:38pm: I'm late to the conversation - and did something similar years ago when I moved into a new niche market.

I didn't cut my fees - I set them as competitive as my peers out there - but offered a 20% discount to companies for their first placement that year. So companies were aware it was a "once only" deal, and it was offered - and I used it as a thank you for your business up front.

I was shocked at how pleased clients were to get this little break. They know we are worth our fees, but it was just a bright spot in one hire that showed them I "gave them some thought" and it was a great intro for me for the "foot in the door".

Comment by FREYJA P. on September 25, 2011 at 12:40pm: I forgot to add - I made sure I did a great job on their hire and kept their business! Most are still my key clients today.

Comment by Chuck Morgan on September 26, 2011 at 2:08pm: Elizabeth-

Congratulations on the win. Always good news. I agree, stay strong and hold firm on your fees.

Comment by Barbara Goldman on September 28, 2011 at 10:48am: Congrats on the placement. You do not need to reduce fees to gain a great clientele. Last week, we made a placement at 25%. The other firms (a few) were on board for 18%. The CEO of the company actually felt a little uncomfortable with the discount firms. He asked me if I would have worked for 18%. The answer -- no. Never forget that placements are hard. We remember those that seem to be easy. The real proof of the pudding is not the last placement, but your overall business results. You will lose a lot of placements along the way. You are worth every penny you charge. You decide your worth. In most cases, the question for a company is do we pay a fee, or do we not? The question is not how low can we go.