Fee negotiation

One of my clients want to renegotiate our fee the day before he issues a job offer to one of my candidates. He wanted to pay only 75% of the agreed upon fee. She cited that it is our second placement and that the first placement left 2 months after the guarantee period.

Initially, I wanted to say yes to the reduced fee, but upon speaking to my manager, I refused. I send the client an email explaining why I won't be able to accept her offer.

Now I wait.

What would you do?

▶ Reply to This

Replies to This Discussion

Permalink Reply by Nicholas Meyler on February 13, 2015 at 1:41am

Exactly what you did... except I might add that you are actually renegotiating the fee, too, and you want to be paid double for the candidate that lasted beyond the guarantee period -- two months -- justifying why you want to double the fee.

No, seriously, it depends on whether you see any potential with the client. Ask them why their company is so horrible that the first placement left after only a few months, and then ask them if they would mind paying surcharges for their high turnover rate.

▶ Reply

Permalink Reply by Linda Ferrante on February 13, 2015 at 9:20am

Waiting until the day before the offer is made makes me question the integrity of the client. By that I mean, the reasons they are citing for reducing the fee happened prior to that day, so why are they bringing it up now? To put you over a barrel and you are 'forced' to say yes?

Part of me says you should stick to your guns and remain at full fee. That previous placement has nothing to do with this search, recruiting and placement. Two separate issues.

However, if you want to keep this as a client and see the value in making the reduction in fee, it's worth looking into. We often reduce our fee when there are multiple placements and we have a proven track record with that company.

Please keep us posted?

▶ Reply

Permalink Reply by Noel Cocca on February 13, 2015 at 9:31am

I would refuse and offer a fee break on the NEXT contract. What was your guarantee period in the contract if any?

▶ Reply

Permalink Reply by Raphael Fang on February 13, 2015 at 1:03pm

It's Friday Morning and I still haven't heard back from the client regarding the fee.

▶ Reply

Permalink Reply by Linda Ferrante on February 13, 2015 at 1:40pm

Are you still in communication with the candidate? Have the two of them been in contact with each other?

▶ Reply

Permalink Reply by Raphael Fang on February 13, 2015 at 2:11pm

Spoke with candidate this morning and informed him that I have no further information.

▶ Reply

Permalink Reply by Nicholas Meyler on February 14, 2015 at 12:06am

Part of the art of negotiating is knowing when to walk away from the table... be prepared for either party (i.e. including yourself) to do so at any time, if it makes sense. They are stalling to create tension, and try to force your hand. Or, they just don't care. Either way, don't cave in.