When is it OK to fire your client?

Maybe I'm just thinking out loud, but it seems that for every great customer you find, there are a handful you are indifferent to, and a couple that can make your blood boil at the drop of a hat. The list of offenses is a mile long and could be anything from never giving specific feedback on disqualifications up to refusing to pay a fee. No matter what the transgression, recruiters still need to make placements to get paid, so when do you move a company from the 'client' to the 'source' category?

To be perfectly honest, I'm no longer in the position to do this myself since corporate recruiters don't exactly have the freedom to tell Mr. Manager they are no longer going to fill any of his positions. For us, even the worst of customers still needs to be serviced. However, for our friends in the search business, this isn't the case and a conversation with a friend got my wheels turning about just when enough is enough. This recruiter (working for a firm) was part of a team trying to build new business. One client in particular was a tough nut to crack and despite several close calls, 9 months after the first submittal there was still no hire activity.

It was then that my friend reached out to do some checkups on long-time candidates of his. One particular phone call resulted in the discovery that said company had proactively reached out to a candidate only a week after the 6 month ownership guarantee expired and offered an interview for the same position she was submitted to but the company claimed was canceled! Roughly a dozen phone calls later and it became clear what had happened - this company was using search firms to stock their talent pond! It goes without saying that ties were broken in this instance, but it isn't always so easy to tell when it is time to make the breakup call.

Now I'm not suggesting to turn every client who goes a couple months without hiring a candidate into a source, but it is also important to make sure you're not getting walked on. Even on the corporate side of things I'm a huge advocate of relationship building, but those relationships need to be mutually beneficial, especially in the search world.

I won't claim to be an expert, but for my money, the second a client is all take and no give, it is time for the 'come to Jesus' talk to take place. Keep in mind, there could be a very legitimate reason for the departure from the normally blissful union of supplier/customer. However, if the client cannot convince you that the intentions are nothing but good and the next time around will be different, it might be time to think about shifting your priorities elsewhere. After all, a customer that is stocking their pond with your candidates will never pay the bills, so why not work on strengthening your relationship with the one that does instead?

Comment by Jim Durbin on January 22, 2009 at 6:33pm: There is an excellent book on the importance of finding profitable customers. I forget the title, but the basic premise is firms often bring in money without thinking about whether or not they are making a profit on the transaction.

A perfect example is a large telephone company that no longer exists. It was a huge account, millions of dollar a year in revenue, and yet I couldn't shake the sneaking suspicion that it was actually a money loser for a company.

While it was a prestige account - I couldn't ever get answers as to whether or not it was profitable to service. It certainly wasn't for the recruiters unlucky enough to be forced to work on it. In addition to a lot of wasted time, the bill rates were abysmal.

When looking at clients, there are two criteria. Are they worth your mental energy to work with, and are they profitable. Number one is often dependent on number 2.

Comment by Rita Beerle on January 22, 2009 at 6:45pm: It is disappointing to try to please a client only to find that they are just using you. This seems to be becoming more commonplace than not.

When looking at clients do you find it best to approach the HR professional or the individual who will actually be hiring the candidate? I have found that many of the HR professionals are not willing to work with independent recruiters. Part of me thinks that they are attempting to protect their own position within the company....

Comment by Gino Conti on January 23, 2009 at 8:22am: Rita - interesting question. As I mentioned in the post, now I'm in that corporate/HR seat but have a background working for a search firm. While working for a firm I was never thrilled with the prospect of working with HR because things did seem to move a bit more slowly. However, the companies where we at lest kept HR in the loop on what we were doing were without doubt more successful accounts and I think there are a couple of reasons.

Just looking at my current company it is very clear that hiring managers know precious little about the recruiting process or budget. That said, we currently have spent our entire staffing budget for FY08, but a manager may not know that. If he or she committed to paying a fee there would be somthing of an internal struggle over whose department those funds would come out of. Also, managers have no access to our ATS, so it would certainly slow down the process of researching whether or not the candidate was already 'owned' by another supplier or was active via one of our recruiters.

I do think it is worth mentioning that in my group using a firm to fill a position is not looked at negatively as long as we still have money left in the budget, so we don't necessarily get into a CYA mode of only filling reqs ourselves. Unfortunately the same cannot be said for all HR departments, but that gets to the heart of my debate over when to fire a customer. The protectionist attitude of a corporate recruiter or HR manager trying to avoid ever paying a fee will become obvious, and that is when you respectfully part ways and begin to recruit for more cooperative clients. Ideally, the goal would be finding an HR manager willing to work you with as part of their HCM strategy, but that's a whole other ball of wax!

Comment by Jim Durbin on January 23, 2009 at 12:48pm: An excellent point Gino. Recruiters do themselves no favors focusing solely on their needs. HR has lots of reasons for not working with recruiters, from the petty and personsal to budget and corporate wide policies that will affect our candidate if they are hired.

We should be working with the entire company to understand the hiring process, allowing us to understand hiring bottlenecks and how to fix them. Sometimes is it HR, but sometimes HR is only doing their job masking a bigger inefficiency in the system. And sometimes HR is doing a better job of protecting the company than the manager.

Our job is to know as much as possible.

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