As a client I never really understood why the fee for a £200k retained search was up to £50k higher than that of an £80k piece of retained search & selection. Actually I do understand: it’s called greed. Being in this business I do know that the cost of delivery of that £200k search is not significantly higher than that of the £80k role (taking out the oak panelling, huge salaries and expensive lunches). Let me qualify that. I have worked on some £200k+ roles that have been simple to fill and some that have been a nightmare; by the same token, £80k roles are no different, varying from simple to hellish.

So little guys/gals, time to disrupt. How? One area is fees. I know from talking to a lot of you that you have tried fixed fees and the client just says: “What percentage is that?” I get lots of emails about Chemistry’s ’fee at risk’ model but the truth is that while 100% of clients appreciate the thought, only 20% take it up.
Our clients are being encouraged to hire direct. However, most of them have also had their team numbers cut and therefore need to use third-party suppliers.
This is where we, the little guys, can disrupt. While I am not advocating you should focus on fees, the bottom line is your value proposition has to be more than dropping your pants. However, given the big guys’ fixed overheads, then disruption around fees is definitely an option.

Here’s an idea for retained search/search & selection firms: what if you priced on complexity of requirement not percentage of fee?
For example, if you fulfil requirements in excess of £80k, in the search world this would mean fees of 33%+. The bottom line is that it takes a certain amount of time to fill any role.

Invariably, the more senior the role, the less time it takes. The candidates are more mature, used to the process and more visible. In contrast, a £60k solutions architect is a nightmare role. There are many of them but few good ones, the effort required is significantly more.

What if you costed each role based on the time it will take and the sourcing methodology used? What if you showed the client the point at which you were making the right level of margin and you fixed the price at that amount?

We have just done this. A £100k role costs the client £18,100. There is no percentage; we are incentivised to hit the ’open book’ time-to-hire and cost-to-hire. If we do, from a margin perspective we will be happy, and if we don’t we will be punished for poor delivery. If the client is at fault, we have already showed them the fee impact of delays in the process - we have been open with them.

To my point: we can disrupt; we need to ’disrupt’, you need to find your way. By disrupting we will steal marketshare. This market will be flat for the next 18 months. The little guys/gals can steal marketshare from the big guys.

Above all we should react to a customer base that is tired of the same old same old and is seeking something new.