Fixed fee or fixing fees?
Joel Barnett on The only way clients are going to trust us is if we give good service at a fixed fee
Apologies if you are an unashamed recruitment ’agent’. This article does not apply to you. I do understand that some niches are entirely candidate-driven and some agents may provide consultative advice to candidates about their careers. However, the vast majority of people I know in the industry consider themselves to be ’consultants’.
And most recruiters wince at being called ’suppliers’; we all aim to establish a partnership with our clients as trusted advisers. Trust is the key word. Most hiring managers, HR folk and internal recruiters wouldn’t place trust high on the list of their feelings towards the average recruitment consultant. But if we are really client partners, don’t we have a duty to work with complete integrity and offer our clients greater transparency so they can plan in costs more predictably in these times of continued economic uncertainty? (You’ll also become the finance director’s favourite, trust me.)
With social media networks such as Facebook and LinkedIn playing an increasingly important part in our industry, organisations now have many tools at their disposal to source candidates directly. Only recruitment partners that really add value can thrive in this highly connected world - by connecting with their clients’ needs.
I’ve been on both sides of the fence, as an internal recruiter and a consultant, and I passionately believe that flat fee charging mechanisms imply greater integrity and a more authentic partnership with candidate and client alike.
Switching to a fixed-fee model will enhance your reputation with clients. It bolsters your relationship and allows you to be seen as a trusted partner whose recommendations are based on integrity rather than financial gain. You might then be viewed as a trusted adviser, rather than an agent for the candidate.
I applaud companies that create a preferred supplier list (PSL) to better manage their recruitment activity but it staggers me that companies with a PSL still use the old model. Other than the fact that a fee calculated using a percentage of salary is the industry accepted norm, I fail to see any other argument in its favour.
Flat fee rates show that your objectives and those of the clients are aligned - you want to place the best person, not the most lucrative. What if we go one step further and link our fees to the candidate’s performance and their success in the role? Can you imagine the impact that would have on the assessment process recruiters would undertake before sending CVs to clients? It would at the very least incentivise recruiters to spend time understanding their clients’ business in order to assess culture fit.
Channel 4’s Mary Portas: Secret Shopper series has retailers standing to attention. Her exposŽ of poor quality customer care is a stark reminder of basic good service, not only in retail, but in every sector including recruitment. The business environment is changing. Just as the high street changes, so should the recruitment industry.
The traditional model of charging a percentage of candidate salary rather than a fixed fee could soon be viewed as being as valuable as offering a changing room with no mirror.
Ask yourself, if tomorrow Mary Portas became Queen of Recruiters rather than Queen of Shops, what would she think your charging mechanism says about you?
