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“Pro rata” fees and other bad ideas

By June 25, 2021No Comments

This is a glorious time to be a recruiter. Yes, I am aware that there are no candidates out there. And there are probably still too many recruitment firms in existence. However, like a boomer Dad with a lawn to mow, we currently have a purpose. Y’see when the pendulum swings the other way, and there are no vacancies and plenty of candidates, we spend our days trying to wedge ourselves into the recruitment supply chain in an attempt to first make, and then justify, a 15% fee. Now, we’re actually solving a problem. Clients are coming to us, calling on our networks and expertise, and we’re getting well rewarded for some honest graft. So if you’re new to the industry, drink it in, because this is as good as it gets. This is recruitment as it should be.

It’s with this in mind that got me thinking on bad habits and bad practice. As power shifts back to the candidate and recruiter, and away from the hiring manager, now would be a good time to address some bad ideas spawned during crappier times. Now that we don’t have to be sycophantic brown-nosers to our clients, perhaps we can clear up some of the mess we’ve created for ourselves. Here’s a few things on my hit list:

“Pro rata” fees

Do you pay the person who painted your bach less because you only stay there four weeks a year? Or how about an Uber driver giving a partial refund because you only stayed out for 2 pints? Work is work. Reducing your fee to 0.8 because someone is only working 0.8 only works if you can also place them elsewhere on a 0.2. And that ain’t happening. The same goes for charging nine twelfths because someone is on a 9 month fixed-term contract. This assumes that this candidate is your sole property to place once the contract is over. Nonsense. Arguably more work goes in to finding a candidate willing to finish at Christmas time than hiring for a perm role, and yet we’re to work at a discount…

Boasting about screwing your PSA down to shitty terms

Common amongst internal recruitment managers. Once upon a time, you may have got an “OK” service at 12%. In this current market, if your agency suppliers are recruiting at 12%, I have a tip for you. Tear up your PSA, tell your suppliers that you’re now hiring at 18%, and watch the quality and volume of candidates grow and improve.

Working to shitty terms

I can’t just blame internal recruiters. It’s us agency-side who are still signing (and working to) these terms. I’ve done it myself. I know the term “asking for it” is now “problematic”, but all the time we accept that a major construction firm only pays us 12%, we are wearing a short-skirt and plunging neckline in front of a 1970s British Judge.

Taking no for an answer

Ah shit, another problematic term. The real job of a recruiter is to use our expertise to assist someone in hiring a skill-set that they couldn’t source themselves. And in this current market, it often means challenging the client and brief to the point of breaking. Now is the time to forcefully back our exceptional wild card candidate, and persuade, harangue, and cajole our client into meeting them. It’s for their own good.

Sharing your clients’ prejudices

We’ve done this for too long and never had the balls to call it. Now, with there being literally no candidates out there, we have an excuse to speak out. No we cannot find you a man/woman/caucasian/30 something/amputee. If you get one person who can nail the job, you’re doing pretty well currently. Now is not the time to discriminate because they’re Asian and you once ate a dodgy Chinese meal.

Working late from a mobile device

We’re all busy, and there’s money to be made, but tapping away on LinkedIn from your sofa does not make for a happy homelife. It also stops you sleeping, and sleep is your friend.

Temp to perm fees

Ross Clennett enjoys making this point. If you buy the house you are renting, the landlord will not discount the house by the rent you’ve paid over the past 5 years. He or she will charge you the market rate, because this is what he or she would get elsewhere. Do I need to explain this one further?

Treating candidates badly

If barbecue chit-chat is anything to go by, most recruiters get into the industry to piss off candidates. We’ve turned not calling people back into an art form. Sending CVs without permission is our foreplay and ignoring applications is the pop-shot. Once upon the time, this “plenty more where they came from” approach shamefully served us well. Our rimming services were reserved exclusively for clients. Well now the tides have turned, and it’s the candidates that are to be courted. As it should be.

Calling recruiters to talk about the performance of new hires and expecting us to do something about it

They don’t work for me and I’m not their manager. You’re paid to manage, you should give it a go. You might like it.

“Buying” business

I was listening to the always excellent Shamubeel Eaqub at the TradeMe Jobs breakfast last Friday, and this was my takeaway. In a market with no candidates, dropping our pants or spending excessively on acquiring new clients is a fools game. Now is the time to adjust our pricing, reduce our client base, and deliver a better service to fewer clients. Incidentally, if you missed Shamubeel talking for free, he’s also speaking at the RCSA Conference (tickets priced at $3,798+GST), so I’m sure I’ll see you there.

Have a great weekend, and feel free to add to the list in the comments.