Cut Your Fee By Two-Thirds? That’s Bad Business

Dear Barb:

I have an established client who has been my top account for the past five years. They have been purchased and now I’ve been asked to reduce my fee from 30% to 10%. I don’t want to lose this account, but I also don’t want to reduce my fees by 20%. My client doesn’t want to lose us as a resource and hopes our fees can be increased once the new parent company sees the caliber of candidates I present. What would you do?

Frank N.

Toronto, Canada

Barb Responds

Dear Frank:

You have already lost your account – they were sold.

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The first thing I want to address is the accurate reduction of fee they are requesting. If you currently charge 30% and they are asking for you to agree to 10% that is not a 20% reduction in fee, it is a 662/3 % reduction in your fee. Thirty percent represents 100% of your current fees.

There is no guarantee this new owner will ever raise your fee. You need to ask yourself why you would significantly reduce the value of your services and talent you represent. Why would you give this new company a lower rate than you are charging your best clients?

My advice would be to explain to your current contact at this company that you can’t provide your services at such a deeply discounted rate. It’s not a good business decision or fair to the other clients you represent. You then market your services to clients who will realize the value of your services and replace the business you were getting from this client.

Barbara J. Bruno, CPC, CTS

Barb Bruno, CPC, CTS, is one of the most trusted experts, speakers, and trainers in the Staffing and Recruiting Professions. If you want to receive FREE training articles from Barb, sign up for her NO BS Newsletter! Barb has spent the last twenty years focused on helping Owners, Managers, and Recruiters increase their sales, profits, and income.

Her Top Producer Tutor web-based training program jumps-starts new hires and takes experienced recruiters to their next level of production. Barb's cutting-edge program, Happy Candidates, provides you with a Customized Career Portal in less than 10 minutes. Happy Candidates allows you to help the 95% of candidates you don?t place and eliminates the greatest time waster in your business.

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2 Comments on “Cut Your Fee By Two-Thirds? That’s Bad Business

  1. I have never never been a fan in this business of the take it or leave it attitude. The majority of the time employers will leave it. Things have changed over the years and employers have entirely too many options available at their disposal. And don’t think for a minute loyalty exists because it doesn’t. Picking up good JO’s in this business is tough and when you land a client that provides ongoing business you do everything in your power to keep that client. Bad JO’s or a lack thereof is the primary reason people leave the business. Work with your client to keep the account. 10% truthfully is a disgrace and probably wouldn’t be worth recruiting for unless- A.) they provide you an abundance of job orders and B.)The job orders a relatively easy to fill. Try to find a happy medium and yes no guarantees your client will stick with you. After 14 years in this business I have yet to have had a client stay with me long term. Things just change so you always need to be marketing and keeping new JO’s coming in the door.

    Good Luck

  2. Fist of all you have to consider that you are doing the same work for way less money. Also, I have had many clients tell me that if I lower my fee and do a good job then next time they raise it back up. That has never happened.

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