How Several Practitioners Reply To “We Need A Lower Fee!”

  • “I understand that you would like to solve this problem as inexpensively as possible. No one likes to overpay. But our fees are based upon an analysis of our expenses along with a reasonable profit. I seriously doubt that I can talk my boss into accepting this assignment with no profit, so I must ask you which of the elements of a complete search would you not want us to perform?”
  • “While there may be some area in which we can effect a compromise, it almost always results in a less than satisfactory result. Just as you would want the best available team to perform a family member’s open heart surgery, I’m sure you’d be hard-pressed to tell us which of our crucial functions you can do without.”
  • “Our fees are based on the proposition that your search will be performed by a seasoned and successful veteran rather than a rookie, that the full resources of our research department will be brought to bear on your problem and that our net will be cast to cover the entire universe of potential candidates. One or more of these components must, by necessity, be scaled back or ignored if the fee is reduced as you ask. This, I’m afraid will compromise the final result in a way we can’t condone, so if your demand for fee reduction is firm, we’ll have to bow out and recommend that you seek that low bidder you’re looking for.”

This last scenario indicates that you care, but not enough to lower your standards. That’s a powerful negotiation tool.Two more approaches to the “Why won’t you lower your fee” request is:

  • “It’s been a very long time since someone has even asked us to negotiate a fee. That issue has been laid to rest for some years now when the hirers of the country negotiated for and agreed with the personnel consulting profession that the established standard fee for our services should justifiably be 30% (Or whatever you wish to make it.) Survey after reliable survey indicates that 30% is a fair amount and that employers who ask for, and get lower fees, end up with sub-standard results.”
  • “I’m not at liberty to even discuss fee reduction on a contingency search, but if you want us to handle it for 25%, we’ll be happy to do so under an exclusive retained agreement with expense reimbursement factored in. If you wish, I’ll start preparing the retainer agreement right now.”

From an old pro who swears this works more often than not:

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  • I suppose I don’t object to your asking me for a dramatic discount in the fees we normally charge, but if you’ll bear with me for a moment, I’d like to think out loud about your proposal.The company for whom I work has a sterling reputation for ethics and for success, both with employers and with candidates. We have never compromised on the quality of the services we provide. I’m proud of that and that’s why I feel I’m privileged to be with the best.I’ve spent many years learning my profession. I’m very good at what I do and the greater percentage of my business comes from repeat clients who obviously feel the same way about my work as I do.Our fee schedule is based upon the same factors as everyone else’s. They are similar because everyone in our profession knows that our charges are fair, competitive and reflective of the actual costs of doing business. Those who have cut their fees in the past just aren’t around today.I didn’t spend years honing my expertise, gathering vital contacts and building my reputation to agree to work for Bargain Barn prices just because someone was insulting enough to ask. As a matter of fact, I’m positive that I couldn’t effectively work with a company whose sole criterion was price rather than value and quality of service.Shall we proceed?

The use of this script takes practice, confidence and a bit of chutzpah but, for those who are able to master it, it often works to turn lowball wheeler-dealers into full fee clients.

Paul Hawkinson is the editor of The Fordyce Letter, a publication for third-party recruiters that's part of ERE Media. He entered the personnel consulting industry in the late 1950's and began publishing for the industry in the 1970's. During his tenure as a practitioner, he personally billed over $5 million in both contingency and retainer assignments. He formed the Kimberly Organization and purchased The Fordyce Letter in 1980.

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