The Reality of ?Take It or Leave It? Contracts

As the economy continues to bounce along at a less than robust pace, Search, Placement and Staffing Firms are increasingly confronted by clients presenting one-sided, arbitrary agreements with a “take it or leave it” attitude. These “contracts” generally have provisions that require the heavy discounting of fees and bill rates, unrealistic guarantees and refund policies, and restrictions on “how” to interface with their organizations. In most instances, these contracts are non-exclusive and focus on a “quantity” approach to meeting the company’s needs.Based on the volume of calls I receive on this topic from frustrated practitioners venting their emotions, it is clear that most of the “rank and file” of our industry are both ineffective and potentially self-destructive when dealing with “take it or leave it contracts.” One of the reasons for this may be their lack of understanding regarding the “reality” of these contracts, specifically, “why” their clients persist in utilizing this approach.The “reality” as to “why” clients persist in utilizing “take it or leave it contracts” is simply that they CAN! And they “can” because of two primary reasons:

  1. By and large, many clients see very little, if any, qualitative difference between the services provided by most staffing firms. Therefore, they place little value on building or maintaining these relationships. They view the services as mere commodities.
  2. Staffing firms as well as individual practitioners, desperate for business, give in to this demand by their clients, thereby reinforcing the “take it or leave it” approach.

If you take a moment to place yourself in the “shoes” of a typical client, particularly during these past few years of economic uncertainty, you may better understand their view of “reality.” Daily, they are inundated by calls from desperate practitioners who are trying to develop business. Unfortunately, many of these calls are from poorly trained “rookies” or, worse yet, experienced individuals who had their glory years during the late 90s, feeding off the then plentiful “low hanging fruit.” Since neither of these groups knows any better, many of their calls can be characterized as “same old, same old,” long on promises and short on delivery. As a result, clients are “gun shy.” Consequently, they are attempting to control the confusion, and centralize processes in order to identify the few gems that may be present in the available talent pool.As flawed as this logic may be, every time a practitioner agrees to work within the terms of a “take it or leave it contract,” they are compromising their positioning and squandering their resources.Remember: “Take it or leave it contracts” are designed to control mediocrity, not to foster excellence.However, there is an alternative. Early in their careers, achievement oriented, top performers learn the value of taking a focused resource approach to delivering their services. They would rather invest whatever time is necessary to identify and develop clients who truly understand the benefits of building long-term relationships with recruiters and staffing firms than succumb to the lure of easy to secure, yet compromised business. In order for this to become their “reality,” these top performers have developed the processes and resources to clearly separate themselves on a qualitative basis. They have learned the value of just saying “no” to the “take it or leave it contracts.” By this very act they separate themselves from the line of mediocrity that is so pervasive within our industry.In our next article we will take a look at the specific strategies and techniques used by these top performers when they encounter the “take it or leave it contracts.” Meanwhile, consider the “reality” of why your clients are utilizing these “contracts,” and what you may be doing, or failing to do that reinforces their approach to working with you.As always, your calls and e-mails are most welcome!

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Recipient of the Harold B. Nelson Award, Terry Petra is one of our industry's leading trainers and consultants. He has successfully conducted in-house programs for hundreds of search, placement, temporary staffing firms and industry groups across the U.S., Canada, Mexico, Australia, New Zealand, Russia, England, and South Africa. To learn more about his training products and services, including PETRA ON CALL, and BUSINESS VALUATION, visit www.tpetra.com. Terry can be reached at (651) 738-8561 or click to email him.

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