You Are Probably Underpaid

A problem exists in the Recruiting Industry. The problem is that not all recruiters feel that the fee they charge is justified. The truth is though; their fee should probably be more. There are lots of recruiters out there working less than 25% fees. This is what today’s post is about.

I mean, you write an order, you do the work, sometimes you did the work last year so the groundwork is done, then you send the invoice and you get paid. This I think is one of the biggest problems since most people involved, the client and lots of times the recruiter, think they are paying for the candidate instead of the process. If you leave out the process bit of it, it is easy to see why one may think that a 25% fee is too much.

I often talk to recruiters who tell me that they are amazed at the fees their clients agree to pay and that they have no confidence that these fees will continue. Then there are those recruiters who spend a good portion of their time negotiating and carefully choosing their searches, not just based on the fact the search is available, but rather because everyone involved appreciated the collective effort of finding the right person and the cost is secondary.

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Paul Hawkinson has an article that appeared in the Fordyce Letter a few years ago and it’s a good one. It’s called Why Recruiters Are Worth What They Charge. If you read it and understand it to the point that you can talk about it convincingly, You can incorporate it into your discussions with potential and existing clients.

You know sometimes, there is nothing quite as nice as making a decision half way through a sales pitch that you are not going to take the search even though you know you are going to get the option to do the search.

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1 Comment on “You Are Probably Underpaid

  1. “the client and lots of times the recruiter, think they are paying for the candidate instead of the process”

    If you’re contingency, you’re not getting paid for a process. Of course, we all understand what you mean. If you’re retainer, then yes, literally, you’re getting paid for the work, and even get paid a fair lumo even if ultimately noone sis hired…

    But yes, that previous body of work, previous research et al, is often not recognized by price buyers.

    I think an important point is that if a high-performing, newly-recruited employee contributes about 5 times their worth in salary to the empoyer, and our fee is a third of salary (oh stop it with the 20% people), then the fee is a fifteenth of the employee’s 1st year value to the company.

    That doesn’t sound so expensive, does it?

    PS: Jason, I absoluetly love this new resource! Congratulations on the simplicity and content-focus of the site– it doesnt need to be another career hub to satisfy all…

    And as a subscriber, I’m jealous that newbies get back issues for free. But that’s just the adolescent side of me…

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