Executive Recruiting Fees
Recruiting Fees
Leonard Syriaque
What justifies a 25% recruiter’s fee? Executive recruiting has come a long way from the cold calls. The Internet has redefined the way recruiters seek out candidates. Online job boards, social networking and blogs have made employment recruiting efficient. With all these things considered why do executive recruiters still command 20 -30% for recruiting fees?
I have been a recruiter for over ten years. I have done it all. I’ve been an executive recruiter making 100 cold calls a day from overused and often dated company directories. I have had the opportunity to work as a recruiting consultant and I have been employed as a corporate recruiter. I have seen the evolution of recruiting go from at the art of the hustle to post and pray.
On an average day I get about 10 calls and emails from recruiters promoting their extra-ordinary services to me. I get pitches like “I am working with an excellent candidate who is currently interested in pursuing an opportunity with your organization” or “ We have a extensive database of passive candidates”. Once I give them the job order and sign off on their 25% contingence contract, that’s when the comedy begins. What I get from these expert recruiters are resumes from Monster.com, Hotjobs and Careerbuilder. Where is the skill in that? You can’t possibly justify getting 25% recruiting fee just by posting a job an on recruiting website.
I am not bashing the recruiting industry; I am just questioning the approach. You may say that recruiters provide a specialized service but that’s debatable. What is the difference between Korn Ferry working or your typical ABC Recruiting Firm? The name recognition, gives a customer a sense of assurance that past success will guarantee future success. That‘s not always true. Firms like Korn Ferry usually work on retainer; you pay a premium for the name not the service. I have had varied experiences with National Recruiting Firms and local firms, who command the same fee and produce the same product. I look at executive recruiters as a supplementary to my work. I don’t put much faith into what they say, they are sales people and obviously their job is to sell you on the candidate.
On any given day any recruiter can strike gold with the right contact. But, you are only as good as your last placement. So why should I pay you a 25% fee for a position you filled for other company. There are over 13 thousand active recruiting agencies competing for a shrinking market employment market. I am not swayed by quick sales pitches, I want results and I am not going to pay 25%.
I am more am incline to work with 10 different firms on a contingence flat fee basis, then one firm on a retainer or 25- 30 % fee. The odds are greater that you will find a better pool of candidates and it also generates a buzz amongst candidates about your company. An experience corporate recruiter knows they have the upper hand when it comes to negotiating fees. There is always going to be someone out there willing to work for less.
In turn sophisticated job seeker has no need for an executive recruiter. In fact they can do better by themselves sites such as Indeed.com make it easier for anyone to find the most current opportunities in their field. I see online recruiting moving more in the direction of the ebay model. The current state of this economy will set the scene for the next stage of online recruiting.
Martin, 
Dave Smith and one other person are discussing. 
The Patient Protector 8:24 pm on February 3, 2009 Permalink |
Mr. Syriaque,
Thank you for the advise. I am currently conducting research into starting my own medical recruitment firm.
I am a Physician Assistant with 24 years of practice experience. My focus will be on national P.A. recruitment (and possibly staffing). I was searching for info. on professional recruitment fees when I found your blog.
It was a relief to read your comments about “flat fee” contingency agreements because that was in-tune with my plan. If I could get my foot in the door with a (low) flat fee and air of professional experience, I would have a chance to establish myself in this niche market.
If you have any more pearls of wisdom to share, I would greatly appreciate them.
Respectfully,
Mike Barber, PA-C
Dave Smith 3:42 pm on June 16, 2009 Permalink |
Mr. Syriaque,
It’s a shame that we have such a bad rep as Executive Recruiters. I am sorry that your experience has been so poor with recruiting firms. We charge 30% on almost everything we do and I have had companies tell us we should charge lower fees for our service because individuals we bring can be found easily on the web.
Martin 6:41 pm on October 13, 2009 Permalink |
I’m surprised ES firms can still get away with charging 25%-30% in this economy. I would expect there to be some pressure on fees. Is that not the case?
Syriaque Leonard 12:13 am on October 16, 2009 Permalink
With the down economy and no relief in sight , I believe we all see a change in the ES firms do business.