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Recruiting: Setting the Best Fee

Aug 5, 2008
I prefer to discuss my contingency fee for delivering a great candidate when I've located the Decision Maker and am about two-thirds of the way through completing a job order form. My client has done 90% of the talking up until this point and provided the exact information I need before deciding what my fee will be for this search.

While my client has been talking I've been listening closely and taking notes.

The beauty of working as a Recruiter lies in our ability to design how we choose to work. I'm happy to explain how I determine my fee but respect the fact there are dozens of ways to set a fee. Find what works best for you by experimenting. Don't charge a fee you would not pay.

Many recruiters adhere to setting their fee based on the traditional mindset of a percentage of a candidate's first years' salary, say 25%. I've always felt that 'one size fits all' mentality was limiting. Personally, I set my fee after considering a number of factors. Sometimes I've been high and sometimes I've been low. Oh well. I don't care because I make placements consistently and my open-mindedness keeps my clients loyal and attracts new clients like bears to honey.

First, I don't take searches I don't want to work on or won't be able to fill. "Guilt be gone", is my motto. If I don't respect a companies' philosophy or the way they treat employees I won't help find them new employees to abuse.

It's important to me that my values match the values of my clients. I don't preach to anyone. I have developed several succicenct ways to convey to an employer that I'd prefer to back away from their search. If that fails I tell them nicely we are not compatible as my search methods typically surface candidates with long-term goals that do not match this employers' goals. I advise them using me would not be an efficient use of their resources.

I'm not interested in wasting anyone's time especially my own. Many of the companies I've chosen not to do business with are exceptionally successful in terms of profit. Again, I don't care. It's not in my best interest to compromise my integrity when I can make buckets of money, and be happy making placements with companies I'd love to see succeed even more.

Here are some of the considerations that enter into my fee decision. What's their turnover? What's the atmosphere like...are employees excited to come to work? Is the employer fair minded? Do they promote from within? Do they help their employees succeed with more training? Is their compensation program competitive? Are they open to employee input? And high on my list, will they work in a cooperative and respectful way with me?

Can my client make a hiring decision fast? The longer their decision making process the more likely deals can fall apart. I want to work with decision makers. I dislike bureaucracies and avoid clients steeped in bureaucrats. When I've determined I want the search I set my fee.

As an Executive Recruiter I offer value. I'm picky about the searches I take yet I fill them consistently. I delight my clients by presenting exceptional candidates. I've never required a client sign an agreement that they will work with me exclusively. I always send a note as to what we agreed the fee will be and when it will be paid. (All fees are paid within 10 days of the candidate's start date.) I've always received payment.

My fees range from $4,500. to $60,000. Experience has taught me the value of my time and energy. Once I've decided my fee I stick to it. If a client wants to negotiate my fee to a lower amount I talk about the value of hiring a candidate that contributes above and beyond what they expect. Typically, they wouldn't be willing to hire a candidate with 20% fewer competencies they require if I agreed to a lower rate. They don't want an 80% effort on my part. They want a great candidate, fast.

Know the fee ranges in your industry. Know what constitutes different levels of expertise. Know yourself and what motivates you to deliver the candidate your client desperately wants. Set your fee based on your value and the value your client puts on the person that will make a difference in their organization.

My questions, demeanor, and thought process demonstrate my ability. If the client is unsure about wanting to pay my fee I wish them well and move on. I respect managers have budgets that may not include expenditures for my service. When I develop a client who is willing and ready to hire a great candidate and pay my fee I knock myself out getting an interview set up within 72 hours. I deliver value by providing exceptional candidates fast. That's what makes placements happen.
About the Author
Kimberly Schenk has over 25 years experience in business. For 17 of those years she has been an Executive Recruiter and Trainer. She shares her success secrets with Recruiters in her eBook,
Top Recruiter Secrets
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