Back to Basics from the Desk of the Contingency Employment Agent

Aug 1, 2007

Here it is July 2007, the halfway point of the year, and my business instinct tells me a shift needs to occur for my contingency staffing and placement practice.

For 22 years I have been placing business professionals in companies, and for 22 years I have been getting paid after I make the deal. Some days I feel like the most powerful person on the planet, but other days I feel like one of many mice on a wheel aimlessly chasing an illusion of cheese.

Recently, I find myself resenting some of my clients, resenting staff that cannot produce fast enough, resenting that 80% of my income is based on a contingency fee, and resenting the constant chase for the illusive cheese.

Why the resentment? Because over the past two quarters, my contingency placement business has been facing some significant challenges. The type of assignments we had been receiving – and filling with ease – are slowly disintegrating. Today, the types of assignments we are receiving are much harder to fill because of tougher specifications, and the fact that umpteen agencies are working on the same assignments. In a market like this, my experience in the contingency placement business make me feel like we are all a bunch of mice in a cage running on a wheel – and getting nowhere. With a void of candidates facing everyone, I am seriously reevaluating my business and making those necessary shifts.

As the business leader in my company, I ask myself: “What needs to shift?” “What do I want?” “What will it take for me to love what I do every day, or almost every day?” “What will make us more profitable?” “What will make our work more fun?” “What business am I really in? Is it retained search? Contingency placement? Employment agency?”

As I ask these questions and feverishly search for answers, I suddenly hear a voice from the past. When I was 22 years old and just starting out in the placement agency business, my first boss said to me, “Margaret, it is important that you understand our business model. We don’t fill job orders here; we place candidates. And THAT philosophy is at the center of everything we do. Don’t forget that.”

When I started my business, I consciously made a choice to be different from other placement agencies. Alliance’s mission statement would reflect a service philosophy to meet our clients’ needs in the best way possible, period. Since September 1993, there have been many times I have seen, experienced, and felt the huge positive impact of that choice and there have been many times that I have seen, felt, and experienced the sober negative impact of that choice.

At this point, 80% of the income generated from my company’s administrative and business services placements comes from contingency fees. While that is pretty normal in that line of business, the issue is that we have become so client-centric that we operate more like a retained search firm, with in-depth processes, high-quality send-outs, personality assessments, and behavioral inter-viewing; each client who inter-views a candidate from Alliance experiences the red carpet treatment.

This model has been successful in regard to account penetration and referral business. It has also landed us some big accounts with multiple departments and multiple openings. But it has required our focus to be very narrow in the sense that we are here only to fill client needs, as opposed to candidate needs. Candidates who didn’t fit immediate needs were put on the back burner, stored in the database for a potential future.

We have not dedicated ourselves fully to finding employment for these high-quality candidates. We haven’t dedicated sufficient time, attention, concentration, and focus on running candidate MPC campaigns. While there have been weekly email campaigns sent out featuring our “best of the best” candidates, there has not been a disciplined effort to represent a candidate and market that candidate to a specific set of companies that might have a need. The entire focus of my team has been to fill our clients’ jobs, and it has been that way as long as I can remember.

However, given today’s market shift and talent scarcity, I sense that my business model and my attitude need to be adjusted. Many of my business colleagues agree that not only is the cheese down that tunnel a bit moldy, but there are also too many mice trying to nibble on the same bit of it.

Don’t get me wrong: we are making money. Yet we are working 10 times harder to make the same amount of money we made last year. I am spending much more on recruiting resources than I did last year. The time-to-fill metric is creeping up. And we are dealing with too many distractions such as goofy, unrealistic job orders pounding on our door. In some circumstances, good clients are becoming bad clients because they are not managing their open job requisitions strategically, they are waiting too long before listing their jobs, and then they are so desperate to fill jobs with the right people that they are machine-gunning their orders out to anyone and everyone who will work for them: filling the maze with mice running for the cheese.

Much as a car wreck stops traffic, the other day I had a pretty significant interruption of the maze running and cheese chasing. My 16-year-old son, James, who is interning for us this summer, was working hard to “find” candidates using some of our new search technology. After a day and a half of researching he said, “Mom, why are we working so hard to fill jobs that everyone else is trying to fill when there does not seem to be many people to choose from, yet there are other higher-level candidates out there who we could be representing like a talent agent? Why aren’t you doing that, Mom?”

My immediate reaction was, “Nice point, Millennium child, your impatience is getting the best of you, but we need to fill these orders, so just get back to work and stay focused.”

And then it hit me. After all these years of running things my way, I forgot what my first boss taught me. I forgot about the basics. I forgot how I built that book of business in the first place. I was humbled to realize that it’s time to get back to the basics of my rookie training.

Back to Basics

In hindsight, the way I made it to a six-figure income after just three years in the business was really pretty simple. Reaching the Pinnacle Society resulted from more of the same, over and over again. I used the system that my mentors taught me and it worked: I made money, I got people jobs, my clients were happy, and I was in total control of my destiny.

The system required taking a really great candidate – some-one with whom I had forged a relationship, knew had market-able skills, knew would be a key player wherever they would go – and then getting on the phone and calling anyone who might need this person. I called similar industries, similar companies. I called old job orders. I called newspaper ads. I did whatever I had to do to market this person, like a talent agent would market a movie star. Additionally, I did that for three to five people daily. Somewhat how Ari markets Vince in the HBO series Entourage.

As I engage the old memory bank, my head floods with the way we used to do this job. From 1983 to 1987, my first employer had 40-something employment agents. We were all paid from a draw on commission and a 16% payout of each side of the deal. The house provided the resource budget to find candidates. The average income per employment agent was $85,000. Those earn-ing less than $65,000 were considered low producers.

To maintain candidate owner-ship, we agents had to have candidates come to the office and work side by side with us until we placed them in jobs (we called them “repeats”). These were candidates we were committed to placing who were also committed to us placing them. They came to the office every day. They took turns sitting at our desks while we would call through the Rolodex and phone book, and crisscross directory or job ads for them. With 40 or so agents doing this, it seemed like there was always somewhere to send my “repeats.” While I was on the phone looking for Mary, one of my coworkers got a send-out for Suzie, and vice versa.

Following this effective and slightly crazy system, I was able to close an average of 10 placements per month and fill 10 job orders per month. I did this in 43 hours per week. There was not time to match candidates to open orders that were not obvious during the day, so I did that at night. There was not time to do quality-assurance calls during the day, so I did that at night. My “admin” work was done at night, while my people work was done during the day. I never used email because I didn’t have it. I didn’t use the boards because the Internet was not a “tool of the trade” yet. I did however use the phone, nonstop.

I still remember having a lunch break with one of the partners of the agency; our average lunch hour was 30 minutes. She was talking to us about how to get back on track when things did not seem to be working. She said, “If you ever get to the point that deals are not closing, or you’re spinning your wheels, and are not getting job orders or send-outs, then get up and stretch, or go outside. Then come back to your desk and wipe everything off, except your telephone and your Rolodex or prospecting resource. Then pick one candidate you think is placeable – someone who is highly skilled, marketable, hungry to work with you and will do anything and go anywhere you ask, and is flexible about money – and then call everyone you can about her or him until you earn a send-out. Within two days things will pick up, I promise.”

That model worked for me back then, and I believe some version of it could work for my company now in a market with significantly more jobs than there are talented people. To effectively implement this new/old philosophy into my company, I want to review what worked and what didn’t back then and decide what can be revamped, tweaked, or improved for today. I plan to mine any gold nuggets of wisdom that I can from previous employers and my early days in the business as an effort to set us mice on a more fruitful path.

It is crystal clear to me that the conscious choice I made in 1993 regarding a client-centric philosophy has served its purpose and may continue to serve a purpose in a new retained search venture. But it is no longer sufficient (for me) in my contingency search business. It is time for a new conscious choice that applies to today’s market and which honors and utilizes the lessons learned from yesterday as well as the innovations of today.

One of the shifts I will be making in my contingency placement business is to become candidate-centric. Other changes I see on the horizon will include entering niche markets and adding a retained team in an effort to completely separate my contingency and retained businesses, as well as my staff’s focus. We will offer clients the level of service they are willing to pay for. If a client is listing a job with more than my company, it must be a job for which we already have the candidates in the house or one for which we can easily locate quality candidates. No more mice tunneling for cheese.

In implementing a candidate-centric approach to running the contingency placement side of my business, I plan to include some practices borrowed from my first employer as well as things I’ve learned over the years. Another idea is to offer a dedicated marketing campaign for highly qualified working (and hungry to make a change) candidates. We will market these candidates using email campaigns, telephone campaigns, and specific invite-only career fairs. I think if it is done right, candidates might pay for it. Look at how the coaching business has taken off: People of all levels are paying for advice.

Additionally, or as part of the campaign, we can create a candidate certification using our assessment program to certify that a candidate is in the top of the range among the bench-marked best for a specific role, level of accountability, and/or industry.

Another change I will make, as the leader of my organization, is that I personally will work on only retained and consulting projects to leverage my time, effort, talent, and wisdom.

If there really is a skilled labor shortage – and from all indicators there is – we will all need to make some adjustments. Some of us will make subtle adjustments and some of us will make significant adjustments. I know I am up for the game.

Margaret Graziano, CPC, CTS, and mother of three, has been a top producer in the staffing and recruiting industry for the past 20 years and has owned her own firm since 1991. She prides herself on client retention, and making the right hires. She has earned over $5 million in personal “desk production” income and has placed over 2,000 candidates in direct-hire positions. With the competitive business world and the war on talent in full force, Margaret’s company, Alliance HR Network, has ventured into new realms of talent acquisition, organizational development, and human capital consulting services, thus diversifying Alliance’s revenue streams and gaining new and exciting talent acquisition and assessment consulting opportunities. Margaret’s email is mgraziano@alliance, and her phone number is (847) 690-0077. The strategic planning forms are listed under a Strategic Planning Down-loads section at http:// www. /employers /industry_training.asp.

Get articles like this
in your inbox
Subscribe to our mailing list and get interesting articles about talent acquisition emailed weekly!