Editor’s Corner

Over the last three decades, since before the days of Google, I have written hundreds of articles for major media. I am amused when I Google some of the things I have written and, lo and behold, find them rewritten verbatim under someone else’s name as the author. Oh well, they tell me that imitation is the sincerest form of flattery, and I suppose I’ll just have to put up with having my prose plagiarized.

So let’s have some fun and coin a new term and see how long it takes to start appearing elsewhere. Here’s the deal. Let’s combine the word “candidate” with what most of you do every time you tout one of your candidates to a potential hirer – an “infomercial.”

What do we get? A “candimercial.” Let me know when you first hear or read it somewhere else.

Does your fee schedule read: “Our service fees shall be equal to __ percent of the total estimated gross compensation to be earned by the candidate that you employ during such candidate’s first twelve (12) months of employment”?

You might want to rethink that time limit. Recently, a reader told us about a placement made in December with a base of $150K and a guaranteed bonus of an additional 20% of that amount. Billing on the $180K (salary + guaranteed bonus), they sent an invoice for $54,000. They were informed that the bonus amount could (or would) not be included as first 12 month income because bonuses were paid every January for all employees who had been with the company for six months or more. Therefore, the additional $30K was to be paid in month 13 – outside the contract agreement – and the client was only willing to pay a $45,000 fee.

I suppose a logical argument could be made that the bonus was being paid for work performed during the first 12 months and that the payment date was immaterial, but it would probably be more sensible to adjust the fee schedule to reflect this possibility.

When Wachovia bought A. G. Edwards a while back, the game of broker musical chairs began. Recruiters, sensing the unrest, pounced on the opportunity to steal disgruntled or uneasy brokers for their other-than-Wachovia clients. So what did Wachovia do? They offered a 10% fee to recruiters for bringing new hires to them rather than the industry norm of 6% of trailing firm production. Naturally, Wachovia’s competitors are in a snit over this tactic and vow to never again use recruiters who succumb to the siren song of 10%.

Do you approach potential clients with “hat in hand” or as peers? That’s the question asked of a heavy hitter by a relative rookie with a growing reputation for being “nice” but not particularly effective.

Our big biller answered: “I always approach potentials as peers. After all, I am attempting to forge a ‘partnership’ type relationship. While there is really no such thing as an ‘equal’ partnership, especially when one controls the money payout and the other wants some of it, I view the relationship as a mutual collaboration. He may indeed control the money and the access to it, but I know what he needs or wants and I control the access to the commodity/solution that will resolve his problem. I make more money than he does, I know more about the business that is the foundation of a mutually successful partnership arrangement, and there is always the subliminal threat that ‘He’s either with me or against me – a viable client or a rich and ready source of talent for his competitors.’ So why would I put myself in a subservient position from the get-go? If someone treats me like a pushover or a softy, I lose. If I come across as Steamroller Stan, we both lose. It all depends on your perception of the relationship from your viewpoint – and even the most successful relationships can go back and forth like a ping-pong game – but in the end, the best ones are those where the power dynamic is more like the pendulum on your grandfather’s clock. It will slowly swing back and forth, but never too far.”

By the time you read this, there will be a whole new dimension to The Fordyce Letter. Go to www.fordyceletter.com and see a whole new world of information access. The new website features access to several years of TFL archives, categorized and indexed for easy entrée to the problem you need solved or the information you need on a wide spectrum of topics. You will also find a daily blog and links to a broad selection of other resources vital to your practice and productivity. Initial response has been overwhelmingly positive, so if you haven’t logged on to the new site, do so today.

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And, finally, a classic response from reader Tim Richards of Metro Recruiters to one of those awful client attempts to foist their ignorantly inconsiderate “agency agreement” on him. Don’t know if it worked or not, but I couldn’t resist.

“It darkens my day to hear your answer from the enclosed email. After 23 years in the search business, and having made many long-term clients, I have concluded lately that on some issues we can be competitive and for some issues we can be partners – such is the way most business agreements go. Furthermore, in this marketplace where there is a shortage of high-quality candidates, I have additionally ascertained that on many issues you’re my customer and on other issues, I’m your customer. Perhaps somewhere down the line you may come to that conclusion as well.

“Of late, the monolithic idea of ‘we’re the company, we’ll only pay a reduced rate, expect a longer guarantee, we’ll pay the fee later than sooner, you have to sign an agreement and in it is to not accept employees who approach us that have decided to leave (which potentially costs us money), can fire us at any time without cause, and by the way, will essentially work for free without any form of guarantee to make the placement or exclusivity’ is certainly not win/win in my mind. No matter which way I look at it, this demeanor has an air of bullying, and has become pretty extinct in the past few years.

“I hope you watched the segment on 60 Minutes on November 11th titled ‘Millennials’ – about the emerging workforce … an exodus in your market of fresh talent has caused our business to grow. … While many firms like yours struggle to not only attract gifted employees, but to retain them, it stands to reason that you would want to embrace forging a long-term relationship with a firm such as ours. Conversely, I can confidently say that if I was in your position, I would be highly skeptical of a person or firm that would arbitrarily sign this agreement without forethought. After all, there has been, perhaps is now, and will be a time when you’re going to have to rely on a recruiting firm for timely, mission-critical results. Assuredly, and as you well know from the North Carolina project, if I tell you we’re going to give 100% to you, I’ll stand by my word.

“Accurately speaking, our clientele returns to us for not just our scale (creating quick turnaround time, saving them money in getting a position filled sooner) but, most fundamentally, our ever learning knowledge of their business, creating a much more discriminating hire. We also strive to keep our clients in the loop on where their search stands – if in fact we’ve accepted the assignment. Having owned many of these businesses with many employees, the single largest complaint from the clients is ‘I gave the guy a job order and I never heard back from him.’

“In your and my case, unfortunately you do not disagree agreeably and attempt common ground. In other words, it would have been easier trying to be a business adversary without being a business enemy.”

Paul Hawkinson is the editor of The Fordyce Letter, a publication for third-party recruiters that's part of ERE Media. He entered the personnel consulting industry in the late 1950's and began publishing for the industry in the 1970's. During his tenure as a practitioner, he personally billed over $5 million in both contingency and retainer assignments. He formed the Kimberly Organization and purchased The Fordyce Letter in 1980.