Let’s face it. You can’t accept every search. You can’t search and supervise at the same time either. And you certainly can’t afford to have search specialists on your payroll, hoping the right job order comes along. Placement doesn’t work like that.
The result is that you take more JO’s than you can bill — “backup JO’s” just in case you find someone. But you don’t. Some other recruiter does.
Enter the freelancer — a “consultant’s consultant” who does “brokered” searches on a project (one-time) basis.
Freelancers are low-overhead, low-profile recruiters who usually work out of their homes. They don’t market their services to employers, and don’t solicit job orders. Instead, they depend on visible brokers like you to refer search business. This allows them the flexibility to recruit on their own schedule. In fact, many are employed management and technical types who moonlight after hours.
So freelancers aren’t:
- Independent contractors (illegally) in your office.
- Competitors “working splits.”
They’re just solo searchers who recruit for brokers. As the broker, you:
- Negotiate the terms and confirm the assignment with the employer.
- Negotiate the freelancer’s compensation.
- Establish a timetable with the freelancer for completion of parts of the search.
- Retain all employer contact (and therefore control).
- Free yourself from the daily frustrations of supervising human beings.
- Pay for the search on a COD basis.
Most importantly, you
7. Leverage your business with no cash outlay at all!
Brokering search business is nothing new. Superstar searchers have been brokering to freelancers for years. They just haven’t talked about it much. Competition, you know — they want their freelancers to themselves.
So let’s look at the six step way to bill big bucks by brokering backup business.
1. Contact Employers Who Gave You Unfilled Job Orders
They’re your best resources for determining: 1) Where you’ve been losing business, and; 2) Who’s been getting it.
The crisis nature of search doesn’t give you enough time to find freelancers when you need them. By that time, you’ve already received a hot job order.
Now’s the time to:
- Go through your unfilled job orders for the past six months.
- Look for similar job classifications and industries.
- Contact the employers and find out:
- The name and phone number of each recruiter who filled the job orders (if any).
- Whether the employer was satisfied with the recruiter.
- Whether the employer would like you to recruit for any current openings.
These are natural questions to ask. In fact, they should have been asked before. You’re not a stranger to the employer, so why act like one?
Then review Chapter 19 in The Placement Strategy Handbook entitled “Writing the Perfect Job Order.” It gives you a systematic way to get a complete JO the first time through.
2. Use Your Network
Even if you don’t belong to a formal network or franchise system, you can expand your contacts greatly through:
- Calling other recruiters in your local online directories. (Freelancers aren’t in there, but you may be able to obtain leads on ex-employees, candidates who recruit in the moonlight, or freelancers who aren’t being used.)
- Calling members of your local trade association. (The directories are readily available and may even include specialties.)
- Calling current clients and asking who else they use. (This is a variation of the approach we discussed in Item 1.)
With an average desk turnover in our industry of over 75% per year, you can see why calling is the only practical way to find full-time freelancers. And it’s the only way to find moonlighters who haven’t passed through your door.
3. Pre-Screen the Freelancer Thoroughly
Few recruiters screen freelancers before they use them. “Post-screening” usually occurs — after the liability has arisen. Thorough pre-screening is imperative, since the freelancer’s integrity and competence are even more important than a successful search.
- You’re making a commitment to the employer based upon the freelancer’s estimates of time and candidate qualifications.
- His representations about candidates legally become your representations to the employer. His representations to candidates about the employer and job legally become your representations to them.
- He’ll have to resist the temptation to contact the employer directly.
- He’ll have to honor your proprietary contact information on employers and candidates, even though he may obtain it during the search.
- You may need to rely on him for a replacement if the candidate falls off.
How do you screen these folks? Here are a dozen questions to ask before you even discuss an arrangement:
- What is your educational background?
- What jobs did you have before becoming a recruiter?
- How long have you been a recruiter?
- Who were you with When?
- What percentage of time do you spend in various disciplines? Which ones?
- What percentage of time do you spend in various industries? Which ones?
- What is the average annual starting salary of the candidates you place?
- How many placements did you make last year?
- Are you a member of any recruiter associations? Which ones?
- What are the names and phone numbers of five recruiters I can call for a reference?
- What are the names and phone numbers of five hiring authorities I can call for a reference?
- What are the names and phone numbers of five candidates I can call for a reference?
If you’re hesitant about asking these questions, you’re not alone. As Roger Golde pointed out in Can You Be Sure of Your Experts?:
Fear can be a strong deterrent to seeking out experts. In some cases, part of our fear is showing our ignorance and appearing stupid.
We may feel that it is easier to live with vague apprehensions about a fuzzy problem. Such fear arises particularly when the use of an expert involves exposing embarrassing circumstances.
We see an advanced form of placement paranoia when recruiters meet. Those who are closest in specialties or closest geographically are the most apprehensive about discussing their concerns. But the best freelancers are those in similar areas of search and local enough to maximize communication.
Golde observed why:
Difficulties of communication are sure to arise. There will be problems of semantics and professional jargon. There will be misunderstandings owing to the complexity of the situation, your unfamiliarity with the problems involved, and your expert’s lack of knowledge about you.
It is much harder to maintain objectivity when we, ourselves, are involved. Yet we must try to choose an expert and appraise him objectively.
You’re only as good as your last placement. You’re a necessary evil — a last resort. They’re not “clients,” they’re sophisticated employers who look out for themselves every time.
Fear of being a broke broker should petrify you. If you’re not petrified, just look again at those unfilled backup JO’s.
4. Clearly Define the Relationship In Writing
Almost 85% of the split-fee (including broker-freelancer) disputes we see arise from improper documentation of the terms of the search. Among that 85% are:
- No written confirmation at all. (45%)
- A confirming letter from one of the recruiters referencing a “split” with no percentage mentioned. (20%)
- A confirming letter from one of the recruiters referencing a percentage with no other specific terms. (20%)
- A letter or agreement signed by both recruiters referencing a percentage and who’ll bill the employer. (15%)
All of these are a recruiter’s requiem. Even the last one fails to require:
- That the freelancer will notify you immediately regarding the details about each qualified candidate.
- That the freelancer will forward contact and background information on each qualified candidate no later than the business day after the candidate is recruited.
- That the freelancer will not contact the hiring employer directly except when accompanied (in person or by phone) by you. Your prior consent in writing is fine, too.
- That you will be solely responsible for billing, collection and disbursement of the fee.
- That you will accept no deviation from the agreement. The most effective (and enforceable) words we’ve found are:
Any violation of the terms of this Agreement by (name of freelancer) shall be deemed a material breach of contract, and shall give (name of your business) the right to:
- Continue the search directly.
- Use another freelancer or associate for the search.
- Retain the full placement fee and merely reimburse (name of freelancer) for actual and reasonable costs incurred upon receipt of an itemized statement therefor.
(You can also specify an hourly rate, and reimburse him for his time. It may sound tough, but it’s perfectly legal and necessary.)
These and other considerations are covered in Chapter 55 of The Placement Strategy Handbook entitled “Networking Not Working? Get Working!”
That any disputes arising over the fee collection (only) shall be submitted to arbitration through the local office of American Arbitration Association, and be arbitrated pursuant to its current Commercial Arbitration Rules.
The paragraph suggested by the AAA (Rule 7) is:
Any controversy or claim arising out of or relating to this contract, or any breach thereof, shall be settled in accordance with the rules of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof.
For more on this, review Chapter 83 in Placement Management entitled “Arbitration and How it Works.”
5. Act Like A Broker
Successful brokers are extremely disciplined in their relations with freelancers. They must supervise the search and control the dialogue. This discipline is imperative, since the typical freelancer tends to be sales rather than business oriented. You can see why: Most have failed at running their own businesses. Others are full-time salaried employees, recruiting to augment their income.
You also have to constantly update the freelancer on:
- Changes in candidate qualifications desired.
- Changes in job specifications.
- Changes in benefits, working conditions, etc.
- Changes in the search (feedback regarding pending candidates, other recruiting attempts, possible employee transfers, etc.).
- Changes in management, mergers, acquisitions, or other employer developments that could affect the search.
You must resign yourself [to] continued expediting of your [search]. The least objectionable way to handle such expediting is to extract from your [freelancer] at the beginning some sort of time schedule (including some periodic meetings which will tend to serve as deadlines). When does he expect to take various actions, and when are various documents [background sheets, resumes, etc.] likely to be ready?
You should have no qualms about calling up your [freelancer] after each given date to find out whether the schedule is being met. You are not entitled to assume that it is unless you hear otherwise.
A [freelancer] deals with many clients at a time, and new priorities are always developing for him… [Y]ou must continually check on what your [freelancer] knows of the [search], and what he’s doing about it.
You must listen well, too. The freelancer is on the hiring line, and should know how to source the best candidates. Since he’s two phones removed from the employer, you’ll need to watch him though. His job is to recruit, not to protect you or your “client.”
Here’s the paragraph we suggest to remind him:
(Name of freelancer) agrees to act all times in an attentive, ethical and responsible manner, and to represent (name of your business) and its employer-clients with the utmost concern for their interests, goals and image with anyone contacted during the searches herein.
However, even those words won’t work unless you monitor the freelancer’s activity. The best way is by listening and correcting as necessary.
6. Protect Your Client and Candidate Contact Information
We discussed placement paranoia briefly in Item 3 with regard to selecting a freelancer. Once you’ve chosen one, you can use this paragraph to prevent his use of employer and candidate contact information (along with other goodies):
(Name of freelancer) understands that all names, addresses, email, telephone and facsimile numbers, employment preferences, and other information obtained during the searches on behalf of (name of your business) are confidential, trade secrets, and shall become the exclusive property of (name of your business) immediately upon being obtained by (name of freelancer.) (Name of freelancer) shall not retain, duplicate, disclose or use any of said information, except in furtherance of the searches herein. Upon the request of (name of your business), the originals and copies shall be immediately delivered by (name of freelancer) to (name of your business).
This isn’t a restrictive covenant not to compete or non-competition clause (as it’s sometimes called). Those are only marginally enforceable against a flexible freelancer.
The line is drawn at the misuse of proprietary information. If you go too far and attempt to restrict copying blank forms and procedures, or using “recruiting techniques,” the provision may be unenforceable. These can usually be traced to a zealous attorney with a jealous client. Neither of them budge a judge — instead he merely says the provision is “overbroad.” This is usually followed by the words “therefore ambiguous and void for vagueness.”
But if you can’t remember all of that, just remember they’re unenforceable.
By following these six steps, you’ll be well on your way to billing big bucks by brokering backup business.