Agreements and Multiple Sendouts Help to Prevent Discounting

Ask BarbEditor’s note: Barb Bruno’s Ask Barb column appears immediately below this personal note from her concerning the closing of The Fordyce Letter.

Thank you Fordyce Letter

Early in my career, the Fordyce Letter was my lifeline to learn the staffing and recruiting business. I read each publication and implemented many ideas and strategies that  improved my business.

Years later it was a distinct honor to be asked to write my “Ask Barb” column and to chair the Fordyce Forum. It was an opportunity to give back to an organization that had truly enhanced my career. I want to thank Ron Mester and John Zappe for their leadership and contributions to the staffing and recruiting profession.

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Dear Barbara:

We’ve had three clients negotiate our fee right before they were going to extend an offer. In all three cases we reduced our fee, because we didn’t want to lose the placement. This is also happening in our contract division with margins being reduced. The candidates could have easily been placed at other companies for a full fee, but they all wanted to work where our clients were negotiating with us. How can we stop this? My account executives are too willing to reduce our fees and margins, but are reduced fees or margins better than no sale?

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Janet M., Madison, WI

Dear Janet:

It sounds like your entire team is convinced they have to reduce fees and margins to be competitive. There are clients (especially when they view our services as a commodity) that are 100% based on cost. Too often, these clients all but wipe out your ability to generate profits. Your team must know what the minimum markup must be in order for you to generate a profit, and be able to sell against reduced fees.

If your team was sending out candidates on more than one opportunity, the competition for the talent helps increase fees and margins. Signed agreements up front also help clarify the value of your services and percentages that will be paid.

I’ve seen owners actually lose money on contracts and assignments where margins were quoted too low. There are times when you must walk away from clients who negotiate after the fact. I would also suggest that you as the owner meet with the clients who reduced their fees to show the value of your services, explain this was a one-time discount so you prevent this from happening in the future.

Barbara J. Bruno, CPC, CTS

Barb Bruno, CPC, CTS, is one of the most trusted experts, speakers, and trainers in the Staffing and Recruiting Professions. If you want to receive FREE training articles from Barb, sign up for her NO BS Newsletter! Barb has spent the last twenty years focused on helping Owners, Managers, and Recruiters increase their sales, profits, and income.

Her Top Producer Tutor web-based training program jumps-starts new hires and takes experienced recruiters to their next level of production. Barb's cutting-edge program, Happy Candidates, provides you with a Customized Career Portal in less than 10 minutes. Happy Candidates allows you to help the 95% of candidates you don?t place and eliminates the greatest time waster in your business.

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