How to Demand the Biggest Recruitment Fees

By Liz Carey

Dreaming of 30% recruitment fees? As a recruiter, working the right industries and high-profile jobs where quality candidates are in great demand are obvious ways to earn big recruitment fees. But you won’t always have a stack of VP or Director-level jobs sitting on your desk… so how do you negotiate a bigger recruitment fee?

A client must be greatly motivated to pay a large recruitment fee – often when they can’t find the candidate they need and have exhausted all resources. Companies are willing to pay for top talent, and as a recruiter, your challenge is to convince them that you are the only one suitable of finding those superstar candidates.

According to Greg Savage, the way to stand your ground during fee negotiations is to talk about your value… not about your price. In other words, what do you do that gives your client special value? A niche focus, multiple firm locations, specialist knowledge, access to a global network and proprietary software?

Oftentimes, clients don’t really understand what goes into a search, so it can be helpful to go through your entire recruiter process, from searching to advertising, screening to interviewing, reference checking to testing, “selling” the job/company to a passive candidate, etc.

If you plan on charging more than your competitors, you need to show them that you are worth more than the “going rate” and that your value as a recruiter goes beyond sourcing candidates. That could be by providing hiring expert knowledge via newsletters or blog articles for your clients, to one-on-one consulting time. The recruiting industry knowledge and connections you offer add value to your services, as well. For example, if you are part of a recruitment network, you are offering your clients a larger talent pool and a broader reach into different geographies and industries via your trading partners.

As a recruiter, you may have considered lowering your recruitment fee to be more competitive. But it may not be in your best interest to lower your fees. Lowering your fee can devalue your work or show that you aren’t as confident in your product.

If your client won’t budge and insists on a discount, make sure you get something in return so both sides of the bargaining table have to compromise and it’s an equal partnership. Maybe you lower your recruitment fee percentage from 25% to 20%, but insist on an exclusive agreement (or client-paid advertising, or payment within 10-15 days, or multiple future job orders, or you waive the guarantee). And make sure you get your agreement in writing, including the fee structure (contingency, retainer, container, etc.), the guarantee period and guarantee terms, and when and how you will be paid.

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