Why "retiring" some clients is good for Business...
In today’s candidate driven market, much of a Recruiter’s focus is spent on candidates. This is, of course, essential, as this is what we are paid to do. But a lot of our precious time is often wasted, because we are working with the wrong clients and therefore focusing on the wrong Jobs. In my humble opinion, the secret to success is recruiting for the right companies.
Back when I was a recruiter, I only wanted to recruit for companies that I could easily sell; For the record, I recruited for Tech people for a mix of Startups and Investment banks in London, Sydney, Frankfurt and Tokyo. Early on, I was super fortunate to work with some amazing recruiters that mentored me on the critical facet often overlooked - the quality of your Client. I understood very quickly that it was important to be careful to recruit for the companies that I could easily promote and appreciated what I did for them. They would listen to my opinion and in some cases, would re-interview candidates that they had rejected based on what I thought (this did not happen often but they invariably hired that said candidate). In return, I would devote my time and passion to their business and found for them some great people.
Now I am in software, I get to talk with my recruiter customers and see that some of them share this philosophy. Ironically, they are the companies that seem to be expanding, seem to be more consistent in fee growth, as they focus a lot of their efforts on “choosing” the clients they want to work with. They are very particular with whom they work for, and especially what jobs they will focus on, and often will “retire” clients that don't meet their specific criteria. They use metrics to measure that relationship and act accordingly. For example, they may only work on an exclusive basis, or request that feedback is delivered in a timely manner (2~3 days for example) or agree a time-frame for interviews in advance and they charge good fees for their hard work. If you don't believe a client is right for you, then stop working with them. The great part about our business is that we don't need to 'fire' companies - you can decide who we want to work for and who we don't.
The seven types of trouble clients:
Prevention is always better than cure. So before you hit the phones or embark on an email or social marketing campaign, here are some “types” of companies you should be wary of.
1. "I win, you lose"
I have seen these types of companies in both recruitment and software, I am sure we all do. They have to win at all costs, there is a complete lack of empathy, or perhaps they simply don't care. Unless you do something about it, it can make your life and most importantly the life of your employees miserable. In the early days, I would put the blame on my shoulders; “Yes, Mr Client, it was my fault this person did not have a PHD…” even though it was not a requirement in your JD and you arranged the interview…. taking blame for the bad relationship may feel gracious, but it'll fuel the customer's sense of being wronged, especially the “I gotta win” type customers.
2. "We’ll pay next month"
Some clients think we're their bank, they'll ignore our 30-day payment terms, they’ll try not to pay some of the fees as the candidate was sourced internally, etc. As recruiters, we mostly work on a no-win no-fee basis, so if we get you someone that is potentially going to get you a promotion or give your business an exit, then you should pay on time. As every business owner knows, cash flow is our lifeblood. When a client starts abusing the financial aspects of the relationship, speak with them and see if they are willing to change – if not, it's retirement time.
3. “I am not sure”
When you speak with them about their jobs, and you ask them what is the submission deadline for candidates, or how many and who will be interviewing, start date or just describe your ideal candidate, and you are getting consistent “I am not sure”, then either pitch an RPO solution or walk away. I want to work with companies that see recruitment as important as any other part of their business, not just a “necessary evil” that gets passed around because no one can be bothered. For these guys, be careful, this could be a gold mine or big hole in the ground. Choose wisely.
4. “They should work for us for free”
Yes, you have a great name, yes your predecessors built an amazing corporate culture and now you think that you don't have to pay market rates for candidates. Or you are an amazing Tech start up, you have “Unicorn” written all over you, wow you're amazing… These “clients” will talk at you and when you work with them their vibe to candidates is that they should be honored to even be considered for interview... Or “They’re not worth what they are asking” is a great one. Candidates nowadays understand their market value. Sure, some overestimate their worth but most have some realistic expectations of what they should be paid to leave their company and move into the unknown. Companies that don't understand this conundrum are a disaster. Think Florida or the Gold Coast, think retirement villages – you get my point.
5. Clients who are rude and abusive to you or your staff.
Yes, we are providing a service, but you’re not paying me enough to be your punching bag (at times, if it was a great client, paying big, I would suck it up, but there are limits). You need to know where to draw a line on these ones. Some can be great (perhaps, because no one else will work with them), but be wary.
6. Clients who make unreasonable demands
Refunds long after the Placement, free services far beyond the scope of your business, steep discounts for no good reason….again, this is a tricky one, there is no harm in asking for discounts, or free services, why not? But be commercial always, try not to be emotional. Think “What do I get in return for the discount?” (Exclusives / retainers / shares?). If it is a one-way street…it’s probably time to consider a break-up.
7. Clients who threaten to complain about you on social media, to other recruiters and friends.
I love this one. You have not found that needle in the haystack, or one of your candidates left because they could not put up with their boss, or they haven’t paid you for 3 months and you ask them for the money. Suddenly, you are at fault, you are the person that should be blamed… Hmmm. If it’s a one off, ok fine, but a consistent stream of threats and abuse, look to get of this ship fast…the quieter the better.
Whether you chose to retire an existing client or decide against working for a new one, it is best that you don't ever say anything negative about the prospect /client, the world is a small place. Instead, define what about the prospect / client was out of sync with your business so you can avoid entering a similar, costly relationship in the future. And yes, it will be a load of additional work to find those great clients, some trial and error, but I promise you, it will be worth the effort. One word of caution though, great clients are hard to come by so if you're thinking of 'retiring' a client or turning down working for a new one, just be honest and explain why together you are 'not a good fit' (Try not to be too honest!)
Note: I understand that we cannot all choose our customers. So, early on you will need to nail the seven traits of recruiting success (listed below) which I will go into on a future blog.
1. Specialise - Industry and functional understanding and appreciation 2. Elevator pitch – have a 2 minute close as to why they should use you 3. References – recruiting for a competitor or competitors is always good. 4. Appearance 5. Ask good questions that matter (ie, will let you decide if you can sell this job or not) 6. Appreciate their time ‘Can you talk now”? 7. Sell and then deliver.
Disclaimer: I am not insinuating that you check list your Clients and dump those that match any of the seven trouble “types”. What I am saying is that you don't have to do anything, which includes continuing to work for them with the present circumstances in place. Sometimes an honest conversation over a coffee is all that is needed. However, candidates will judge you and your business by the company you keep; bad clients are simply bad for business.
About Bernie Schiemer
Before founding Vincere, Bernie spent 16 years in the recruitment industry in the UK and Japan. In 2007 he sold his recruiting business in Japan to Hay PLC and completed his earn out at the end of 2009. He founded Vincere 3 years later. Follow Bernie on LinkedIn or learn more about Vincere here.