Good Morning Texas!
How To Get A Job (2012 Edition)

Would You Ever Consider A 100% Search Fee?

Todd Kmiec writes today about a position he's working on.  It's  a true purple squirrel - a job so hard to fill, that you're more likely to find a purple squirrel than the right candidate. 

It's been open for two years.  Two whole years, and they haven't found the right person, and haven't compromised.  I wish Todd the best of luck in finding it.

But it got me thinking. 

95% of clients tell you the need is urgent.  By the time they are ready to actually sign a contract, they are ready to hire.  The manager usually does have that urgency, but in many cases, it's not an easy fix.  You can't just drum up a director of E-commerce for a major brand on a moment's notice.  If you do have candidates of quality, you still need to dig deeper and find more - you're getting paid to find the right candidate, not the available candidate. 

Urgency is always on the table.  It's one of the reasons you pay a recruiter.  Finding a candidate that they company hasn't screened is why they're coming to you.  It's what justifies a 20-33 1/3 % fee (recruiters charging under 20% shouldn't be taken seriously in my opinion - the economics behind their work just don't work out if they're doing real recruiting).  But if urgency qualifies you for 33 1/3 %, what would super urgency justify?  

What would you do if you needed some very specific needs in a nationwide or worldwide search and the impact of doing so would be the success or failure of your business?  What would be the ceiling for how much you would pay to find the right candidate?

You scoff.  We all would.  The idea of paying 100% to find a candidate seems incredible, but what if it guaranteed you the best recruiter in the world and their top assistant digging through thousands of profiles to find the right candidate and preparing them for job? 

I think it's not only possible - I think it makes sense.  

Let's do simple math.  Companies hire to generate more wealth from an individual than they pay them.  That's the point of hiring and it's why improving worker productivity is such a hot button.  If worker productivity is the key, what would you pay to get a more productive worker. 

Let's say that the average worker generates a 10% return for what you pay them, while an excellent worker provides a 50% return.  A super excellent worker provides a 300% return, and the numbers follow a basic bell curve.  In this scenario, a 100% fee, in one year, to hire a super excellent worker for  say, three years, still generates an 800% return.  That's a good investment.  It's easy math.  As long as it's correct math. 

There would be only three reasons not to take that deal. 

1) You don't believe the super excellent worker provided by the recruiter returns 300%. 

2) You don't believe the super excellent worker will stay for three years. 

3) You're afraid that paying 100% for a single worker disrupts the normal hiring process sufficiently that the impact on your workforce or your personal career is greater than the potential benefit. 

The first answer is a fair one.  Proving success from one company to another is not an easy task, and it's far easier to average it out with several hires than it is to hope for home runs on single employees.  The second answer can be handled with guarantees or performance bonuses.  But the third answer is the big one.  You can't afford to pay 100% for a worker because when it gets out, it will poison your workforce and your hiring strategies. 

Which says more about the workforce than it does the process by which we hire. 

So I leave you with this.  I don't expect anyone to pay a 100% fee anytime soon.  But if you have the chance, you ought to speak to executives about when it would be appropriate to do so.  The argument as to why could open up good discussions about your hiring process.  It certainly helps you identify what executives are open minded enough to consider why they pay what they do, and which simply pay what is the market rate.