What to do when a client changes the terms of the fee agreement

QUESTION: Just got back an email from a prospect where I sent a fee agreement for my fee due net 30 days. They agreed to the fee, but they marked up the payment terms to 50% net 30, 50% to be paid 6 months after start date. Besides “hell no,” how do I respond?  – Michael

ANSWER: I love the fact that “hell no” is one of your options. First of all, never respond to this in email. I cannot say you will lose 100% of the time, but you will probably lose 90% of time. 

Second, when you get them on the phone say – I am really concerned. They will say – What do you mean? This did not come up in our phone conversation, or if you are dealing with Human Resources, in the phone conversation I had with the hiring manager. What horrible attrition problem do you have that did not come up in my other conversations with you? I asked that so I am not the one on the defensive, and to shift the energy of defense back to them. 

They may say – Well . . . .  We got burned by a recruiter before . . . with a guy who left after 5 months. I always say – Oh my gosh, the recruiter who placed him recruited him out after only 5 months? And 100% of the time they said – No. 

The guy left, but they say in one way shape or form, if you have been in the business you have probably all heard this, the recruiter screwed us over because the guy left in 5 months and maybe they had a 60 or 90 day guarantee.  

So I would ask – Help me understand how the recruiter screwed you over . . . this is where I play ignorant really well. They may reply – Well, the guy left. My response would be – What did the recruiter do to influence he or she leaving? Well, I think recruiters should stand behind their product. You know, he or she, the recruiter did not manufacture them in some facility. They found and identified them in the market. They probably reference checked them along with you. Did that happen? Yea. Did the person demonstrate that they had been with other companies for more than 4 or 5 months consistently? Yes. So again, I am just missing it. What did the recruiter do to screw you over?  

That is why they all want extended guarantees. People leave early sometimes, beyond their control and beyond our control. I think it is important to shift the energy there because they think we should, as if we are selling dishwashers or clothes dryers. That is a great point to get confused.  

So again, I say to them – What was it in their process that happened? Again, 99% of the time it is all about this person leaving. Say – I have not worked with you guys, no judgment, so I am not accusing you of this, but I have been doing this a long time. Here is what I have seen happened when candidates have called me and they have said to me – Get me the heck out of here. 

Remember, Mike, when I was interviewing and they promised me A, B, and C. Now they said I have to suck it up and B and C might not happen for a year, if at all. Those were 2 of the big reasons I joined. This is exactly what I would tell employers. So if you do not Mr. Employer or Ms. Employer, if you do not live up to your promises to the employee with a 6-month guarantee, you are holding me accountable for that?  

Since you could not provide me any evidence of when you have been “screwed over by recruiters” in the past that the recruiter had any involvement, why am I the one, since they are not on my payroll? I do not have management meetings and accountability meetings with them every week. They are not under my control. Why am I the one being held accountable for that?  

That is the most effective argument I have used in getting people off of that versus just ping pong defense back and forth to every point they have. It is really getting a thorough understanding of where they are coming from and a thorough understanding of “what they feel by burnt before.”  

Now, every once in a blue moon you will hear stories about recruiters recruiting out the person they placed in a relatively short period of time. Shame on those recruiters. They blacken all our eyes.  I will say I have no problem putting in place if we recruit the person that we placed, especially the person we placed within 24 months of them starting, I will provide a full refund. I am never going to recruit the guy I place and can put that in writing, no problem. 

Great question. I think we all get bumped with that. But it is important again to do a diagnostic, and if you did not hear me at the beginning, this does not occur in email.

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