QUESTION: I am not getting the costs of open position, the financial analysis. I could use further discussion on the technique on the costs of an open position. – Jim, Texas
ANSWER: The Cliff Notes version of this answer is if your client says that they do not know the cost of letting the position remain open, you should ask them why they are filling it at all? That is the question you should ask them.
You can say, “Maybe you should redirect those funds that you have budgeted for this head count into an equipment upgrade, into a facilities upgrade, into just maybe poor profit because if there is no cost of letting this position remain open we could make the argument Mr. Employer that you really do not need this person.”
Recruiters would never think to say that because why would I talk about not filling an opening? You are not going to talk the client out of filling an opening. I do not think I ever did, but I am going to get them serious about what the cost is of the opening because if I cannot help them determine the cost of an open position, it makes it really hard for me to justify higher fees, retainers, engagements, and lower guarantees, etc. To be effective at this requires you to have more of an understanding of your niche than most recruiters have.
Once you ask this question a few dozen times you are going to hear very, very similar answers. When you hear very, very similar answers you are going to be able to direct your questions much better to the subsequent clients and this is how you become a market master. If becoming a market master were easy, everyone would do it. Most recruiters are very lazy. That is the good news for you. If you do just a little bit of work, not a lot of work, if you do just a little bit of work you are going to be perceived as significantly better than the recruiters you compete with and you will not have to work the crap.
When you do this, does it work 100% of the time? No. It does not even work 50% of the time. But when it works, you have a client that will usually pay a high fee, retainer or engagement, and will give you multiple openings per year. How many clients do you need to give you three, four, or five openings a year for you to have a wonderful year on your desk? If you are a firm owner, how many of those do you need in your firm?
Again, this is a process I did on my own, then I replicated it with the people that worked for me, and now I am replicating it in the market. So I know it is not a Mike process that only works with Mike. This is a process that when you follow it, it works really, really well.