QUESTION: Mike, do you recommend taking existing clients from contingency to retained or engaged, and if so, how do you do that? Sara, Naperville, IL

ANSWER: That is a great question!  Yes and no.  When I evolved my business from a lot of contingency to retained, I did it mostly with new clients.  When I brought on new clients I started the relationship on an engagement basis as often as possible.

Clients of mine that were contingency, so there were 2 kinds of clients that were contingency, there were good contingency clients and then there were weak contingency clients, and by weak I mean they were not as responsive.

If they were a good contingency client, I did not change them.  What I would do with those people, but I would tell them,

“Hey, Sara you have been a fantastic client.  I really evolved my business to where now we are getting about a third of the fee upfront.  I would not do that with you and here is why.  You know Sara, when I work with you, you call me back, you treat me as part of your team, we work together really, really well, and for the most part, whenever you give me an opening I am the only one you give it to and we fill it.  In case you hear out there that I am a retained recruiter, I am, but you and 1 or 2 other people are grandfathered as long as this relationship stays like this.”

You put them on notice that they are special and you put them on notice to stay special so they appreciate that.

I did have one client that worked with me, I remember specifically they worked together great with me, and then one time they gave me 7 openings exclusive contingency and we found 3 or 4 candidates for each one and they cancelled all of them.  Then in 3 or 4 months they reopened most of them and then changed a couple of the cities and they asked me to get started again.

I said I did the first ones for free.  I am not doing these for free.  I went through a process with them to say I am not raising your fee, but I want a third of it up front because if this happens again I cannot afford to put the resources on that I did the last time.

They said, “Mike, we promise you it is not going to happen again.”

I ask, “Are you confident that I am going to fill the position?”

“Oh Mike, you have been great.  You filled all our openings.”

So before I reply, I said, “I just really need to know there is nothing holding you back from working with me.”

“No, we are not working with any other recruiters.  We are just working with you.”

“So just to be clear, you are confident I can fill the position.”

They say, “Yes.”

I ask, “But you do not want to send the money upfront?”

“No, we do not.”

I reply, “So basically what I am hearing, reading between the lines, is if everything you said to this point is true, so far you must not be sure you are going to follow through with completing the positions because you said you are confident working with me, you are confident that I am going to fill the positions, meaning that it is a no brainer then if I am your guy to pay me money upfront because I am going to credit it on the backend.  The only reason, if everything you said so far is true, that you would not want to pay the retainer is something in the back of your mind is you want to be liberated to have zero obligation if you do not fill these positions and bluntly, I am not comfortable with that.”

That is what put them over the edge.  They saw my point.  I had to talk to them logically, not about what I need, but I went through, “I am the guy, you are not working with anyone else, you are confident I am going to fill the position”.

“Yes, yes, yes, yes, yes.”

“You are telling me right now, you are promising me you are not going to cancel, that was the other point.”


“So sending me money upfront is a no brainer if all those conditions are absolutely true.”

“Well, we do not want to do that.”

The only reason that would not be true then is at some level you are either not telling me the truth or you want the flexibility to cancel the positions again, either one of which I am not comfortable with.

It is fun when it works that way.  Great question.  Thank you.