QUESTION: I have a client where we have an existing agreement in place but are currently not working on any searches. I heard through the grapevine they were looking for a new president, and I had a candidate. They are using a large retained search company for the search but have not found anyone. I contacted their new CEO who is open to seeing my candidate. He is now in process. Since I have not been involved in the search other than presenting one candidate, do you think a 50/50 split is fair if they hire the candidate versus the full $75,000?
ANSWER: No! They should pay you and they should pay the retained firm. They are using a large retained firm for the search but have not found anyone.
So you are rewarding the retained firm for their lack of effort. You already have an existing agreement in place and were not brought in by the large retained firm. For example, if the retained firm asked if you have anybody, and you provided a candidate that was interviewed and the client likes him, you are going to split that placement fee with the retained firm.
The retained firm did nothing, so let them apologize to your client for their lack of production. If the client comes to you and asks you for a discount, you can ask, “What did the large retained firm do to help me help me find this candidate?” They are going to say anything.
I hear stories about this from the large retained firms all the time where one of my clients or a smaller boutique firm comes in that is a specialist in the niche that has somebody, and companies will pay – they do not want to – will pay two fees. Seriously, and I would hold my ground, because you already have an existing fee agreement with them.
The key in these situations is to avoid being defensive because there is nothing to defend. Your agreement states if they interview somebody and they hire them within a year of the presentation they owe you this agreed-upon fee. Based upon your percentage I am guessing it is $75,000.
If they say to you, well, we are also paying another recruiter, I would say, “That is really unfortunate. I understand it is terrible. I am just curious as to why I should be discounting their lack of performance? Why did they not find this guy?”
Then I would just be quiet because I am not going to make a statement. If they get technical with it, I am going to counter by saying that I have our fee agreement in front of me. And then offer to send a copy to them. I would ask them to help me understand where in our fee agreement it allows for you to have a 50% discount if you have hired another firm that did not produce my candidate.
Do not get me wrong, this is a really tough conversation. I have only had it maybe a dozen times in my career. I have never had a client not hiring the candidate. Granted, it was not always a situation with two fees, but there was always a situation where they wanted to reduce the fee for some reason that had nothing to do with what I did, or with my agreement. They had another story attached to it.
That is a fantastic question. Thank you!
Photo by Mimi Thian on Unsplash