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Ok, let’s dive in for today. What’s Cooking?

Pricing It However You Want

In recruitment, the usual placement fee is 20%.

It’s the golden number because it keeps you at a profit margin that makes it worth your effort and at the same time, it is not outrageously expensive to your clients who are used to seeing this number.

Then, there are some agencies that undercut this by offering 15%.

I know of a few that go at 12%.

At 12%, you need churn. In other words, closing multiple vacancies for the same role. Imagine placing 5 candidates for a contact center.

It’s possible but in my opinion, not the ideal business model if you are serious about building a sustainable revenue from recruitment business.

The diamond mark is 25% and I know of companies that charge 33%.

How did they do it and why did their clients accept such unreasonable rates?

It’s About Your USP

USP is your unique selling proposition, or the value you bring to your clients.

If you are offering the same service quality and deliverables, then you won’t get much traction with your 25%. In fact, you get booted out by the competition unless your reputation precedes you. That’s possible, but it takes time to build that authority and trust.

So the idea is to deliver exceptional value that others are not providing. Think of it like a Grand Slam Offer, an irresistible offer that clients know they get more value out of you than they are paying you for.

There are various ways to achieve this. Here are some ideas:

• Providing a longer candidate replacement guarantee. 6 months instead of 3 months.

• Candidate landscape report and insights to help your clients make informed decisions.

• Tiered payment, with remaining fee paid after probationary period.

• Commitment of candidate pipeline building for your clients, so that hiring is faster upon need.

• Providing FREE candidate coaching to support their assimilation into the new company.

The list is not exhaustive but the gist is the same. By packaging your offering creatively to meet the needs of your client, you can price it differently to deliver unique services and achieve increased profit margin.

Not only that, any time you price different, the natural question from your clients would be: Why are you more expensive than the rest?

That’s your chance to sell your uniqueness.

It’s win-win.

Joo Kwang
​Author of Solopreneur’s Guide to Recruitment Business

​About this newsletter: You are receiving this email because you subscribed to my weekly TSR (The Solo Recruiter) newsletter. Every week, you learn the strategies that successful recruiters use to grow their businesses. So you can also do the same and launch your business.