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We’re Tight On Budget

Companies tight on budget will still use agencies for recruitment as long as they can get a good deal out of it.

A good deal for them is one month’s salary as placement fee.

It is not such a good deal for the recruiter, I must say.

If your candidate gets an offer for $5000, you get $5000 as placement fee.

It is not that much considering the amount of work you do.

Nevertheless, when times are hard, it is not surprising to see recruiters bend backwards and accept such terms to tide over.

I just want to give a quick tip to recruiters who are in these shoes.

For such terms, your deliverables cannot be the same as what you do for clients paying you 20% or above.

What you can’t cut corner on would be the fit/quality of the candidate but there are other details you probably can negotiate through and that is often agreeable by the client who knows they are pressing down on your fee.

Their guilt will prevent them from asking for more.

What you can negotiate:

• Shorter guarantee period (1 month instead of usual 3 months)

• Only the raw CV is provided

• No reference checks on client’s behalf

• Invoiced full on the date of acceptance instead of invoicing on start date (improve your cash flow)

On top of that, you can also negotiate this as a one-off agreement for the client to validate your effectiveness.

Some clients are willing to pay a higher fee once they acquired a taste of your ability and so you can position this 1 month placement fee for only one project.

This will help you get back on track from project 2 onwards.

p.s. I prefer value pricing but when this situation happens, I take a quick stock and decide whether I want to pursue. Speed is the name of the game.

p.p.s. A warm welcome to everyone who subscribed The Solo Recruiter. You are now a part of this Spartan tribe that are committed to getting results. I call you Spartans because you mean BUSINESS.

Let’s connect on LinkedIn where I share tips for career development and strategy and on my Facebook page, I share solopreneur tips for those who want to build their side hustle. And I cover both topics on TikTok for those who enjoy videos.

​About this newsletter: You are receiving this email because you subscribed to my weekly TSR (The Solo Recruiter) newsletter. Every other week, you learn the strategies that successful recruiters use to grow their businesses by doing the vital few. If you are interested to launch your own agency, drop me a DM.