Are You A Client or an Ad-Hoc Customer?

Posted November 21 2018 By Dean Durrant
 Scrolling through LinkedIn earlier this week, taking in the swathe of motivational pictures, that video of the bear and her cub climbing up a snowy hill (teaching us to never give up!), the endless Brexit chat,  plus numerous other gems of wisdom, I happened across a post asking “How do you define who is a client and who isn’t?”. Reading the comments, one response from the bold Mitch Sullivan resonated with me. It said “For me, a client is someone that only uses you. Everyone else is an ad hoc customer”. This got me thinking that a lot of the clients I have worked with are in fact ad-hoc customers, owing to the fact that they use several suppliers to recruit for the same roles. They are not really ‘my’ clients at all. Why does this matter? Surely, it’s just semantics? 80% of the time it really doesn’t matter. Contingent recruitment works fine a lot of the time. The combined sourcing efforts of a number of recruiters will often come up with a result. One recruiter gets paid, the others don’t. And that’s okay. You go into these agreements knowing that this is the potential outcome. The problem comes from the 20% of the time when it doesn’t work. There is a very simple explanation for why this happens... Take this fairly typical conversation: Business: We have a PSL of 5 agencies so don’t need any more support. Me: I noticed you have had XYZ job advertised and unfilled for 6 months? I would like to help you with that. Business: That’s right, our agencies haven’t been able to find us anyone suitable for that role. It’s a critical hire and is causing us some problems. Me: I am working with a candidate that I am confident would be a strong fit, and who has asked if I can approach you about this role on their behalf. Can I share the profile with you for review? Business: Like I said, we have a PSL in place, so no we couldn’t consider your candidate. Me: Can’t you stray from your PSL if your agencies aren’t delivering for you? This might be the CV you have been waiting for! Business: No, we’ve asked the PSL for more CV’s. Again.  We will be reviewing the PSL in 18 months if you want to call back then. Goodbye. Me: Facepalm. Think about it this way: You could have, in any given PSL, five agencies working on the same role, each with an even 20% chance of filling it, and therefore a 20% chance of getting paid - who doesn’t like a gamble? This is called contingent recruitment. A 20% chance of getting paid isn’t great, and I’m sure most people in business would agree with this.  Therefore, to increase your odds, realistically it would be necessary to have, say, ten jobs to work on – each with a 20% chance of success.  Probability suggests that your odds of a win will then improve significantly (who said recruitment is a numbers game!). So, the recruiter with ten live contingent jobs divides their time accordingly, and each role gets a portion of the recruiter’s attention - 10% actually. For the client, this means there are five recruiters, giving that important vacancy only 10% of their time and effort. For the recruiter with 10 jobs to work on - a 20% chance of getting paid for each, for only 10% of their time, seems like a decent bet. Like I said, 80% of the time, this works just fine. The problem comes when the role remains unfilled after the first attempt (remember the 20% mentioned above?). Your five agencies have already given you their 10% and lost (that’s your free bet used up!). By now, those recruiters have secured some fresh shiny new jobs to work on. Let’s say they now have 11 jobs. Oops, how can they possibly give 10% to 11 jobs? Do they revisit the job they failed to fill first time round, or do they focus instead on the shiny brand new job? After two or perhaps three failed attempts, how much time do you honestly think your unpaid contingent agencies are going to give that role? So, I’m saying: Be a client, not an ad-hoc customer. Would things be different if the odds of a recruiter being successful were increased to 100%? Give that job to one recruiter, pay them a nominal sum up front (forming a meaningful business contract) – then hold them accountable and demand 100% of their time and attention, until the best candidate is located and hired. And you can demand that, because you have paid them to do just that. This is called retained recruitment. MYTH: Retained recruitment is expensive and is only suitable for executive level positions. Last month, HRC Recruitment filled five retained roles. The salary for one of those roles was £28k. And I’ll let you into a little secret - retaining an agency to recruit for you doesn’t need to cost a penny more than contingent. Just to be clear, it costs the same. For the same spend, would you rather get: 100% effort, ownership, and accountability until the role is filled OR 10% effort (from five different people, on a one-time deal), little to no accountability or ownership, and no obligation to revisit a role if it doesn’t work first time. If you’d like to get in touch with me with regards to roles in the Change & IT space, click here for my details.
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