Value Over Price
By Nina Mapson Bone
Recently I had a discussion with a potential client. The same discussion I have had with many clients over many years in this industry. The Business Leader bemoaned the terrible candidates, and disappointing service they were getting from their existing suppliers. We delved and dug and found out what they were looking for. We discussed how we work and what we could do that might make a difference to what they were experiencing. It was all going so well. At the end, when we went through our terms, the client said we needed to get those signed off by someone in their procurement team. My antenna went up.
Nonetheless, we discussed terms with the procurement person. The procurement person was professional, polite and not willing to move in the slightest from the aspects of terms that were non-negotiable. You know what they were. Very low fees, extended guarantee periods, and payment terms that essentially turn us into a bank to fund their payroll for a significant period of time, rather than a recruitment firm. All this for the roles that we would get after their internal recruitment team had worked on them for a minimum of 3 weeks and also, always in competition with a minimum of 3 agencies.
We politely declined explaining why it couldn’t work for us, and why we felt it was reflected in the frustration they were feeling with their recruitment process.
Our pricing provides the clients with the best opportunity to source the highest quality candidates and therefore generate the most value from a recruitment process. There is a misconception in the recruitment industry that the price can be driven down without it affecting the quality of the candidates that the client needs. This has seen a number of players go out of business since the GFC and a number of other players compete on price alone. Often this comes at the cost of the quality of training and support of recruitment staff, and the care dedicated to the candidates to ensure they are managed effectively throughout the process.
Putting people before profit, and value above price, ultimately secures a better result in the long term, which ends up being more cost effective. The long term benefits are reduced fall offs, reduced staff turnover for the clients, better engagement from the candidate, and better overall performance. The impact this will have on the client is worth significantly more than a reduction of the price of the recruitment process at the outset. Our challenge as an industry is getting the client to see that, helping our teams understand how to have that conversation, and being willing to play the long game rather than take a quick cheap fee.
Our hope, in this particular instance, is that the Business Leader will find a way to use us outside of their standard process so that he might secure a partner that will work with him collaboratively, based on value not price. But if not, we are ok with that. We will just work that little bit harder to find the clients that will.