Why clients give out orders in competition… and why it’s wrong for everybody!

There is an elephant in the room when it comes to the basic business model of our industry. People don’t talk about it much, yet it’s a fundamental flaw in the relationship between client and recruiter, and it drives poor service and lack of satisfaction for all parties.

Multi-listing of job orders across multiple agencies, and recruiters accepting briefs on a contingent and in-competition basis.

There are three primary reasons client multi-list job orders and expect recruiters to compete on the same order with a “winner take all” outcome for the agency that fills the role.

  • Clients live under the erroneous belief that by pitting several agencies against each other, they some how “keep us honest” and will get better service because we will compete more aggressively
  • Clients want to give the job out to several recruiters because this way they will “get a better spread of the candidates available”, and
  • The third reason is the most damning. Clients do it because most recruiters don’t have the knowledge or the courage to tell them why it is NOT in the clients’ best interest to give a job order to more than one recruiter.

This goes to the heart of being a ‘consultative ‘ recruiter. Unless you want to be a transactional beast of burden, you must be totally articulate in positioning why a client is doing themselves tremendous harm by getting recruiters to compete. By all means let recruiters compete for a client. No problems there. But not on the same job. That’s just dumb business by all parties.

Let’s look at the first two client reasons listed above and examine what is happening when a client gives a brief to say, four recruiters.

The client thinks they get better commitment from each recruiter. In fact quite the reverse is true. We have to be prepared to look a client in the eye and say “Mr. Client when you give an order to four recruiters, you are effectively giving each recruiter 25% of your commitment. What makes you think that any one of those will give you more than 25% of their commitment in return?

In fact what you are doing Mr. Client, is inviting us to approach your crucial hiring decision on the basis of speed – instead on the basis of who can do the best quality job”.

It’s a compelling argument and most clients can see the logic when they think it through. Far from getting more commitment when clients get recruiters to compete, they actually get less commitment and lower quality service. At best they can expect a flurry of activity as the recruiters first refer who immediately comes to mind. But when the hard work needs to be done in terms of sourcing hard to find talent, the recruiters will drop off and focus on clients who DO give them commitment.

Once this is explained to the client, then a skilled recruiter will go on to ask the client for a “window” of opportunity to handle his role exclusively so that you can give the role 100% of your commitment and bring all your resources to bear to ensure the best quality outcome.

Then let’s address the second client reason. “I want to get a better spread of candidates out there.” Again you need to have courage to face the client down on this.

Ask the client what percentage of people he thinks are available to move jobs (who are suitable for his job) who are currently registered with any recruiter at all. Latest research suggests this number is less than 5%. We need to explain the active vs. passive job market. Explain that you need time to winkle this person out of a job where they may be now. (Advertising, networking, social media, headhunting, database search).

Passive candidates do not respond to advertisements.

If the client gives the job to four recruiters, he is just fishing in the same limited, active job-seeker talent pond – and no recruiter will be committed enough to invest time searching beyond that pond.

A great recruiter has the credibility and the confidence to secure the role on a retained basis or at least exclusively so he/she can have the time to put a full range of appropriate strategies in place to find the right person.

Paying a contingent fee for a multi-listed job is like paying a bounty hunter in the days of the Wild West.

And if you pay recruiters like you pay cowboys, you just might get cowboys.

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About Greg Savage

Over a career spanning thirty years, Greg Savage has established himself as a global recruitment leader. Greg is a regular keynote speaker at staffing and recruitment conferences around the world.

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16 Responses to Why clients give out orders in competition… and why it’s wrong for everybody!

  1. Rich White October 30, 2009 at 8:14 am #

    Hear hear!!

  2. Lyndon Hawk October 30, 2009 at 8:18 am #

    Greg,

    A great article and I wish more recruiter’s took this approach with their clients. If more recruiter’s did this then the recruitment industry as a whole will improve and our clients will understand the value that they get from using professional, reputable consultants.

    Keep your articles flowing.

    Best Wishes

  3. Nick Walrond November 4, 2009 at 3:48 am #

    Greg – I thoroughly and whole heartedly agree with your comments and sentiment. We have recently blogged on a similar topic, trying to link the next war for talent with a need for our customers to engage with us in a more partnering manner (see: http://blog.sandersonplc.com/). Unfortunately there appears to be a belief in too many end customers that all data is freely available, it won’t be until their searches do not bring forth results that the wind of change begins to properly blow again in the recruitment market – at that point the true recruitemnt consultant will not only return but be highly valued once again!

  4. Marni Hockenberg November 6, 2009 at 12:53 pm #

    Thanks for speaking the truth! I worked at a contingent firm for five years and when I left to start my own recruiting firm the first thing I did was switch to a retained business model. Hiring managers don’t realize that the fees are the same in most instances. They think that retained is more expensive. They also don’t realize that the level of customer service and the guaranteed results with retained search will actually save them money in the long run because they’re not going to waste time interviewing candidates who are not qualified and the position won’t sit open for longer than necessary.

    I’ve talked to a lot of contingent recruiters who wish they could switch to a retained model because then they would get paid for their efforts (what a concept and a subject for another discussion). But they say that companies won’t use retained recruiters because of unfounded fear and outdated corporate policy. So where does this leave us – with unhappy contingent recruiters and frustrated hiring managers. Sad.

    Here’s my proposition to contingent recruiters who would like to get paid for their work and who have a desire to raise the bar for better customer service and solidify a long-term relationship with your clients – start asking for a retainer and explain to your hiring manager why it’s in their best interests. We need more recruiters to be brave and ask for what you want in order to change this outdated (in my opinion) contingent model. I know that it’s not easy but in the long run you will be happier with guaranteed income (via retainers) and your clients will be happier with guarenteed results. It has to start sometime and why not now?

    And don’t forget the candidates who are frustrated with having their resumes shot all around town without their permission by contingent recruiters; or who interview on a job where they realize it’s not a fit because the recruiter didn’t have an indepth understanding of the job/client. Candidates are a vital part of our business equation and more and more of them don’t want to work with contingent recruiters.

    It’s time to address this dysfunctional business model. Thank you Greg!

  5. Tim Latham November 24, 2009 at 7:54 pm #

    I agree wholeheartedly that the inexorable rise of contingent multi-provider recruitment has led to a lowering of standards – so on that point we agree wholeheartedly.

    However, whilst your contention that better honed persuasive skills from recruiters is the answer is attractive I’m afraid that my experience is that isn’t possible. I come from a retained recruitment background with one of the major management (yes management, not recruitment) consultancies but I know that if I were to adopt your suggested cure, no matter how persuasive I was, sadly I wouldn’t have a recruitment business of any scale. Why not? Because huge swathes of UK commerce & industry have decided at Head of Recruitment / Recruitment Director level (or higher) that the contingent / multi – provider recruitment model is what they are going to do and they won’t entertain anything else.

    We can “know” that it is producing sub-optimal results but if the customer / client has decided they want that model then that is what the providers have to provide. Large numbers of very well known employers have elected to adopt this model and we must assume that their Recruitment Directors have thought it through.

    So I think that the solution for the recruitment sector lies in figuring out how to deliver excellence within the contingent / multi-provider “rules of the game” – that is a tough one to crack, but we for one are giving it all we’ve got.

    • Mitch Sullivan September 6, 2013 at 4:07 pm #

      Tim, what’s more likely is that you weren’t selling it properly and/or selling it to the wrong people.

      Contingency has taken root, you’re right – and most managers see it as the default way to fill jobs via external suppliers. But the recruitment landscape is very, very different to how it was when contingency became so accepted, pre-Internet, social media, job boards and LinkedIn.

      Whereas previously when a client gave a role to 4 different agencies, those 4 agencies would all go and fish in 4 different ponds. Today, those 4 agencies would all mostly be fishing in the same pond. And having your target candidates being contacted by different recruiters about the same job just trashes the client’s employment reputation.

      That’s just one example of why it’s no longer in the client’s best interests to use the contingency model for anything other than the most junior rank and file jobs.

      Essentially, what you seem to specifically be saying is that recruiters aren’t able to sell more complex solutions and are at the mercy of whatever archaic recruitment philosophy their clients have. More broadly, you seem to be suggesting that selling has little part to play in how business works – which of course is complete nonsense.

      Some recruiters can, and are selling exclusive, retained and outsourced recruiting models. The ones that can’t, will eventually slide into oblivion or be resigned to simply being passive administrators to the whims of whatever clients tell them to do.

  6. Mark Chote August 20, 2010 at 6:41 am #

    Having spent 23 years in NZ and Australia leading teams recruiting to the ICT sector I am guilty of accepting this for way too long! However, I’m not to old to change and we are changing!
    We are working with a passion to educate our clients that ‘multi-list contigent recruitment simply has too many flaws to serve anyone well. It starts with us having well reasoned discussions with our clients but we have to back ourselves first and foremost! My teams have my full support to walk away. They are good at what they do, they are the experts and they deserve reward for their efforts.

    This discussion deserves to be upfront and central in our industry!

    Stay on it Greg!

  7. Peter Bulman August 25, 2010 at 4:06 pm #

    Greg. I must support all the comments posted by your other respondents. Contingent recruitment is no more than a lottery that leads to embarrassment and frustration for all parties. As a contingent recruiter, I have been in the position of submitting a candidate with their full approval and with their assurance that they haven’t been informed of the posiiton. Later I have been advised by the client that they already have the candidate’s CV, much to the candidate’s, the client’s and my chagrin. What do you do, apart from quietly fume to yourself – and promise never to take on a contingency assignment again…sigh! Next ……

  8. Jan November 1, 2011 at 9:01 pm #

    Greg, I support your article to the heart, and having read all your articles in this subject, I take your approach all the time now to speak to clients the disadvantages of listing with more than 1 agency. Thank you, thank you, thank you.

  9. Dorothy Dalton October 27, 2013 at 8:04 pm #

    Greg – totally agree and refuse every time I am asked to work on this basis. Many candidates get angry with recruiters for transactional service. But in a high number of cases this is actually driven by unrealistic demands made by corporate clients who despite what they say, are not willing to invest in the process.

  10. Anne-Marie January 10, 2014 at 8:05 pm #

    It all comes down to how good your consultant is at walking away from a Multi listed role. Telling the client that “we don’t have the time to invest in noncommittal relationships” is one of the hardest things to say. A client should never feel that you are desperate for work and prepared to take any recruitment assignment on. The client needs to know that you ARE an expect and a specialist in your field and qualify it! More work needs to come from the consultant to build a relationship rather than just ambulance chasing any job, as this is what’s undermining our industry. Ask the client for an initial two weeks exclusive arranging and keeping the client regularly informed of your progress may be the way to go. And work like hell to find the candidate – take this on as your do or die opportunity. Gaining respect and commitment from a client takes time – walking away from a multi listed role and explaining way ensures your dignity is never compromised.

  11. Michael February 24, 2014 at 11:07 pm #

    I heard it from you 10 years ago Greg and I’ve just read it again now. As relevant now as it was then. Keep it up! 🙂

  12. Stuart Higgins August 31, 2015 at 12:10 am #

    Sadly, recruiting on a contingency basis more often than not requires the recruiter to collect as many ‘vacancies’ as they can. Success is then based on the law of averages and the right candidate falling into their lap via job board adverts. Sadly, most managers in my experience don’t recognise the importance of quality & targeted candidate sourcing and will push the recruiters to get more clients on board and more vacancies advertised thus increasing the chances of success through the law of averages.

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