How to Go From Recruiting Commodity to Trusted Advisor - the Road to Exclusives and Retainers

Nov 04, 2020

From my experience, most recruiting firms deploy business development tactics leading to getting  stuck in what I call the “commodity dilemma.” This is the problem you face when your clients and prospects treat you like you’re interchangeable and easily replaced. Can you relate to this? You know you’re caught in the commodity dilemma when you frequently experience one or more of the following:

  1. Working contingency searches with multiple competitors
  2. Lack of upfront money/retainers that demonstrate client commitment and collaboration
  3. Fill ratios less than 40-50%. The lower your fill ratio, the more you’re commoditized
  4. Clients try to fill the same positions you are working on
  5. Clients don’t schedule interviews for submitted candidates who fit their specs
  6. Clients rarely alter their specs, compensation, or hiring process when you identify problem areas

These are some of the common symptoms of being placed in the commodity bucket. I know I always hated feeling like a commodity. How about you? The good news is that many recruitment firms have successfully successfully “decommoditized” themselves as a recruitment industry best practice. They’ve developed skills and knowledge to become valued, respected, and well-paid trusted advisors. This is part of creating a “differentiation recruitment strategy.”

How to become a trusted advisor

I train and coach my clients in recruiting industry best practices to become "trusted advisor recruiting firms". Their success rate and recruitment fees improve dramatically. Here is an overview of that process:

  1. Know your client avatar (ideal client) – You need to know who your ideal clients are. Some factors to help you decide on who your ideal clients are include industries, occupations, company size, demographics, psychographics, hiring processes, how they view recruiting firms, etc. Think of your worst and best client experiences. List the key characteristics of each that made them the best and worst. Working with the worst clients wastes time, money, and emotional energy. Focus your marketing and sales efforts on the best ones.  If you are struggling with how to categorize and reach your ideal client, reach out to someone who can help you develop niche recruiting strategies.  
  2. Clearly articulate the characteristics that make you unique and how this helps your prospect. This includes specific knowledge, skills, experience, and uncommon accomplishments. What particular industries or occupations would you have a competitive edge with due to your unique selling features? Put this in clear, concise writing, and practice saying it aloud so that you can speak it with authority. Avoid saying the same things that your competitors say (e.g., we will proactively search for passive candidates, work harder, screen more thoroughly, etc.). 
  3. Utilize a lead generation process that differentiates your firm. If you are cold-calling and aggressively pursuing companies to work with you, your approach screams salesperson/commodity. The most effective recruiting industry business development methods start with consistent, high-quality marketing that paints you as a trusted advisor/expert. A trusted advisor and a salesperson are opposite ends of the spectrum regarding how clients see you.
  4. Ask consultative questions. The quality of the questions you ask is the most significant differentiator of trusted advisors vs. commodity recruiters. Become skilled at asking open-ended who, what, when, where, why, and how questions. These are distinct from close-ended questions, which are answered with yes and no. When clients and prospects tell you about challenges, ask for examples to ensure you truly understand. This also allows them to re-create their pain, so it’s real rather than conceptual. 
  5. Perform a quality diagnosis of the prospect’s hiring need. This includes clarifying the consequences they face if they stay in their current path and don’t work with you.
  • What’s the problem the client is trying to solve? This is the actual business problem, not the hiring need
  • What are the consequences to your prospect if the problem is not solved (actual costs financially and personally to the hiring manager)?
  • What’s the profile that will help solve this problem? This provides you with an understanding of the solution to their business problem. It replaces the typical mindset of focusing on a job title and description.
  • Processes– This includes everything they typically do to make this type of hire. Your job is to understand their processes and ask good open-ended questions to potential problem areas. This approach enhances their perception of you as a valuable problem-solver.

 5. Demonstrate the value you provide: Layout your process in a step-by-step manner that communicates the value you deliver. Help them understand that you invest significant skill, money, and effort that most recruiters don’t. You want them to realize that you’re justified in requiring an exclusive or retainer to execute your process. 

  1.  Explain the three different models for recruiters to get paid:
  • Traditional contingency (non-exclusive)- explain that model, along with the plusses and minuses, so that they can see that this is not in their best interest.
  • Large, national retained search firms – explain how they work. Your clients are unlikely to engage them and will hopefully see your more moderate approach as reasonable.
  • Engaged or “container search” with a moderate upfront investment or at least an exclusive. Explain how this works and why it is the best of the three options for both parties. When communicated well, this becomes a viable option that your ideal prospects will likely choose.

 7Proposal– Confidently declare your recommendation. Say it with confidence and conviction because it’s a true win-win.

 8. Compare your fee to the size of the problem they are facing the problem. Include the cost of wasting their time and effort, making a bad hire, and delaying the hire due to using a “commodity recruiter” approach!

In summary, moving from a commodity recruiter to a trusted advisor requires a shift in mindset and skills that occurs over time. You move from an “order taker” to a value-added advisor where you are set up to succeed while delivering superior results. Are you ready to make this move?

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