Why recruiters undersell themselves by charging low fees?

Hiring the right talent usually is a complex decision making process which takes significant effort, time and is not an easy task at all. Despite the product, investment, idea that goes into making a successful business, hiring top quality talent is the single biggest differentiator for all companies that make it or don’t. The Indian job market is highly competitive today and with the emergence of new age, technology oriented businesses the war for talent has only intensified. Within this context, when the talent is available it usually is challenging to identify the best from the rest. Clients realize this; therefore, they are willing to shell out premium fees to recruiters to bring them the best talent available in a highly fierce market. We have had numerous examples to quote where our clients were more than happy to work with us on slightly premium fees, because of the value we added in the hiring process.

This leads me to ponder: why recruiters sell themselves short in spite of the business willing to pay for good talent. Is there a validation for the work recruiters do? Do recruiters value the time and effort they invest in sourcing and recruiting talent which is rare and needs indepth industry expertise to be recognized and recruited?

Here are a few reasons as to why a recruiter may settle for a mediocre fee:

  • All recruiters and recruitment firms are not the same, some use a use more effective methods to source right fit passive candidates as well as recruit them than the other recruiters available in the market. The absence of a system and methodology that sets a recruiter or the recruitment firm apart from the rest could be a reason
  • A recruiter may not be fully versed with of the recruitment methodology they use to acquire talent. As a recruiter, you have to be convinced of the service you are selling. The brand, the process, the values of the brand, the techniques….all of it. Its simple logic only if you are convinced with an ideology, can you sell it to another person. The same applies to a recruiter being convinced with his recruitment methods as well as his skills as a recruiter to identify and attract ‘A’ listed talent.
  • Recruiters usually work on targets, every quarter recruiters have to meet a certain amount of billing which comes from placing candidates. This could be one of the reasons why recruiters may agree to work on a lesser fee, for the fear of not losing out on his/her billings. This also means he will try and fill the position quickly, not adhering to procedures, so that he can close the position as soon as possible and meet his target. In such a scenario, the recruiter is helping you fill a position but the question is – Did this result in a complete scan of the talent market
  • Networking is a very crucial part of a recruiter’s daily routine. This helps him create a strong pipeline of exceptional candidates. Most recruiters do not want to spend time knowing their candidates or building a trust worthy relationship with them. Most recruiters find this exercise to be tedious, time consuming and hence they do not network enough and therefore end up with a weak pipeline of candidates picked up on job portals who may not be the best and that may justify the low fee they charge.
  • Another key reason could be low self-worth or low self-esteem. A recruiter may feel he is not worth or his capability as a recruiter is not good enough to demand a high fee for the work he is doing. Lack of self confidence in ones work or in self is a major reason why recruiters fail to quote fee they and their work deserves. Low self-esteem can prove fatal not only to a recruiter but also his client. Ambitious, successful recruiters are optimistic, committed to excellence and absolutely convinced of their service.
  • The next most critical point is niche specialism. Let me give you an example, if you have a heart ailment, you wouldn't go to a general physician you would opt to see a cardiac specialist, correct? Now it’s obvious that their consulting fees will differ as well. A cardiologist will charge much higher compared to a general physician simply because he is a specialist. Similarly a niche recruiter will charge more than a general recruiter simply because of his indepth industry knowledge, access to the best talent in the industry, understanding of the skills needed to excel in the industry etc.

Over the past 10 years of having made 3000  successful placements I have worked only with  clients willing to pay a slightly higher premium. At first they were skeptical however like with most others they too realized that at Antal we bring more depth to the hiring process and compliment the Talent Acquisition team beyond expectation. This does not mean we have been successful all of the times, after all we are human.

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