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When negotiations go bad, who really loses out ?

As regular followers of this blog will know, I work as a Rec-to-Rec consultant (i.e. I recruit recruiters for recruitment companies – say that after a few glasses of wine!). I recently received a call from the owner of an agency explaining that he had heard good things about me and could I meet with him to discuss helping him find new consultants. As always, I was upfront about my fees and in return for some commercial advantages and as a gesture of good will I agreed to a 1% discount, which was subsequently confirmed in an email.

 

So off I toddled the next day to his offices, which were very smart and based at the expensive end of town (..obviously he was not short of money). Considering there is a chronic shortage of experienced consultants in the market, my advice was that he should consider individuals at a more junior level as long as they displayed the right qualities. I offered him that advice because it made sense and he agreed.

 

The following week I sent him John’s CV. Although John only had 6 months experience he was very bright and I was confident he would develop into an excellent consultant quickly. I knew this because I had interviewed John thoroughly and already taken a reference. My client was happy to interview him and the very positive feedback after that first meeting indicated that he thought the same. Both parties were keen to take things forward so a 2nd interview was set up for the next day and again the result was very positive. So far so good.  

 

Then the trouble starts:

 

"John is good but he is not very experienced so is going to take a lot of training"

(Yep, you knew that and that is why his salary expectations are very modest).

 

"I also have a couple of other candidates I am speaking to who I have sourced myself"

(Funny, you didn’t mention that before)

 

"I am interested to take him but I don’t want to pay much of a fee, in fact I will only pay $2k"

(approx an 80% discount !)

 

"And I wouldn’t want to pay him more than $..k"

($10k less than he asked for )  

 

I instantly lost all credibility for the client. Firstly, for trying to negotiate a ridiculous and unrealistic discount on fees at the back end of the process (that I am certain he would never agree to do with his clients). Secondly, for trying to under offer a good candidate that he wrongly thought he could take advantage of. Thirdly, for the aggressive and patronising manner in which he did it.  

 

Normally I would have walked away there and then. However, I like John and the last thing I wanted to do was stand in his way of securing a role with a company he liked. So I agreed to meet the client half-way. My caveat was that he would have to make an offer by the end of the day. It got to 5pm (Friday) and nothing - he had not even been good enough to come back to me.  

 

This is not sitting very comfortably with me and neither is it sitting comfortably with John (I told you he is a good bloke). So we agreed that before I left for the weekend I would speak to some other clients who may be interested in him. Unsurprisingly in this candidate short market there was interest and to cut to the chase, by the end of the following week John had an offer at his desired salary. Fees had already been agreed with this client and there was no attempt to negotiate us down. I had still not heard back from the original client so I emailed him (admittedly with some delight) to advise that John was now off the market. I was surprised by his response:  

 

"What if I had wanted to offer him a job"

(Well you should have done then, and not been so bothered about trying to get something for nothing)

 

"I find this rude and unprofessional"

(Do you really !) 

 

So the upshot is that a guy who has a need for consultants, and will continue to struggle to find them in a very tight market, loses out. Furthermore, his behaviour during the process means that he now becomes a source of candidates for me to headhunt. All because he wanted to get something for nothing and thought as the client he could call all the shots.

 

Footnote:

One of the principles of any successful business is the need to keep costs low. Good business leaders should always be prepared to negotiate a more favourable price. However, in any negotiation there is a critical point at which the price becomes too low and the vendor (recruiter) will walk away. If a client’s reluctance (or stubbornness) to meet the recruiter at a fair price, and negotiate in a professional manner, means they miss out on someone that would have added value to their business, surely that is not good business leadership

Views: 1802

Comment by Amber on September 6, 2011 at 10:40am

In this case, sounds like it was the client who lost. These scenarios are always negative for the recruiter or agency who finds themselves working with a less then desirable client (hopefully, at the point this is realized, the client is let go) and usually not good for the candidates. This client did not act professionally in your scenario, and it sounds like you handled it all excellently.

Clients do "call the shots" in many aspects, but as an independent recruiter I'm glad I have the option of who to work with!

Comment by Suzanne Levison on September 6, 2011 at 11:10am

Agree with Amber. The client lost.
Comment by Bob Petersen on September 6, 2011 at 12:35pm

It is clear the client lost in this incident.  But the client was not honest with what they wanted to do so they set themself up to lose from the start.  It also shows the kind of manager they are going to be. 

Comment by Valentino Martinez on September 7, 2011 at 4:28am
Everybody loses when negotiations go bad.  Really.

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