How to handle maverick HR managers who attempt to negotiate fees after the interview process has started.

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Permalink Reply by Slouch on April 17, 2008 at 8:55pm

Do you mean that after you have submitted the candidate and they are close to making an offer they come back and want to lower the fees or just after you signed the fee agreement they say sorry, we need to lower it? This is a good discussion and the best thing to always say is no, I'm sorry, my work so far has been done based on the agreement we have in place.

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Permalink Reply by Kimberly Linford on April 17, 2008 at 10:08pm

I am a coroporate recruiter. I have had managers try to get me to renegotiate fee agreements in the middle of the process. Normally because of volume of positions the deparment hires. I tell them and the agency that after the first hire, I would like to negotiate based on volume of the hiring company, speed of hire (agency) and quality of candidates (agency). I have found this works for everyone.

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Permalink Reply by Johnathan Nazarian on April 18, 2008 at 10:58am

Asuming you are talking on a contingency basis....

I have politely explained that our fee is the standard fee and explain the benefits and value of working with us. I will then explain that based on the fact that we have already invested the time and money on this search in good faith, based on our established agreement, that it would not be fair for us to change that this late in the game. Furthermore, I would enlighten that all my other clients are paying the standard fee, or better, for my services.

If they are getting pressure from their superior I may offer a one time 10% discount on the fee (i.e., if fee is $20K, I would offer $2k off total fee, not a reduction in the fee percentage). Or, alternatively, if they reasonably show that they will use me for back to back placements, I will discount the second and third placements within a certain time frame (for high volume purposes only). I WILL NEVER permanantly lower the actual fee. Once you do that it is all down hill...give them an inch they will take a mile.

If they continue to haggle...do the takeaway. Tell them there are other clients willing to pay that same fee for the same calibre candidate...that you aren't desperate and not willing to invest the same time and money at a lower fee, unless they want to work on a retained basis - in which I would be paid for the time invested in the search.

A little hardball never hurt anyone, we are recruiters right?

As recruiters we just need to know the value of what we do...and be confident in that.

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Permalink Reply by Craig Pyle on April 18, 2008 at 2:30pm

Very much appreciate the comments everyone.... Deal will most likely end up closing and the comments now coming from hiring managers all seem to be indicatiing the HR manager stepped out of bounds in the process and came very close to blowing the deal.

My experience has typically been very favorable when partnering with HR so this particular scenario seemed some what out of the ordinary. I've also been on the HR side in professional services level corporations and understand how important HR is in the hiring process and the role they play to usually monitor a smooth boarding effort. In this case, lack of experience from Human Resources came close to costing this client the opportuntiy to board a very talented and sought after individual.

This experience has reminded me to be sure to ask hiring mangers what their expectations are of their firms HR in the hiring process. Often times the level of involvement from HR varies from driving the entire effort to simply being the ones to craft an offer and administer general boarding porcesses.

Thanks again for the comments - greatly apprecaited!

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Permalink Reply by Craig Pyle on April 18, 2008 at 3:49pm

Point well made - standing your ground. I believe Jonathan N. also commented a similar position of not giving in to any fee reductions after offers have been made or let's just say at the point where it is obvious the client is seriously interested in the candidate presented.

We all know it is HR's mission to negotiate a favorable agreement when it comes to fees but there is a time for those negotiations to take place and that is before any time is invested. I welcome negotiations on fees and crafting a good solid fee agreement before engaging in the search. You have to be savvy to HR tactics and understand they're trying to do their job too however when fee negotiations are tabled after interviews and offers have taken place, recruiters really need to push back with confidence and be prepared to take the deal away from the client.

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