Given equal amounts of effort, the more skilled your staff, the higher your production. But what is the most cost-effective means of increasing skills and production?

There are now a number of DVD and audio products available, some of which are excellent and others not. Many owners and managers possess great knowledge to impart. Yet without a solid foundation, critical information will be absorbed imperfectly, if at all. Thus, much of the time and cost of training will be wasted. That foundational knowledge can be most easily and inexpensively learned from the right industry-specific book. Yet this major benefit only scratches the surface of what your firm can gain from this indispensible tool.

Do you suspect you or your staff are not “readers?” Oh, yes, they are! You have just been trying the wrong books. Adult education is different from the school reading you remember. Adults learn best when they can directly relate the material to its intended purpose. A book originally designed for the insurance industry, as an example, will probably not be read or utilized by a non-reader. A book written in our language however – interviews, search assignments, candidates, closing, etcetera – most certainly will be. Let’s look at what such a book has to offer.

SELECTION

While the benefits of a good training manual and reference guide are overwhelming, perhaps the best initial use is before a new recruiter comes on board. The merits of a solid foundation on which to build for a new person are clear. Not so obvious, but even more effective, is the use of a book as a selection device.

The list of qualities that are desirable in a search consultant are numerous. Of them all, however, perhaps the most important is a strong desire to succeed and the commitment to work hard to do so. “The world is full of willing people,” said Robert Frost. “Some willing to work hard — and others willing to let them!” What manager has not invested massive amounts of time and effort in a new person only to find the desire to learn was lacking? The earlier this can be determined, the better.

A top-quality modern industry-specific book is the answer. Give the book to the new recruiter before he or she comes to work. Tell him to read, highlight, or underline the book, and to show up on the first day of work ready to discuss it. Date, sign, and inscribe the book (“To Bob … a future superstar”) to encourage the new person to do so. A motivated ambitious hard-working potential individual will do exactly that. A probable failure will barely glance at the book, and will certainly not underline or highlight it. How much wasted time, effort and money could your firm have saved if this methodology had been followed?

One excellent book for this purpose is the comprehensive book Search and Placement! A Handbook for Success by Larry Nobles. Visit www.larrynobles.com for details.

FOUNDATION

Any training given by the manager – lecture, demonstration, explanation – is far better received if there is a foundation of knowledge. Without such a basis, much of the explanation of the manager simply goes “over the head” of the new consultant.

What is a search assignment? Why is taking a thorough one important? How does one select the right candidate to present? Why is daily planning critical? What does “follow-up after interview” mean? Such basic questions as these may not be clearly understood by the new person, regardless of management explanation. Yet the new person may not ask for fear of appearing ignorant. Or the new recruiter may believe an understanding exists, yet in reality be unclear.

As a result, regardless of the quality of instruction given by the manager, the message may not get through. Imprecise understanding yields inadequate implementation. This leads to wasted time and effort by the manager, who will have to repeat, repeat, repeat over time until the light dawns on the new recruiter … if it ever does.

A good manager has a wealth of knowledge to impart to new people. But without some foundation, that knowledge will not be absorbed. A top-quality book written for our industry which is read and highlighted before the new person reports to work is the best and least expensive way of enhancing understanding.

SALES MEETINGS

Perhaps the best way of consistently improving the skill level and production of an office is a program of regular, productive, effective sales meetings. Most managers recognize this.

The time involved in organizing, planning and outlining a good sales meeting in advance from scratch, however, is substantial. A professional sales trainer will invest a great deal of time in preparation for even a short presentation. Yet most managers will try to conduct a meeting without any advance thought. Results of such a meeting will be meager.

Even arriving at the topics for a productive sales meeting is not easy. Repetition of topics leads to redundant subject matter, boredom, and little learned.

It is critical to separate information-swapping sessions from skill-improvement. A sales meeting is not a listing and discussion of best candidates or search assignments, or a recitation of current assignments. Such topics may well be indicated, but are not, strictly speaking, sales meetings and should not be blended with skill-improvement sessions. The purpose of a sales meeting is to improve production by improving the skill level of the individual recruiters.

The easiest least-expensive way to accomplish this is with the aid of a comprehensive, industry-specific book for each consultant. Here’s how it works.

Sales Meeting Format

What should be the format for the least expensive – in money and management preparation time – and most productive sales meeting?

First of all, every recruiter must have his own book. It is cheapness and foolishness for the manager or a recruiter to attempt to explain what is in a chapter. Maximum results can only be obtained by advance preparation by every participant. Reading and highlighting the material to be discussed is mandatory. Secondly, the chapters to be discussed must be stated in advance. The entire group needs a “track to run on,” not just floundering about on a subject.

Thirdly, in addition to highlighting, each person should put stars in the margins of the book, next to either a new idea or an important idea which is not being fully implemented.

Fourthly, in addition to discussion of what has been highlighted (or not) by individual recruiters, someone must take notes as to these new ideas for a later follow-up meeting. This can be easily done by simply marking a book in a different color, and the marked passages typed out and distributed for review. Don’t do too much. Three new ideas per meeting are plenty!

Finally, the meeting should end on a note of “what was left out?” A brief discussion of ideas not mentioned will give consultants a sense of creativity, will disseminate knowledge throughout the group, and will add surprisingly to the positive energy and confidence of the firm.

EXPERIENCED RECRUITERS

The problem with experienced people may be two-fold.

First, many who think they know this business actually learn just enough to get by and be productive. Expecially in a strong market, this lends to an inadequate knowledge of the industry and limited skills. These may be sufficient for a strong market. However, the result is reduced production and an inability to adjust to the changing market that will eventually be encountered.

Secondly, of course, people do drift away from good habit patterns. It is obvious that many people forget to implement the physical steps of success such as daily planning, desk organization, keeping track of appropriate numbers. What is not so obvious is that sales skills can also deteriorate. From the foundational methodology taught to new people to far more advanced techniques, rebuttals and closes, experienced people need ongoing reminders to maintain.

Finally and most importantly, new material and a sense of forward progress are essential to stave off boredom leading to deterioration.

Solutions

The most-cost effective tools to prevent or correct these situations is an appropriate book. Again, those who believe their people “don’t read” have simply not tried the right book. An in-depth well-written industry-specific book will be read, as it directly applies to day-to-day business.

The first step is a comprehensive training manual and thorough reference guide. This will be well-received if accompanied by the phrase an old manager once told this author. “Nobody is smart enough to remember all he knows!”

The strong likelihood is that such a book will identify areas that can be strengthened to increase production. But even a well-trained highly-competent recruiter will find things he used to do … but from which he has drifted away. The book must be underlined or high-lighted to enhance retention, and repeatedly reviewed. There is much much more to this business than a “foundation.” But even for experienced people, that is the place to start.

Once this step has been followed, more in-depth sophisticated material is indicated. There are definitely excellent sales-oriented DVD products available. A person who must commute some distance to work may find a number of good audio cassette products to be quite effective. However, the first and least expensive place to look is the right book.

This is an area where generic non-industry-specific books will be helpful: A visit to a large used-book store (or the Internet equivalent) will yield many books that will benefit anyone. The truly timeless works of Charles B. Roth, Frank Bettgar, J. Douglas Edwards/Tom Hopkins will be beneficial in improving sales skills.

GIFTS

Anyone who has been in a relationship knows that appropriate gifts at an appropriate time can significantly strengthen loyalty and commitment. This is as true in a business relationship as in a personal one.

There is no better business gift than a business book. Apart from the content, a warm and confident inscription (“with all personal best wishes for even more success”) will be a reminder of the owner’s belief in the recruiter every time the book is referred to (which will be frequently with the right book). It also gives the recruiter permission to underline or highlight the book, as no one will do so in someone else’s book. Mentioning that the gift comes with “strings” – that it must be highlighted while reading – will ensure maximum results.

If your firm does “splits” with other recruiters either through networks, franchises or on your own, you will find that an inscribed and autographed business book is an ideal tool to strengthen the relationship, and to ensure cooperation and good will in the future.

COST-EFFECTIVE

It is worth repeating that these massive and truly long-term results are available quite inexpensively. Even for larger firms, the total cost of appropriate books for each consultant is minimal.

The cost of selecting the wrong recruiter, of an inadequate foundation of training, of less-than-adequate sales meetings, or of not fully developing or challenging an experienced consultant is shockingly high.

When one compares the negligible cost of a book with the superb long-term reward, it will be clear that the right books for each person in your firm represent the best possible investment.

A 30-year veteran of our industry, Steve Finkel has consulted with hundreds of firms on four continents. He has been described by The Fordyce Letter as “universally regarded as our industry’s leading trainer” and by Recruitment International, Europe’s largest industry publication, as “the world’s premier trainer in search and recruitment!.” He is the producer of many excellent training products, including the best-selling and up-to-date book “Breakthrough!” Highly recommended. Mr. Finkel’s website is www.stevefinkel.com. He may be reached at 314-991-3177.

“If one cannot increase the supply of a resource, one must increase its yield.”

- Peter Drucker

What makes a recruiter successful in our business? Solid training leading to an outstanding skill level? Certainly! Yet what allows those skills to get results? Effectiveness. Time management. Planning. To think otherwise is to deny reality and the personal observations of any experienced person in our industry.

What is time management? Well, let’s talk about what it is not. Time management is not reducing the time of your individual business calls. To the contrary, most people’s calls are entirely too shallow and the length of the calls needs to be increased. Rather, a decent working definition of “time management” would be “spending the appropriate amount of time in the appropriate place.”

To some degree, everything done properly in our business is time management. Nevertheless, there are a number of areas where time management more directly applies. Let’s discuss them one at a time.

A) Select Search Assignments Correctly

In a good market, you’ll get lots of search assignments. But the more you get, the more you have to choose from. And the more likely it is that you’ll select the wrong one. It’s too easy to get distracted and do a shallow selection job, especially with an existing client!

Working on the wrong search assignment costs you more than the time and money wasted. It costs you the new searches you could have had if you had been concentrating on finding more, instead of trying to fill a bad one. Moreover, filling a mediocre search assignment is tough in any market.

There are three different classifications of searches, and the classification tells you how much time to invest. They are:

Class A – Worth conducting a full-scale recruiting effort
Class B – Worth doing a file search only
Class Q – Source company – not worth working at all

To a great degree, being able to separate the three types is what will determine much of your success. What specifically are the criteria for a Class A search assignment? There’s no point in repeating information here you can get elsewhere. You’ll find this in Volumes I and II of “The Art of Recruiting” video/DVD series by this author. The tendency will be to relax your standards in this area. Don’t give in to this expensive mistake.

B) Improve Selection of Face-to-Face Interviews of Candidates in Your Office

If you work a local market or if you run ads for candidates, either in the newspapers or on job boards, you’ll be besieged by people calling you wanting to meet with you personally. If you agree to meet with more than a small percentage of these people, you will be throwing away massive amounts of time and money. If you interview people in your office as a routine practice, ask yourself this question: What percentage of the people your firm brings into the office ever get sent out on an interview?

Many firms, of course, never interview a candidate face-to-face, or even work a local market. If you do, have your secretary pull 50 candidates at random that you’ve interviewed in your office and answer the above question for you. Unless at least one-third of the potential candidates you meet in your office get sent out, you’re wasting lots of time interviewing unplaceable people.

Screen much more tightly; there’s no reason to interview people personally unless you have something for them right now. Have them send you a résumé. Should something come along, you can always call them and bring them in when you need to. But don’t let everyone who calls waste your time with a face-to-face interview. There’s just no point to it. And consider learning to recruit effectively. You can do much better than running ads in newspapers or on job boards.

C) Spend More Time Planning

There really is no question about it. Time spent in planning is time well invested. An hour of “planning” and seven hours of “doing” will yield much better results than eight hours of seat-of-the-pants frenetic activity. Yet do you plan correctly? Or enough?

The problem is that in a strong market, there is an equally strong tendency to drift away from the habits that will maximize your income, such as correct planning. You’d better get back to those habits – or learn them to start with – if you want to survive in a weak market or maximize your production in a good one.

Planning as it relates to a desk – not necessarily running the firm – is of two types. Long term and short term. Long-term planning, as it’s used here, is anything other than daily planning. This means annual, quarterly, monthly, and weekly. Short-term in our business means daily planning.

A concise recruiter’s version of desk-oriented long-term planning is contained in the new book for experienced recruiters entitled Breakthrough!, Chapter 18, “Managing the Process.”

As it relates to daily planning, let’s restate the obvious first. Daily planning should be done at the end of the day, not the next morning. That’s standard industry knowledge. That certainly doesn’t make a concept automatically correct. In this instance, however, it is.

Secondly, you should think about what makes a good daily planner. To be effective on an ongoing basis, a daily planner must dominate your day. The best way of making sure it does that is for it to dominate your desk – all the time. This means it should be big. Blotter size (on a pad) is ideal. A jazzy little spiral-bound notebook looks nice, but it’s awkward to use. In fact, it’s rarely used, because it’s so comfortable to keep it closed and so uncomfortable to keep it open. This is not what you want. A blotter-sized pad may not look as stylish, but you’ll use it.

A correct daily planner should prioritize your activities, shape your day, not just fill it up with “things to do.” Regardless of what kind of daily planner you use, it’s the order of things that will make it effective. There should be numbers on your planner also (1, 2, 3, 4) to remind you of this.

It cannot be mentioned too strongly that you must fill out your daily planner. This means writing out the names of candidates or firms you will call the next day to achieve your goals. Simply having a stack of cards or a computer printout/screen is inadequate. Writing things out in your own handwriting the night before engenders commitment to do what you wrote out! It also means that you cannot hide from yourself throughout the next day! The end of the next day should see you with a fully filled-out planner with lines drawn through the calls you have planned and made! If this is the case, you will go home with a solid feeling of satisfaction, even if those calls have not yielded the hoped-for results. At least you will know you are doing the things you should be doing to achieve success.

There is a great psychological benefit to writing things out. Stacks of cards or computer printouts or screens afford no such benefits. That’s why trying to use a computer screen as a planner doesn’t work well, any more than stacking cards on your desk would.

Planning, both long term and short term, isn’t really something that takes time. It’s a process that allows you to utilize the time you do have available with the best possible results. Correct planning will enable you to do so.

The specifics of how to fill out a daily planner, and the correct order, and what should be there can be obtained in the aforementioned new hardbound book Breakthrough! or, from a different perspective, the excellent foundational book Search and Placement!, by Larry Nobles (www.larrynobles.com).

D) Color-Code All Forms

Take a look at your desk at the end of a day. Pretty messy, huh? Now look at the colors of the papers on your desk. If you’ve got a preponderance of white papers there, you’ll find that color-coding will help you to organize your desk with no extra time, cost, or effort.

What colors are your standardized forms? All white? No good. Change the colors. You’ll not only render each form immediately identifiable, but you’ll organize your desk a lot more easily as well.

Do you have a formal search assignment form? So do I. It’s yellow in color. Do you have a standardized recruit form? Mine is blue. How about a reference check form? I use a peach color. Or how about – but you get the idea.

Forms should be standardized. They should also be on pads, and each should be its own distinct color. The actual color you use doesn’t matter, of course, as long as it isn’t so dark as to obscure the handwriting on it. Pick your favorites. Colored paper doesn’t cost any more than white paper, and its use will enable you to organize your desk a lot more quickly and easily. If this seems minor, look at your desk at the end of a hard day, and you may re-evaluate the significance of a neat workplace. Anything that takes away from optimum effectiveness needs to be corrected. Desk organization is a complex and important topic. Color-coding your forms will help a lot.

E) Study Time Management

Surprisingly, one of the negatives of a strong market is that you will not be forced to improve your habit patterns and methods of working a desk. As Samuel Johnson once said, “Depend upon it, sir. When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully!” Recruiters who start in slow markets are forced to develop good habits to survive; those who start in a strong one will frequently lack good habits of planning. Which one are you? Better skills in this area will help you enormously in any market.

Industry-specific books will contain much on this subject. But you should also read books on time management and planning. How long since you’ve read a book on those subjects?

Following are three books you should buy and read, underline and implement:

Working Smart, by Michael LeBoeuf
How to Get Control of Your Time and Life, by Alan Lakein
The Effective Executive, by Peter Drucker

It is important to recognize that there is a great benefit in addition to the valuable knowledge you’ll gain from these books. Simply reading (and thereby focusing) on the subject will bring you to a greater awareness of its critical importance. The greater your awareness, the more attention you will pay to the management of your time throughout the day.

F) Eliminate Personal Calls, Conversations, or Activities During Business Hours

You can see it in every office, including one-person operations. Some people put in their time. Others are there to accomplish, to achieve, to improve, to produce, to win. The difference, to be blunt, is a matter of discipline.

Personal telephone calls, incoming or outgoing, are simply an example of this lack of focus. In no way is it suggested that such calls have to do with illicit activities. To the contrary, most such calls have to do with perfectly normal and even praiseworthy involvements – hobbies, friends, family, organizations. The problem with such calls during business hours is twofold. One is the amount of time they take. Left unchecked, such calls will grow to excess. The greater cost, however, is not the actual minutes (or hours) such calls steal from production. Rather, the greater cost is the degree to which these calls reduce the overall intensity of your business day.

This concept is best explained in an outstanding book by Peter Drucker entitled The Effective Executive. Drucker, in case you’re not aware of it, was a management consultant so impactful that the best book about him, by John Tarrant, is entitled Drucker: The Man Who Invented the Corporate Society.

The point made in The Effective Executive is that accomplishment is best achieved through blocks of uninterrupted time. Every activity has three phases: the start-up, the doing, and the wind-down. The start-up and wind-down periods are essentially constant, regardless of the time spent doing them. Thus, a one-hour time block and a 15-minute period have close to the same time allotted to starting and ending. The “doing” time, however, is very different. One hour of uninterrupted time, according to Drucker, is worth not 4 but 10 times that of four 15-minute segments – because the “doing” time has increased by that much. It is not solely the time you spend on an activity that allows you to achieve; rather, it is the amount of concentrated intense “doing” time that yields accomplishment.

Allowing a constant or even occasional stream of non-business calls during business hours does more than take time; it forces an equally constant stream of new start-up and wind-down periods, and thus greatly reduces what you actually achieve.

The same principle is true regarding conversations within the office. Some people work with intensity for an entire day. Others wander around the office bothering others with silly business questions or discussions of evening activities, sports, or politics throughout the day. Which one do you think accomplishes the most? Which one are you?

If you’re forced to admit that you identify more with the latter person than the former, then you’d better make some changes. It takes skills to do well in our business. But it takes focus and intensity, too. Lack of either will cause you to fail.

How to Reduce These Time-Wasters

Here’s how you eliminate the incoming personal calls that cost so very much. Tape a small card to your phone with the following heading in red: “Personal calls steal time and intensity.” Underneath, put this question and this phrase:

1) Is this an emergency?

2) “You’ve caught me right in the middle of an important business meeting. I do want to speak with you. May I get back to you this evening?”

Clearly, there are a very, very few calls that really do require some sort of immediate action on your part. First, determine if the call is a genuine crisis. If it isn’t, just say the words listed above in #2. Rarely will anyone continue talking after you say these words. Used whenever a non-business call comes in, this little two-step process will very quickly cause such calls to stop reducing your time and intensity during business hours.

Forget “multi-tasking.” It takes concentration to accomplish things. There is no reason you cannot set up a special ring on your cell phone for critical calls if you must. But the best choice may be to turn it off! Your secretary will tell you if an isolated call is critical if you tell her up-front.

The same small card, altered slightly, will also help you to end the continuous stream of chatterboxes and time-wasters who afflict so many offices. This is a particular problem where the manager has made the mistake of having an office layout consisting of private offices. Still, any multi-person firm can suffer from this problem. That doesn’t mean you have to, however. If you’ve been allowing these convivial time-wasters to reduce your intensity and production, you’ll have to take steps to re-train them. Here’s how:

Just alter the words on the small card on your phone a bit. Have it read: “Personal Calls/Conversations Steal Time and Intensity.” Then add under the 2 (see above):

a. “I’d be happy to talk with you about that after work, but right now I’ve got an important assignment that I’ve just got to get filled!”

b. Pick up the phone and make a call!

G) Get Nonessential Reading Material Out of Your Office

How much reading do you do in your office? If your answer is “not any; I do all my reading at home,” you’re doing it right. But if you reply, “Well, there’s the Wall Street Journal, and industry publications in my niche, and my regular newspaper, and . . . ,” you may be spending a lot of time reading when you should be on the phone! Many people use reading in the office as an excuse for not staying on the phone. Make sure it isn’t you. Reading is important. But do it at home.

H) The High-Tech Time Waster

Thomas Edison had a sign behind his desk for many years to which we should all pay attention. It said, “Some people will go to any lengths to avoid having to think.”

If you’ll substitute “pick up the phone” for “think,” you’ll have identified a great deal of the real appeal of the Internet. Mediocre recruiters or new people love the Internet. Why? Because it is a lot easier than working for a living!

The truth is that it’s a lot of fun to be hopping around in cyberspace, clicking your mouse, pointing it here and there, watching the computer bring up neat images like magic. Almost like a video game. It isn’t so much fun to be out there selling sometimes, asking real people for names of good candidates, recruiting, making marketing calls, sometimes being turned down, people not returning your calls. People who lack either skills or discipline will indeed go to any lengths to avoid rejection and frustration.

Once upon a time, the Internet as a means of identifying potential candidates may have had some merit. That, of course, was before Net growth slowed dramatically, before unemployed candidates started flooding the for-free and for-fee job sites, and before Internet “trainers” realized that your corporate clients would pay better than you, and started focusing on helping your clients avoid paying your fees. As Mike Kappel, president of Top Echelon Network, has written, “The Internet honeymoon is over. The Internet is now known to yield second-rate candidates. Fire up that telephone.” So true. Or as Mutual Funds Magazine has said, “Live by the tech; die by the Tech!”

The problem is that this once-trendy but now-dated concept of Internet hustling for candidates has left us with a major handicap in achieving our financial goals – that distracting mechanical box on your desk. Even if you have avoided getting involved in playing actual computer games, there is a real probability that you have not escaped other addictions relative to the Internet.

A recent Robert Half International survey found that 60% of executives said that time spent accessing the Web for non-business purposes was undermining their employees’ effectiveness on the job. Consider the following:

- 70% of all stock trading occurs from 9 to 5.

- A Nielsen survey found that the majority of online shopping, auctions, and news reading takes place during working hours.

- 70% of all Internet porn traffic takes place during business hours – but I know this isn’t you.

- A recent Men’s Health magazine survey of 2,000 employed subscribers asked the following question: “What distracts you from your work?” The most frequent answer (74%): The Internet.

It is noteworthy that the recruiter message boards that infest our industry have seen a drastic reduction in messages and traffic; apparently those who once had the time to peruse and add to the chat boards are out of business or have decided to pay attention to business. Why do you think that is the case?

So what’s the answer to this modern high-tech time waster? Easy; get the heck off it!

First, change your computer so it does not automatically hook up to the Internet. Then, don’t access it until 5 p.m. This does not mean you should not utilize your database of candidates if you are computerized; it means stay off the Internet. Shut down your email. Turn off your instant messaging. Deal with it post-prime business time. What do you think would happen without the distraction of the Internet during working hours? Chances are, with all that extra time and reduced distraction on your hands, you’d pick up the phone and make phone calls. And more money. Maybe you should try it and see.

Is This Important?

Make no mistake; this is a sales business and it is a skills business! Being terrific in these areas, however, while having major weaknesses in time management and planning, just doesn’t make sense. A small amount of effort here will yield major dividends with no extra time spent in the office. That’s a pretty good trade-off for the minimal investment of time spent to develop the proper habits.

A 30-year veteran and best-selling author in our industry, Steve Finkel has been referred to by Recruitment International, Europe’s largest industry publication, as “the world’s premier trainer in search and recruitment.” The producer of many excellent training products, he has conducted in-house training programs for over 400 firms on five continents, with 85% repeat business. His new totally up-to-date 360-page book Breakthrough! is considered to be the definitive work for experienced recruiters. For complete information visit his website at www.stevefinkel.com or call (314) 991-3177.

What financial arrangements do you have for “fee splits” within your office? If the total fee is $10,000, and consultant A obtains the Search and consultant B obtains the Candidate, how is credit for that $10,000 fee divided?

50-50, right? Five grand credit each, at whatever commission structure you might have? That’s the way (virtually) everyone does it! But here are two intriguing questions for you. Why? And if you changed it, what would happen?

The answer to the question “Why?” is obvious: “We’ve always done it that way.” What does “always” mean? It means always – and that means since the days of APF (Applicant Paid Fee)! Surprisingly, today there are many in our business who do not realize that while our business has certainly evolved, we come from a historical background of APF. Until the early 1950s, 100% of our industry was APF. And as recently as the late 1960s, the majority of our industry con-ducted business in this manner. What has this got to do with you? It is the reason you have always been taught that a 50-50 fee split is correct!

Consider the fairness of that structure in an APF environment. The company does the hiring; the applicant pays the fee. Their worth to the consultant is equal. In that market, a 50-50 split makes a lot of sense.

But times change. Today there is, practically speaking, no APF business. Why? Well, decades of good salespeople selling EPF (Employer Paid Fee) to corporate hiring authorities have had profound consequences. Then, too, the rise of recruiting as a source of higher-quality candidates than could be obtained through newspaper ads and job boards/trolling the Internet has resulted in a superior product to sell. The sale has been made. It is an EPF business.

And how do we split our fees today, if consultant A has the candidate and consultant B has the client? 50-50, the same way we’ve always done it!

Let’s take a look at an option, a different way of dividing credit for the fee (at the usual commission rates), and see what the results might be.

Fairness

It is generally agreed that when consultant A has the client and re-activates or is given a candidate from consultant B, then consultant A (who has the search assignment) should put the deal together. The loss of effectiveness in communication would be significant were it otherwise. Peter Drucker’s Information Theory, that “every additional relay doubles the noise and cuts the message in half,” absolutely applies in this instance. Critical information would surely be lost were it done otherwise.

Accordingly, the consultant who has the client should present the opportunity to the candidate, present the candidate to the client, follow up with candidate and client, close, everything. The consultant who has the client does the work.

All of it? No.
Most of it? Yes.

It is only fair that the one who does the work gets the fee. All of it? No, because another
consultant recruited the candidate. Most of it? Yes. How much? Try 75% to the consultant who puts the assignment together, 25% to whoever recruited the candidate.

Why? Because it is fair.
The Best Results for the Client

The problem with the old “50-50″ split is that it makes one candidate worth twice as much as another! If you submit a candidate of your own and another originally recruited by someone else, your candidate yields a full fee to you if hired; the other candidate yields only half a fee for you.

Under these circumstances, many consultants will try to subtly shift the emphasis to their own candidate. This does a disservice to the client, who should evaluate candidates free from bias on the part of the consultant. Yet if a fee will be $20,000 to the recruiter if candidate A is hired and only $10,000 to him if candidate B is hired, the tendency is strong to attempt to influence the hiring decision.

But what if the search consultant would get 75% of credit for the fee if candidate B were hired? Would he then risk the entire placement for 25%? Probably not!

The client thus receives what they should – an unbiased presentation and follow-up on all qualified candidates.

Increased Utilization of Candidate Inventory

What manager of an existing firm has not been frustrated by consultant reluctance to “work the files”? It is an often-stated maxim that “there is more money in those files than you will earn in the next five years.” This is quite probably a true statement. Yet is the back inventory of candidates utilized to its fullest extent? Nope.

The purveyors of computer software products will claim that time- and money-absorbing computerization of files will correct this. They are wrong. The problem lies not in paper vs. computer screens; the problem is that when a search consultant places a candidate recruited by someone else, he is working at half price! And yet the same manager who would laugh at a client who offered half a fee expects a recruiter to willingly accept it!

What’s the answer? Seventy-five percent for the person who puts the deal together! Do you want your back files worked? Fine! But don’t expect a 50-50 split to accomplish it.

Increased Number of Clients

There is one thing that will allow a firm to increase production and avoid inconsistent performance and slumps better than all else – having lots of quality clients, which are continually upgraded as a result of a greater quantity from which to choose.

Yet a weak consultant who does not possess the skill or the tenacity to obtain or develop clients can get by financially in a strong market by only recruiting – if there is an old-style 50-50 split.

The problem with doing so is that a weak consultant will never develop clients on his own. He becomes a “feeder” of more competent people. This may be a good starting point for new people at some firms. Un-fortunately, however, two things will happen. First, the manager will keep the inept “feeder” on board too long while emphasizing too late the need to develop clients. Sorry. The “feeder” consultant will eventually fail after going heavily into his draw and costing the firm money. That’s because he’ll always have a strong tendency to recruit to the exclusion of client development. Second, the clients that could have been developed had the consultant been economically forced to do so will have gone to other firms.

If the cost of candidates had been only 25%, the consultant could not have “got by” by doing less than half the job. He would have become a real consultant, and the firm would have enjoyed additional clients and revenues. Try it and see.

Correct Marketing Emphasis

Peter Drucker once wrote that “the purpose of business is to develop a customer.” Certainly there is no intent to commit the heresy of criticizing Dr. Drucker. (When a professional business consultant refers to “St. Peter,” he is referring to Peter Drucker.) However, in our business, we might expand that statement a bit: The purpose of our business is to develop a repeat customer.
Read that sentence again. The strongest bulwark against difficult times and the best asset to maximize business in good times is a solid and continually expanding quantity of serious, high-quality repeat client companies! We all recognize this. Yet, if you are a manager, remember the first rule of motivation – you must reward correct conduct!

If you’ve been having trouble motivating your people to expand and upgrade their client base, if your firm could use more serious repeat clients, then you should ask yourself a fundamental question: What kind of behavior have I been rewarding?

How do you get more and better clients? Pay your people for developing them by sending a clear signal! What kind of signal? How about 75% of the fee for obtaining the search assignment and putting the deal together?

That is how you increase production – in good times or bad!

So let’s see what might happen within the office if a 75%-25% split for the candidate were instituted.

The Benefits

First, it would be fair. After all, the consultant who puts together the placement surely does at least 75% of the work. That person should get 75% of the fee.

Second, it yields for the client an objective presentation of all candidates and increased quality of work by the recruiter through-out the hiring process. Why? Because the search consultant is dealing with candidates of roughly equivalent worth, rather than candidates at both half the commission (the “split” candidate) and full commission (his or her own recruit).

Third, the entire office would utilize the back database inventory of candidates far more. Why? Because they are not being asked to work at half price when they do so!

Fourth, the firm would see additional clients brought in by those “feeder” consultants who only recruit for others. An appropriate split-fee arrangement means they would no longer be able to survive financially by doing so. Thus, they would have to go out and develop some clients – or get out of the way for more competent people.

Finally, a 75%-25% split sends a clear signal to your staff: that long-term business success is achieved by accumulating many repeat customers; that you want your people out there marketing your firm and developing accounts; that they need to put together completed searches; and that you will pay them for doing so!

Once upon a time, a 50-50 split was right for our industry. The applicant paid the fee! That was why they were worth 50%! But do you still work an APF market? No. So why do we still have a 50% split? Because we’ve always done it that way!

Come on. We can do better. Try it and see.

Steve Finkel has been described by Recruitment International, Europe’s largest industry publication, as “the world’s premier trainer in search and recruiting.” The producer of a full line of excellent training products in DVD, audio, and book format, he has conducted hundreds of in-house training programs on five continents, with 85% repeat business. For complete information, phone (314) 991-3177. Website: www.stevefinkel.com.