Financial services firms are “cautiously optimistic.” Demand for execs in life sciences is increasing. Retail companies are looking for people who can integrate online and offline sales. Energy companies worldwide are searching for C-level talent, but are a little more cautious in the U.S.

More on the survey here.

What’s Hot

In order, these sectors have the the highest levels of recruitment at the professional and managerial level 1) Pharmaceuticals; 2) Manufacturing; 3) Engineering; 4) IT software; and 5) Banking. (More info.)

What’s Not

Education and shipbuilding.

Who’s Hot

India, UK, Nigeria, and Russia. (More info.)

Who’s Not

Spain and Hungary.

These are great questions that require time and attention, but when? Now. Now is the time to be building your strategic and tactical sales plan for 2010. From my sales leadership experience I always found that a strong Q1 always set the tone for the remainder of the year. The activity and foundation you lay down in Q1 sets the table for the rest of the year. Here are my thoughts on developing your strategic sales plan and underlying tactics that support that plan.

First, a few thoughts on developing your high-level sales strategy

Developing Your Sales Strategy

Here are a couple of thoughts to consider when devising your sales strategy.

• Chances are whatever you are thinking of doing your competitors are too. Think out of the box. Try something new; go in a new direction.
• Most staffing companies try to be all things to everyone. They often lack the discipline to walk away from a potential sales order even if the order is way outside of their core competency. Pick a niche and commit to it. Don’t stray away, because you need to build your niche and your brand within that niche. Besides, this allows recruiting to build expertise in chosen areas rather than recruiting anything and everything.
• Make sure sales and delivery (recruiting) are aligned. You are only as good as your delivery team. Everyone needs to buy into the strategy.
• What needs exist in the marketplace that are going unmet? Figure out how you can meet them.
• Have you interviewed your current customers recently to understand what they like about you and your service offering? Do you understand how what problems your consultants are solving for your customers? That is your story. Get your customers’ input; you will be surprised with what they have to offer. You can build a strategy around this.
• Build a case study library (from your client and consultant interviews). This will help you build your brand in your niche and sell more effectively. Clients love to hear success stories.
• Don’t just understand what type of people (skills/titles) your customers are seeking in 2010, find out why. This will help you move up the customer value chain. What problems do they need to resolve?
• Read business and personal finance magazines such as Kiplinger’s, Money, Fortune, and Forbes. These magazines are loaded every month with advice from the world’s best investment and portfolio managers. They will open your eyes to industries and prospective accounts you have never thought of and provide you with the insight to devise a specific strategy for selling into each company they recommend.
• Cross-sell into new areas within your existing accounts. Chances are, even with your best accounts you don’t have 100%% market share in that account. Work to increase your footprint within your existing customer accounts.

Developing Your Tactical Sales Plan

A very common exercise (and one that I love) in the field of sales is that of “backing-in” to your number. What this means is understanding exactly what and how much activity is required of you to hit your goal. For example, your manager may tell you that your budget or quota for the year is to generate $1M in gross profit. As an example, let’s breakdown exactly what we will have to do to generate $1M in gross profit in 2010. And for your own purposes, if you email me at dan@menemshagroup.com, I can send you my Excel spreadsheet that will do the calculations for your own personal goals.

I’m going to use arbitrary numbers to simplify this exercise but you can simply plug in your own numbers for your personal situation.

Goal: $1M in Gross Profit for 2010

Assumptions: average bill rate $120/hour (all straight pay)

Average GP%: 35%

Avg. weekly GP or spread (per consultant): $1,680.00 (based on 40/hrs)

Average contract: four months/680 hours per contract

Total GP per sale: $28,560 ($1,680 x 17 weeks)

# of starts needed: 35 (35 x $28,560=$1M)

Additional assumptions:

• For every six prospects you qualify and/or meet with you get one real job order
• 60-day lag between initial contact with prospect and initial sales order
• Four-week sales cycle (review resume/interview/decision making/hiring process)

Required Sales Activity To Meet Goal

We now know that we need 35 starts for the year to reach our goal of $1M in gross profit. And because we fill or close 35% of all sales orders, we will need to identify or generate 100 orders. Because we generate one order out of every six prospects we qualify, talk with, and/or meet with, we will need to qualify and add 600 qualified prospects to our CRM system in order to generate 100 sales orders. In order to get four months of billing out of all 35 consultants before the end of 2010, they will all need to be working by September 1, 2010. This means we will need to have identified and added all 100 sales opportunities to our sales funnel by the end of July. This also means that we will need to have 600 qualified prospects added to our database (CRM system) by June to account for the 60-day lag between initial introductions with prospective customers and their first order. What does this all mean and how does it impact me personally? We better start hitting the phones!!

Broken Down Into Actual Sales Calls….

To add 600 qualified prospects to our CRM system by June and 100 qualified sales orders by July we will need to have five really good, quality conversations with new prospects every day. Qualifying five new prospects per day gives us 25 new prospects added to our CRM system each week and 600 by June, which meets our goal. Lastly, how many phone calls do we have to make to reach one qualified prospect? For this exercise I am going to use 25. For every 25 prospecting calls made, we have a conversation with one qualified prospect who will give us a legitimate shot at earning their business (reaching decision makers who hire IT consultants is a big challenge). That means we will need to make 125 phone calls per day in order to add five new prospects to our CRM system each day and 625 calls per week to add 25 new prospects each week.

I know this is a cliché, but it’s simple and it works. Plan your work and work your plan.

Do it and you will be a happy camper 11 months from now because of it!

Q: The client signed a “retingency” agreement. The search begins on September 2008 and goes until October 15, 2009, more than one year later, when the client suddenly informs us after 16 candidate submissions and 10 interviews, that they have decided to not hire for the position.

Facts: There were two interested and qualified candidates they were speaking with at the time they decided to not hire for the position.

• Our firm worked diligently through the recession to identify qualified candidates and client gave no notice of its intentions until October 15, 2009.
• The 13-month search drained much more resources than the initial “retainer” of $18,000.
• We asked for the second half of payment as we had interested and qualified candidates per client’s request, and they had decided suddenly to not hire for the position.
• We also offered to apply the second payment as a credit toward any future search, however, client’s position is that they are expecting us to keep the first half of the total fee for one year’s work and no further payment is due.
• There is no clause in the contract that addresses this situation of “client not hiring for the position.”

First, deciding not to hire for a position invokes the equitable (“conscience of the court”) theory of prevention.

Let’s say you pay a painter a deposit to paint your house. He buys the paint, hires a crew, and drives the truck to your house to start work. You lock the gate while everyone’s out on a beer break in your front yard.

You prevented their performance, so you owe them the balance for the job.

A second theory is promissory estoppel. The painter “reasonably relied” to his “detriment” on your promise to pay for the paint job. His reliance damages are his expenses, and whatever else the contract provides (attorney’s fees to collect, court costs, etc.).

Why? You are estopped (legally stopped) from asserting that no contract existed because you caused him to rely on its terms.

Then a third theory is breach of the implied covenant of good faith and fair dealing. The painter’s contract didn’t say you promised to leave the gate open. But a court will just assume that it was implied because painters don’t reasonably expect to be locked out of a house in the midst of a paint job.

Under any of these three theories, you’re entitled to the balance of your retainer. Your performance was rendered impossible by the client (prevention), you relied on the promise of full payment to your detriment (promissory estoppel), and the employer failed to cooperate with you so you could complete your performance (breach of the implied covenant of good faith and fair dealing).

If there are no additional facts, that fee is yours!

This and the other question you had were great questions. The answers are worth two well-earned placement fees. Best wishes in collecting them!

What if there is a signed ‘retingency’ agreement (retainer fee paid with a refund clause in case of non-performance) that goes just fine in the case of the retained position being filled and fully paid, but the candidate’s wife is also hired for another position within the organization, but not paid for?

Facts: Client is a hospital in North Dakota that hired a director of surgical services and his wife. We were paid for the director but not for his wife.

• Candidate’s wife’s resume was submitted by us, but the client arranged the interview with her directly.
• Search agreement clause states:

Our fee is always due and payable once you hire/employ or utilize the services of candidates who have been referred either directly or indirectly through our efforts.

• Client, once notified of fee due, claims that the agreement was solely for the position we were retained for and no other position. His wife was hired for an administrative assistant position with a $24k per year salary, and they said that had they known there would be a fee due, they would not have hired her due to the ease of locating someone with this skillset. Of course, the primary candidate’s longevity could have been affected had she not been hired.

Delighted to reply.

Some call it “retingency” and others “container.” They’re two synonymous words designating a hybrid retained-contingency fee search. But the placement law analysis is the same as a “straight contingency fee” arrangement.

Absent a job-specific fee arrangement that states the target position, a full fee is due for each placement.

In this case, you “referred” the second candidate (the placed candidate’s wife) pursuant to your search agreement by submitting her resume.

If there are no additional facts, that fee is yours!

A. I can’t tell you how thrilled I am that I am now getting more and more questions about the candidate side of the biz!

Sure, job orders still aren’t the easiest to come by, but the good recruiters know that the Yin to the recession Yang is that there are now great super candidates around who would have been virtually impossible to connect with a few years ago. The GOOD ONES know that this is the time to seize those relationships that will yield plenty of fruit in the future!

It makes me cringe when people tell me that they aren’t recruiting as much because they “don’t have to.”

“Job orders are what we need,” they tell me. The candidate flow drops and the focus on recruiting dwindles. They say they have plenty of people to fill any jobs they get. BUT THEY MISS the point, don’t they! So, I hope you are a good one and that you get that this is the time to CARPE DIEM! Work your tail off to meet and network with as many candidates as possible. You know how that works. Just like LinkedIn, they tell someone about you who tells someone and voila. The more you meet, the more leads you get (that’s a whole different topic), the better the quality of your sendouts (or temp fills), the less likely a falloff will be (or shortened assignment), the more likely you will get unsolicited candidate referrals from them, the more likely some will turn into clients in the future, yada yada yada.

So, start recruiting and sourcing! Now, remember this very simple tip. First, NEVER ask someone “who do you know who is looking.” UGGGGH!!! We never care about that. We just want to know good people. In fact, we just ask them to point us in the direction of any good people, “regardless of whether they are looking or not, in fact, I am sure they are not.”

That said, this still doesn”t work well, and you know it. That is why most recruiters stop asking it all of the time! Lets face it: when you ask someone that, even if you ask it the right way, they will likely tell you the famous “nobody comes to mind.” Well, that is the normal reaction. So, what you have to do is make them “come to mind.” And you simply do that via the power of visualization. It is quite simple, but to get someone to come to mind you need to direct the mind and put them in the mind.

ALWAYS ask very specific visual questions when sourcing. For example, instead of “who do you know who is really good,” you can ask a better question: “who do you know who is really good in your current department.” Even better: ask them to “picture their office right now and think of all of the players there in your discipline. Then ask them to think of the person or people who everyone seems to respect or who the go-to people are. Get it? If you recruit BIG 4 CPAs, for example, ask them to go back to last year when they sat in the bullpen waiting for an assignment and ask them who those people were and who were the good ones who were always requested. In other words, just ask very specific questions so that they can place their mind in the right place. Then, it’s just about impossible for most people to say that “nobody comes to mind.” Happy sourcing!

Ask Neil any question that is vexing you! Have trouble closing deals or selling? Neil can help! To ask your question and possibly have it published online, email Neil at Neil.Lebovits@TheDynamicSale.com and put the words Nudge Neil in the subject.

Neil Lebovits, CPA, CPC, CTS, before taking the industry by storm as a trainer, was a global president for Adecco, where he sat on the global executive team. Previously, he was the president and COO of Ajilon Professional staffing for North America, where he oversaw over 100 offices. He has done it all in the industry: Permanent & Temporary Placement, Sales, Branch Management, Regional Management, COO, & President. He founded his industry training & development company, http://www.TheDynamicSale.Com, in 2009. He shares the secrets and systems that he has developed and harnessed while working himself up over his 20+ years in the industry. A renowned leader, motivator, trainer, and speaker, he has appeared on Bloomberg TV, CNN, ABC news, CNBC, the Wall Street Journal, Fortune, and Smart Money. Learn more about Neil and sign up for his free online training course at www.TheDynamicSale.Com.

Q: How does the court system protect my client and candidate files as trade secrets?

If you have a valid employment agreement (only a 20% chance), there are two sure ways:

Injunctive relief to stop unauthorized use. The federal and state courts use procedures known as a temporary restraining order (TRO) and preliminary injunction to immediately stop and freeze any use of your client and candidate information.

This is followed by the award of money in the form of compensatory, punitive, and exemplary damages. These awards regularly extend into millions of dollars, and often include attorney’s fees.

In 1973 when I wrote the only trade secrets act for our industry (California Business and Professions Code, Section 16607). Since that time, there have been many general trade secrets laws enacted by state legislatures.

The most significant is the Uniform Trade Secrets Act. Since the UTSA is essentially the same in the dozens of states that have adopted it, there are many published decisions at the federal and state levels interpreting it.

The UTSA expands the definition of “trade secrets” far beyond merely contact information on clients and candidates. Today, it can include such items as:

• Prospective clients and candidates.
• Contacts (decision-makers) at prospective and present clients.
• Hiring preferences at prospective and present clients.
• Temp bid rates and markups.
• Background and contact information on past, present, and future temps.
• Unique compensation plane.
• Unique recruiting techniques.

Now let’s look at how the court system works to protect your rights. The legal remedies available are the only two you could want: stopping the conduct and awarding money for the wrongdoing.

Temporary Restraining Order (“TRO”)

TRO’s are granted ex parte (“one party” – usually on 24 hours telephonic notice). They are psychological warfare.

You can’t afford to lose this hearing. That person who said “‘Tis better to have tried and failed than not to have tried at all.” Never tried a trade secrets case.

The decision is usually made by the judge in chambers. The burden of proof is irreparable injury. It is considered extraordinary relief, since someone is being deprived of his livelihood without having his day in court.

A judicial bond must be posted in case the judge made a mistake. The underlying complaint must be filed concurrently. That starts the lawsuit.

The TRO remains in force only 30 days. So the clerk of the court must set the hearing for an Order to Show Cause Re Preliminary Injunction within that time.

Preliminary Injunction

This is essentially a noticed TRO, whereby the other party has the opportunity to file opposing pleadings (court papers) including affidavits (statements under oath) and points and authorities (analysis and citations of cases, statutes, etc.).

Here too, the decision is almost always made by the judge in chambers. But oral argument in open court is usually permitted.

The preliminary injunction remains in full force and effect during the pendency of the litigation (until settlement or trial).

Permanent Injunction

This is issued at the trial. (A preliminary injunction ripens into a permanent injunction if it is ordered.

The 12 causes of action (legal theories) we use make trade secrets litigation a very expensive, painful experience for recruiters who violate the law.

The most important thing you can do is have a properly-drafted employment agreement. Over 80% are not. They are also not updated as statutory and case law changes, or administrative rulings are issued.

Use a well-drafted agreement, plead the case properly, and the court system protects your trade secrets very well!

Four years ago, I first appeared on his show to help one of his “guests” find a job. Since then, I’ve written two books on how to find a job, The Job Search Solution and Acing the Interview, as well as developed America’s only 45-hour online job search program.

In 2009, I flew to California for two days to prepare for another appearance. The majority of us know very little about television production, but the lessons of business that can be gleaned from watching this organization “produce” their product are astounding.

When the show looks for expert advice, they do extensive research on the people and the organizations that they use. Babich and Associates is honored to be one of the resources that The Dr. Phil Show uses and recommends. Their organization is very careful about only choosing the best, and we are humbled.

From the bottom to the top of the Dr. Phil organization, quality and precision are emphasized. Even the fellow who drove the car that picked me up at the airport recognized the quality of the organization for which he works. He claimed that so much of Hollywood had fallen on hard times, that The Dr. Phil Show was a tremendous bright spot, being one of the few successful Hollywood-produced shows.

Three-hundred people work for this show. There are 10 producers, each one having 10 to 12 people working for them; the rest are technicians and support people. Each producer is responsible for one show. At least 10 to 15 hours go into the preparation of every show. The organization tapes three shows a day, four days a week, nine months of the year. The physical taping of each show takes 50 minutes.

It is hard to imagine an organization that runs as smoothly. Everyone, literally everyone, knows exactly what they need to be doing and how they need to do it. It is a precision machine. They have developed a system and process that continues to produce a popular product.

Most of the people who work for The Dr. Phil Show have been with it since its inception. Quite a few, interestingly, have left and come back, which doesn’t seem to be all that uncommon in Hollywood. However, their stated reason for returning is there are very few television shows that run with the same precision and congruity as The Dr. Phil Show.

It is rare to find any organization where so many people work so hard with so much intensity.

Phil McGraw knows every one of them. He is personally involved with the decisions and execution of every show. It is clear that his standards are high and although he has great compassion, if you don’t do your job, and do it well, you’ll be looking for another one. Staying “on top” in the television business is very precarious.

These people make it look easy. They are supposed to. They deserve every bit of success they enjoy.

Many of us don’t get a chance to watch The Dr. Phil Show. I have to admit that the only three or four that I have seen, I have been on the show. Some people claim that some of the subjects he addresses are pretty far out in left field. I’m also sure that some people just don’t like him or his show at all. (I know this because one of the people who “reviewed” one of my books spent more time slamming me because I know Dr. Phil than they did reviewing the book. In fact, the guy hadn’t even read it.)

From a personal point of view, I’ve spent no more than two or three hours of personal one-on-one time with Phil McGraw. I am not familiar with all of the subjects his shows address. But whether you like him or not, this guy runs one hell of a business. He truly cares about people.

He sought our advice in helping people with the emotional distress and pain of having to look for a job. Backstage, he expressed a sincere concern for all of the people looking for a job in this country. He is truly a nice guy. The people who work there reflect his values. His foundation is growing and helping thousands of people.

I had a great lesson in business. Thank you, Dr. Phil!

They often feel they have hired the wrong person.

Frankly, sometimes they have.

In reality, the recruiting firm owners hire some VERY talented people. But what happens next is that they ignore them, they do not give them the proper attention, and they do not set the right expectations in the training process. Ultimately, the owner then says, “They do not get it” and they fire them or the new hire quits.

Like the old shampoo commercial, “Wash, rinse, repeat.”

We move on to the next hire often with the same or similar results. This lack of an internal, specific definition of onboarding success cripples the recruiting industry and has doomed it to an industry with very small firms and very high turnover.

“What does your training program look like?”

Most stumble through their answer. The training programs are often fragmented, not formalized, and most often, not in writing. In a majority of the situations, there are no formal benchmarks. There are no expectations of when the new hire should be getting their first job order or first interview. There are no formal definitions of how many presentations a new recruiter should do.

Some owners do set expectations on daily call count, which is not bad, but it is still not the best solution that will lead to the most predictive results in the ultimate success of your new hire.

The worst definition of onboarding success I have seen is using a defined date to when a placement should be made. For example, I have heard owners/managers say, “If someone comes in my office and they do not make a placement in two months I fire them!”

With all due respect, that is INSANE!

Quick Pop Quiz

Which recruiter would you rather have based strictly on the following criteria, nothing else?

You can have recruiter A who makes a placement in week three and arranges two interviews over an eight-week timeframe.

Or, you get to keep recruiter B, who makes no placements in eight weeks, but arranges 25 first-time interviews in that time frame.
Which recruiter do you keep? Remember, you only have one choice based ONLY on the above criteria.

I will take “recruiter B” 10 out of 10 times! Recruiter B is showing that he or she has what it takes to be successful. Recruiter A just happened to get their placement early in the numerical cycle that drives each desk whether you track it or not. I am not saying that recruiter A is going to fail — I am just saying given the choice, based solely on the evidence given, I would take recruiter B.

While most owners/managers are not so drastic, the mistake most of them do make is that they instruct their new hires as well as their existing team to focus on the one thing they can not control. The one thing we can not control is the placement.

Yet all we talk about is making placements! We talk about placements incessantly. “What is the next deal? Where’s the next deal coming from? You need to make a placement soooon!” This is this is a huge blind spot with many recruiting firm owners.

Ultimately, we have a product — the candidate — who is fickle and can change his or her mind. Here is what I train people on in my office and my clients’ offices. I ask them, “Do you know what a placement is?” (Pause for effect) “A placement is an emotional nightmare … an emotional nightmare!”

When we ask recruiters to focus on something that they can not control and that something, the placement, blows up for reasons beyond the control of the recruiter, it is natural for that recruiter to become incredibly frustrated. We unknowingly put them in a position to question their own abilities because we create the illusion that we can control placements. Sure, a good recruiter can heavily influence the outcome, but control it? Absolutely not!

This focus on placements is one of the routes of the turnover issue and productivity issue in the recruiting industry. Without explaining and tracking the defined metrics of what LEADS to a placement (i.e., calls, presentations, job orders, first-time interviews), a new recruiter will feel they can not make placements.

On the other hand, if you can tell them that historically in your office, it takes eight first-time interviews to make a placement and they currently have arranged 10-15, it is up to you as the owner/manager to reinforce that the new hire is “due” for their first deal!

The only worse thing than not setting defined expectations is setting defined unrealistic expectations. Some owners/managers who do measure first-time interviews have had new recruiters come on board and say to them, “I want five to eight first-time interviews each week starting week three, four, five, and six.”

I ask these owners, “Is anyone in your office doing five interviews?” And they almost always respond, “Well, no.” I then continue, “Then why would you expect it of a new hire?” Response: “Well, you have got to set the benchmark high.”
In our office, we do not have an expectation for any sendouts weeks one and two. Depending on the desk, sometimes it is one, sometimes it is none. We just want to get one interview a week with some of these people. And we back into what specific activity it is going to take to get that.

We make the same mistake with job orders, we give an expectation that not even our tenured people are hitting sometimes. Then, since the goal is so far out of reach, it becomes unachievable and nobody will focus the least bit on it.

Avoid These Mistakes

Define in writing a successful first day, first week, first month, first quarter in realistic numbers. These are numerical targets that your average new hire can hit, not your superstar new hire.

Make sure they are minimum numbers, not “shoot for the stars” goals. Then, tie those targets into the activities that create the revenue numbers. Show them how presentations are tied to first-time interviews, which are tied to placements.

What is your minimum activity number you will accept? What does it look like exactly? I challenge you to uncover this into and engineer them into your expectations for both your new hires and existing recruiters.

The benefits are two-fold. One, you will drastically increase your success rates and decrease the amount of time to their first placement. Two, if they consistently fail to hit realistic ACTIVITY targets, you can cut them loose much sooner, saving you thousands in draw/salary and hours of time for you to focus more productively on your business.

Q: Do I need EPL (Employment Practices Liability) insurance?

A: EPL is very expensive coverage, but it is essential if you employ recruiters, have more than one office, place temps or contractors, or are an absentee owner. It covers costs of defense (the “duty to defend”), has the indemnity (claim coverage) provision, and a deductible.

It covers everything from discrimination to wrongful termination claims. There are usually many witnesses, the cases can be complicated, and government agencies are often involved. So the costs of defense can be high.

In employee lawsuits, owners and managers are typically named as defendants. Having this insurance may either give you protection or motivate plaintiffs to focus on corporate responsibility — because they know the “deep pockets” of insurance will be involved.

Not only are the costs of defense high, but the claims can be astronomical. Back pay is much less than front pay which is theoretically unlimited. The case law usually limits it to three years, but decisions vary widely. Fines, penalties, and taxes are often added.

If you risk this, check with your broker. Review the costs and coverage, carefully read the policies yourself, and select the highest deductible you can withstand. (Don’t worry about which carrier you use, but make sure it’s one with sufficient reserves.)