The Headache of HeadHunters for Agencies

13 Apr , 2015  

Show of hands- how many agency executives or owners out there love the experience they are having with headhunting (talent placement) services in Philadelphia? (If you do, kindly contact me and leave me the name of that company.) My experience has been completely frustrating, non-transparent and ultimately cost-prohibitive. Their business model seems to be:

  1. Charge whatever mark-up fees they can get
  2. Control the negotiation process- obviously in their best interests to do so since they get a percentage of the rate.
  3. Offer little transparency to both the sub-contractor and the agency
  4. Disallow sub-contractor and agency to negotiate salaries directly when transitioning from temp to employee status.

None of this makes sense to me. My rationale per each point above:

  1. As in all business relationships, the buyer and seller should know what the deal is, and be able to plan accordingly. A floating fee policy is impossible to plan against. Variable pricing works for the stock market, not for buying talent placement services.
  2. Agencies have to price out estimates, jobs, retainers based on the reality of the cost of resources. Usually, such estimates have already preceeded the need for a temporary resource or the addition of a new staff member. Personally, I’m not a fan of third parties negotiating in my stead. This is what is so wrong with healthcare, where the consumer is not has not direct control of costs by the provider, it’s all done through a third party- insurance company or worse, government- but that’s another story for another day.
  3. Why not put sunlight into the whole process? If certain talent providers have their way, neither the agency nor the individual talent has much say in the rate. Many times it’s a ‘take it or leave it’ approach. How many talents out there would be happy to know that they didn’t get the contract simply because the mark-up fee put them out of the consideration set?
  4. I believe that when it comes to negotiations with both clients and employees, transparency is a good thing. It builds trust and longer relationships. The only time it doesn’t work is when a party is particularly unreasonable or worse. And then who wants that relationship anyway.
  5. Ultimately, if we are going to transition a sub-contractor into a permanent employee, we need to speak directly to them. Money is not the only factor when hiring someone. Culture, learning environment, opportunities, work-life balance are part of the equation. I do not want any third-party being in the middle of such discussions. These conversations are too important to both the prospective employee and to the company as a whole.

Kurt Shore President, D4 Creative

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