RATES NEGOTIATION

There are five outcomes when negotiating:

If you can do this properly you will avoid the negative outcomes. It is in your interest to understand the interests of the other party, or in this event your partner. You can negotiate hard but don’t be hard on the person, this should avoid any negative response from the person siting the other side of the table. Equally you may really like the person on the other side of the table but it is really important that you don’t do them any favours you wouldn’t do someone else as it may jeopardise the commercial viability of the agreement. 

Just because you or the other person has a strong position doesn’t necessarily mean that (a) it is true (sometimes people over estimate their strength in a negotiation) and (b) you should exert your strength just because you can. If it is better to do the deal despite you being so much stronger than your partner, do it. It doesn’t hurt to set a precedent and create good will. Often negotiating based purely on a position can create confusion and animosity.

Understand what the client wants to achieve as a new partner before you even discuss rates. Understand what they get now, how much they pay for it, how happy they are, and what improvements need to be made to the process in order to make the client happy to pay extra. What you may actually find is that working with criteria can open lots of new avenues for you. You may be negotiating terms for 1 role, but whilst you develop your criteria you discover that the client has pain in several areas and therefore you may actually get a lot more EXCLUSIVE vacancies from them. 

People like to choose. Perhaps it is a situation where a potential client wants a no frills option and therefore doesn’t want to pay a Rolls Royce price. Give them the option to get a no frills service for a no frills price and show them what that looks like, also then show how much more service they could receive with only a little more price.  

You MUST believe in what you sell and believe that the product and service is genuinely the best in the market.  

 

One of our main USP’s is that you work to flat rates of 22.5% of the candidate’s basic salary, car allowance and guaranteed bonuses (pro rota). Potential clients will always attempt to negotiate on these but it is important that you stay firm and remind the client the USP’s of the business and be prepared to walk away.  

 

Part of how you get candidates is our flat rates. They know that they will be receiving independent advice and be represented to the right places rather than places that pay us the best rates.  

 

Why would you work to less than 22.5% when all our clients pay us that or more already? 

 

You accept that you do charge more than most other recruitment business but you get what you pay for. The majority of other recruiters don’t have half the USP’s, and you do a lot more for only slightly more money. You have exclusive candidates, you headhunt to spec, and you only send candidates to 3 businesses which gives the client more chance of hiring. You placed the majority of candidates represented last year which demonstrates that you work in a qualitative manner. You heavily screen the candidate and prep the client which saves the client a huge amount of time when they deal with us as you know the market and have a better chance of getting the candidate, which is why you are paid in the first place.   

 

You generally focus on contingent business and therefore you don’t charge on receipt of CV, you charge on placement of candidate. If the potential client doesn’t believe the candidate / service is worth the extra fee then simply they don’t have to take on the candidate.  

 

The average employee costs a business in excess of £250,000 over their tenure within the business, our fees will often be no more than £2,000 more than our competitors, if you can provide a candidate that is 10% to 20% better than our competition with only a 0.5% to 1% increase in overall cost, this will be seen as exceptional value.  

 

Price is the easiest objection for a prospective client to use. “It is too expensive” gets you out of most sales processes you don’t want to be in. Very simply if you reply “if there were I way I could show you the price is more than fair and the service is worth every penny would you go ahead and sign the terms today?”. This forces the prospect to ether admit price wasn’t the problem or allows you an opportunity to deal with the pricing “issue”.   

 

“Is it price you’re most concerned with or is it cost? Price is a one time thing but cost is a long time thing. People can beat us on price but not on cost. Because of the way you search and select the average tenure of our candidates is higher, the promotion rate of our candidates is higher and the success rate of our candidates is higher all meaning, the “cost” of our service per higher is much much cheaper.”  

 

Our job is not only to provide candidates and consultancy, it is also to be a time saver. With today’s technology, technically the hiring managers could find candidates themselves, the reason they don’t is because it is more cost effective to outsource that procedure to specialists, if we don’t work in a qualitative manner we won’t save time for our clients and therefore we essentially will add a cost to the business where we should be adding a saving.  

Although the fee for our services may be higher, we save our client a huge amount of money in invisible costs as demonstrated below. Our service may appear more expensive but in fact it is much less expensive.