2013 was a year like almost no one else has seen in the modern economic era. For instance, have we have we had three game changers in one year such as the Healthcare Reform Act, the Sequestrian Act and the temporary government shutdown.
This made several companies wary regarding hiring last year, and it had several staffing firms making huge concessions regarding giving away margins and permanent placement fees in order to have some revenue (in the short term). By doing this, companies feel like they win because they get a quality candidate at a lower rate, but it actually has the inverse effect long term. For instance, it commoditizes our business when the economy regulates itself and there are more buyers in the marketplace. When this occurs, the landscape becomes more competitive and companies are willing to pay higher rates to land the talent they need. Now, go back to the companies that made lower rates and agreements and then they’re wondering why the staffing firms companies that they had longstanding relationships with are not putting as much time or supplying as many candidates as they did before. Recruiters are always going to put more time into corporations that pay higher rates in which they can secure larger commissions.
PREMIUM CONTENT: December 2013 Jobs Report
Many people will say that this issue will naturally take care of itself through market corrections. The answer is not always that easy. With more companies starting to pay more competitive rates and working with a smaller candidate base to find good applicants for jobs that need to be filled, this can create a bottleneck effect in which companies are scratching their heads and wondering why they’re not getting better attention, candidates and filling jobs at the rate they used to because the trusted staffing firms they’ve been working with during the Great Recession are not nearly as proactive toward their dire staffing needs as they have been.
I’ve always tried to take the approach that we try to be as reasonable as possible with our rate/percentage fee regarding clients and standardize our approach regardless of the current economic conditions. If you take this approach, I find that things tend to equal out and you build relationships as opposed to working in a transactional mode.
If companies feel you’re being fair with them and building a personal relationship with them, they’re more apt to do business with people and companies they like as opposed to someone that just gives them a rock bottom rate.
2014 will be an interesting year because it will show which companies profit from a more stable approach instead of approaching their staffing strategy regarding how the economic wind blows. There are no absolutes but following fundamentals and being honest and straight forward with both companies and candidates will pay dividends long term and will be a winning strategy that everyone should implore. Let’s look back in 12 months and see how this worked out. Good luck!
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