How to Approach a Client About a Pay Rate That Is Too Low

Does talking to clients about low pay rates make your account managers uncomfortable?

It’s perfectly understandable. Money is a sensitive subject! But with minimum wage on the rise, and qualified candidates in short supply, it’s vital for your sales team to broach the topic with clients that don’t offer competitive compensation.

In addition to giving our industry a bad reputation, pay rates that are too low make your account managers’ and recruiters’ jobs extremely difficult. Instead of having the freedom and resources to deliver great people and smart staffing solutions, your team is tasked with the impossible: providing Nordstrom-quality talent at bargain-bin pay rates.

It’s time for some straight talk with your clients.

Conversations about money may be tough, but they’re discussions your account managers need to have. Train your team to be consultants – not just order-takers – using honesty, effective information-gathering, patient education, and practical guidance to convince clients to pay up. Here are a few suggestions for approaching employers about pay rates that are too low:

Provide some perspective.

While most employers know that unemployment is low, they may not understand all the factors contributing to our nation’s current talent crisis:

It’s a job-seekers’ market. With more jobs available, and fewer qualified workers to fill them, employers must pay higher wages to attract and keep great people. Period. Train account managers to use this information appropriately when broaching the subject of pay rates with clients.

Is your client up against a tight deadline? Remind clients of the business problem driving their order — and how offering a competitive pay rate will help solve it. A competitive pay rate will attract more viable candidates, faster. Is saving money a chief concern? Workers who are fairly compensated are more productive, efficient, engaged, and reliable. While a higher pay rate will raise the client’s bill rate or placement fee slightly, the increased productivity and reduced turnover will generate even greater cost-savings.

Spend time exploring your clients’ underlying business needs so you can make a targeted case for why they need to pay up for talent. Getting clients to “step up to the plate” will make your recruiting job easier, while delivering the best results for your customers.

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Back up scenarios with data. A client will respond much more favorably to hard evidence than opinions or hunches. So, arm your sales team with numbers. When discussing pay rates, ask reps to share relevant data (i.e., employment data, salary surveys, industry projections) from reliable sources to properly frame the client’s recruiting situation. Then, train your team to provide recommendations for reasonable pay rates.

At PrideStaff, we take things one step further by offering employers free, customized salary reports. Combining proprietary and third-party information that represents 90% of the labor market, we can generate real-time data and insights that:

  • compare a client’s compensation ranges to competitors’;
  • drill-down by industry, position, and geography;
  • help employers hire in-demand candidates by offering the right pay rates.

Bring the conversation full circle. Make sure your reps explain the positive “domino effect” that higher pay rates have on candidate quality, offer acceptance rates, recruiting speed, job performance, retention, safety, and even the client’s employer brand. When employers understand the interrelatedness of these factors, it’s easier for them to justify paying more.

And if they still won’t budge? It may be best to walk away from the order. Wasting time on bad orders your team can’t successfully fill prevents them from focusing on the good ones. Over the long-term, it’s smarter and more sustainable to build a reputation as a staffing firm offering solutions that benefit all parties involved in the employment equation.

Get out of the commodity game, and into the business of building long-term, high-value, mutually successful relationships.

Tammi Heaton

Tammi Heaton
Tammi Heaton is COO of PrideStaff. She can be reached at theaton (at) pridestaff (dot) com.

Tammi Heaton

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