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December 13, 2017

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Selling Your Firm Against Fee Objections Expense Control

Many corporations have laid off a multitude of employees over the last two years, creating an apparent oversupply of candidates on the job market. It might therefore seem logical that with so many available candidates, a company would not need to pay recruiting fees to headhunters. As a 15-year veteran of sales recruiting, I would like to explain why this could be a misguided and costly strategy.

During this recent period of downsizing, I have noticed an air of corporate confidence amongst some executives that downsizing and layoffs have suddenly fixed the deficit of sales candidates available to the employment market. As a result, the senior leadership in a number of corporations has issued corporate-wide edicts to suspend activity with headhunters. Third party recruiting, the reasoning goes, is an additional expense to the corporation and some feel that cutting that expense is a positive step to profitability and generating a return to its investors.

Those who have taken the "we-can-now-do-it-ourselves" approach to hiring may actually be worsening their current situations-- and hurting their bottom line. First, they have inadvertently made themselves recruiting sources for the headhunter community. Many companies are still using third party recruiters and have retained search firms to truly recruit for them - to find and recruit the presently employed, top performers who are selling or managing for the competitors. Secondly, by cutting off third party recruiters, they have just lost the proactive recruiting sources they previously had. Since they no longer have someone who is excitedly "selling" their positions to the industry’s best, the organization now has to rely on passive recruiting- what I call a "wait and hope" approach. They must wait and hope that the right candidate will read the classifieds this week. As a result, I would make the case that their quality of hire is likely to diminish – and that will lead to diminished sales. While well-intentioned and hard working, most corporate HR recruiters lack the resources (mainly the resource of time) to go out to the industry and source the presently employed, top-performing sales representatives. It has been my experience that if a human resource recruiter has been in a particular market segment for only a few years, they may lack the deep network that the veteran headhunters have. Instead, most employ passive techniques such as web postings, newspaper ads and employee referrals. Many employee referrals are typically an out-of-work friend or acquaintance, and not a top competitor who is not actively looking for a job. The end result of passive recruiting is that the company is now interviewing and hiring from the bottom half of the candidate pool – a pool of mainly unemployed candidates or marginal performers-- and the company is not getting a shot at those who are not reading the classifieds or posting to the job boards. Yes, there are some positions that can be best filled by hiring someone who is out of work-- someone who is worth taking a chance on. But, what about the key territories and key clients? Should a company take a passive approach on hiring for these critically important positions? Is it really worth the risk to hire someone who is out of work-- possibly because they were not a top performer in their last company? As I mentioned earlier, the corporate recruitment strategy of web postings and employee referrals is a wait and hope approach: wait, and hope, that the candidate with the right credentials finds the posting and submits a resume.

True, there were some seasoned, accomplished sales professionals who were suddenly on the job market in the spring of 2001 due to the rash of startup and dot com failures. Those caught in that unfortunate situation were forced to not only call recruiters, but also surf the web sights and read the classifieds. However, the majority of those who were available have already found new positions. The good ones are already selling for someone else and have already stopped aggressively pursuing new employment. That doesn’t mean they are unavailable for hire. It means that they have to be recruited - sold-- and a classified ad or web posting cannot do that as well as a one-on-one presentation from a recruiter.

In spite of the rumors that unemployment is up, and that the majority of companies are laying off, there still exists a deficit of exceptional sales candidates. The fact of the matter is that the majority of lay offs have been of non-quota bearing employees such as operations, technical support and engineering. As for the layoffs in the sales sector, many companies have used those lay offs as reasons to also let go their bottom sales performers. Sources at recently reorganized companies say that in the aftermath, the good sales representatives and sales managers were retained, and those that were under plan were let go. When you think about it, it’s obvious- with investors screaming for increased sales, why would a company lay off its top performers?

Again, I propose the question, "why do you need a recruiter in this market?" A good recruiter can work on your behalf, and take the excitement of your products and services to the industry’s currently employed, top performers. A top performer may not be actively looking for a new job- until a professional recruiter finds them. The majority of candidates placed by recruiters were not actively seeking a new position. But, when opportunity knocks, most people do listen. A professional recruiter can do the opportunity knocking on behalf of your organization. As an executive, do you want that recruiter opportunity knocking and finding that person for you, or from you?

-Patrick Mingarelle

Patrick Mingarelle, Vice President of National Register

Patrick Mingarelle is Vice President of National Register, an executive sales search firm. Pat specializes in the placement of Fortune 500 level sales professionals, sales managers and executive sales leaders. Comments and questions can be sent to him at: patm@nrcols.com.

Copyright © 2001,2003, 2004 Patrick Mingarelle www.nrcols.com