3 Crucial Steps to Collecting Your Recruiting Fee

There’s nothing a recruiter likes better than placing a candidate. Well, there might be one thing—collecting the recruiting fee for placing that candidate.

Recruiters who have been in the profession for any length of time probably have at least one “horror story” about not being able to collect a fee from a client. There are a lot of factors involved in ensuring not only payment, but also prompt payment, of your invoice.

But what are the most important factors in the collection of your fee, the ones that directly affect your ability to collect?

3 crucial steps to collect your recruiting fee:

#1—Always have a signed fee agreement.

Yes, I may be stating the obvious, but sometimes the obvious must be stated. After all, you can’t expect a client to pay your fee if they don’t expect to pay your fee or if they haven’t indicated (in writing) that they will pay it. There may be some recruiters who are willing to work a search without a signed fee agreement, but that’s a perfect example of “flying by the seat of your pants.” Other recruiters, though, might refer to it as sheer lunacy.

#2—Be strategic when negotiating your fee.

There will come a time when clients want to negotiate your fee percentage. Now, the decision to do this is a very individual one for recruiters. Some will absolutely NOT negotiate their fees, while others are more flexible in their approach. Additional factors include the relationship that the recruiter has with the client and the history they have together.

Using the axiom of “Never give up something without getting something in return,” below are three ways to be strategic in the negotiation of your fee:

1. Lowering your fee percentage, but only for a series of exclusive search assignments. For example, instead of 25% for one search, your fee percentage is 20% for three exclusive searches.
2. Lowering your fee percentage, but only if payment is remitted within a certain time frame. Considering how long it usually takes for clients to pay recruiting fees, this certain time frame is typically between 10 to 15 business days.
3. Lowering your fee percentage, but only if you’re being tasked with helping to hire an entirely new department or if you’re helping a start-up or new company build their organization. In situations like that, it could make sense to sacrifice a portion of your fee percentage.

#3—Justify your fee with VALUE.

Ultimately, clients don’t pay your recruiting fee for no reason or just because you say they should pay it. In fact, there are some hiring managers and HR personnel that look for any way to NOT pay the fee of an agency recruiter.

That’s why you must make sure that your recruiting firm provides the level of value necessary to justify the recruiting fee in the mind of the hiring manager. In other words, the hiring manager should always want to pay your fee, namely because they know the value you provide and they want to keep receiving it.

This means not only exceeding expectations by producing exceptional talent, but also serving as a hiring consultant and offering advice and information outside of just making placements.