Most of you know me by now: I’m open about my views on discouraging commission, and have changed the majority of the business Team Prime does to consultancy based models. But I thought it might be worth going over just how bad commission based recruiting is with some examples, and give you some pointers at how to make it work better for you if you’re recruiting. This will also help create a positive feedback loop to get a better recruiting industry overall.
So, what’s so bad about commission?
Let’s start with an example: you’re someone who delivers something, maybe it’s code, product help, design, management. Imagine your role was to do your job to the best of your ability (and it’s a hard job, with plenty of pain points in it) but you’re only going to get paid if the thing you’re working on gets completed. Sounds painful but doable. You’re good at what you do, right? What if there are plenty of points to do with the thing you’re delivering that are out of your control, and all of them can mean the thing you’re working on doesn’t complete. And then after months of work, you don’t get paid. Nothing. And often, don’t even get a thanks for your effort. How would that make you feel? Could you work in that environment? Could you afford to?
Some things that could go wrong with a high probability:
- The project funding changes
- The specification of what you’ve been asked to make changes
- Someone decides they don’t want the thing you were making any more
- Someone takes the thing you’re doing, works on it themselves for a bit and then wonders why it broke irrecoverably, when they’re not experienced enough to have gotten involved
- The main person you need to complete your work goes on holiday during a critical time (and you have no sway over that) and the project is irrecoverably lost
- The project you’re working on decides it doesn’t want to be made, and you can no longer build it
So the last one is amusing, but thrown in on purpose. As you’ve probably worked out, these are all things that regularly happen in recruitment work. And yet almost everyone in recruitment is paid on commission – even though all these huge factors that make all the difference to the end result are out of their hands.
And you wonder why all the people (ok, MOST of the people) who are “recruiting agents” (I refuse to say consultants) are sales led, callous, sell their grandma types. Because who in their right mind with any passion for what they do could work in those situations? Could you?
So now that I’ve set the tone for why it’s bad because anyone with any sanity would run a mile from the industry, let’s look at other things commission does:
- puts the prices up. For every client you can bill, there’s plenty you couldn’t due to the above. You’re paying for someone else’s recruitment failure
- can you trust someone who is advising you when your decision directly affects their income?
- what happens to recruitment folks who offer you advice that then changes how you’re looking and allows you to fill a position without needing them. They don’t get paid, but they spent time and experience helping you. Do you think that’s a sustainable business model? Or do you think they’ll stop giving advice, or go out of business thanks to commission?
- what happens when a recruiter with no moral compass offers you a CV that’s PERFECT. Do you care how they come to have it? How they got your details? Should you? You only pay them if it fits, why should it matter to you? You just need to hire!
Commission creates a negative feedback loop where you reap what you sow. Sure, you may get to hire quicker on one or some occasions, and then you’re left with an industry that is based on ripping people off, playing with their careers, lies, and anything else that it takes to make those placements. Because money.
How do we fix it?
There’s a couple of relatively simple pain free ways.
Firstly, if you’re working on commission with recruitment agencies, understand the possible change points I noted in my list up top. Do everything in your power to make sure they don’t change and HELP YOUR RECRUITING PERSON TO HIRE. That’s crazy! Why should I help the dark side! I’m paying them, they should do the work! – Well, no. Recruitment is team work. No one in recruitment can fix your problems instantly, but they can work with you to get there over time. The more you put in, the more you get out.
Working with a few recruiters? Stop. Pick the one (or one for each discipline) that’s serviced you well, given you the best people, taken the time to understand you, and give them ALL YOUR BUSINESS. Do it right now.
In fact, take them out for lunch, a good one. You pay. And tell them at lunch you’re putting up their rates by 2% and giving them exclusivity. Think I’m crazy?
You’re about to get ALL the best people, more proactive searches and overall a rather wonderful feeling of team work. What you’ve just done is given them a meaningful relationship with you, invested time and thanks in them – watch what happens. They will deliver fantastic results. Of all their clients, you’re the one who suddenly gets them. Do you think they’d rather deliver for you, or the other clients paying them less (and don’t listen to them), or flex to help bring in the right people for your business?
If they’re not hitting the mark, ask them in, explain (nicely) why and show them profiles you like. Ask them what bits about the role are sticking points, and work with them to see where there’s room for manoeuvre. The best people for your company aren’t ones who turn up perfectly in a rec’s regexs, they’re the ones who are a great fit for your ethos, company and growth. Remember that.
Think about it: if you only ever get paid based on success (and a hard success that’s often got moveable goals posts) who’s business will you focus on? The ones where you know you’ve got a higher chance of getting paid, and the work you put in (not just the placement) actually means something to everyone involved.
Neither stops you working on commission, but it will change the relationship you have to one based on mutual trust and love and help you build your team better (and with less bad experiences). It will also help to make the industry better. Bad recs will lose business and hopefully vanish. Good recs will get rewarded and the businesses they work for sit up and take note that positive team building is an easier more predictable way to make money than the bad ways they’ve had to rely on to get by.
I could post on this subject a lot more, but hopefully that’s enough food for thought for the time being.
Meanwhile, I’m off to work out if there’s a way we can completely remove commission from our offerings, by looking at ways of providing better consultancy models to our smaller clients and start ups – so it’s not just the big teams who benefit from moving off commission and onto consultancy based builds.