Articles - Business / Client Dev & Marketing

It all started with a few telephone discussions last December. A company I had been in communication with was becoming weary of the same level of monotonous, lackluster service every contingency search firm they had used was providing.

When the comment was made during one call “We think we’re getting the same re-treaded, refurbished candidates being recycled from the same online sources. We’re just not getting the fresh, currently working talent we feel our company ought to be able to attract.”

This was like a Moose call to Sarah Palin’s ears.

I explained that receiving an improved level of service would most likely require laying down a structurally different foundation from the start. “You can’t blame those contingency recruiters for resorting to online job sites,” I replied. “They’re being required to fund and finance your search out-of-pocket and they have every reason to minimize those costs and associated risks without a known return.”

I had his attention. I mailed our kit of “Sample Search Reports®” we prepare only for retained clients. I sent this in a folder (as usual, for those of you who have attended my conferences on this subject) along with a small stack of letterhead-printed “Thank You” letters, testimonials (both from candidates and high level clients well known to their industry), and other material including our glossy company brochure.

For good measure, I also included my book, “A Manager’s Guide To Maximizing Search Firm Success®.”

The hook was baited and the lure was now floating in front of the big game I wanted to capture. Now I had to be patient. Time is part of the formula. If I move too quickly I come across needy and that undermines the negotiation process.

After not hearing from anyone the day after New Year’s I called back to follow up. The COO said, “Send us your contingency agreement – we like your stuff but we’re not paying any upfront retainer.” This is normal human reactionary protocol since no one – not even myself – enjoys breaking with past habits.

I replied:

“I’ll send our contingency agreement but the rate will be higher than what you can get with a partial retainer. I’m also making it clear you will not be getting the in-depth information shared in our Search Reports® since that is a time consuming process reserved for retained clients.

However, I’ll also send you a second partial- retainer agreement so you can compare the two and decide which way you wish to proceed.”

What happened next almost flipped me off my chair, they signed BOTH, sent in a non-refundable check for one (engaged/contained fee) and hand-wrote which position/search each agreement was to apply towards. The partial retainer had a built in 20% total discount in return for the upfront, non-refundable partial retainer (engaged/hybrid search).

So the fun begins. The check arrived in 3 days. No onsite meeting. No office tour. They were already sold based on the portfolio I mailed out.

I soon began noticing I was dealing with a hands-on CEO that would often override the COO that had paid/retained us. The COO liked one guy, CEO did not. COO said let’s bring him in, CEO said (words I cannot reprint). The clues began to reveal themselves such as the email that read “Frank … ur voice mail sucks! –JF”

I had the classic, high-strung, tightly wound, driven, A-1 entrepreneur as my “actual client.” What else is new? Isn’t everyone worth $100 million wound tight as a drum in the business world?

Everything came to a head when, after moving what I felt was too quickly with one candidate which stood to reduce their own ability to negotiate. The COO emailed “Stay away from that candidate …. We have it from here.”

I’m afraid no one tells me how to run my company or when/how to speak to candidates we found and presented. In fact when a company tells me, “Don’t talk to the candidate, we’ll handle negotiations from here,” or “We have this one under control,” this is precisely when my yellow warning flag goes up. These are usually the very occurrences where I have problems with offers being unclear and a candidate’s livelihood being placed at stake – not to mention my own company’s legal liability being jeopardized from an E&O perspective.

So I called the candidate on a Sunday to debrief and reported back his interest and salary requirement to the CEO.

This resulted in a profanity-laced email ending with “u r pissing me off badly.” The CEO then called me, at the office (which is where I happened to be), and we duked it out in a verbal jousting match. I was standing on principles of well-developed best practices honed from 23 years of knowing how to avoid catastrophe, while he probably dealt with so many lousy recruiters that they were the cause of most of his problems and paranoia.

He put forth his explanation, which involved “hiring 5,000 people personally” (for a company that has 200 employees, mind you. I recruit full time morning through night since 1987 and still have not placed 5,000 people) and “working with hundreds of recruiters” as his argument for knowing what is best. To which I calmly and soft-spokenly replied, “I feel more special than ever to know out of hundreds of recruiters you chose IRES on these critical hires.”

I explained my side of the argument. “Like it or not,” I explained, “IRES has a legal duty to exercise reasonable care for the candidate’s best interest as well and we simply can’t just ‘disappear,’ especially with a new account and a company with which we’re for the first time arriving at the offer stage.”

After some ranting and raving on his part and a few choice words telling me that’s B.S. (its not BS I have had several E&O close calls that threatened my entire business) I stated

“If you are not going to let me exercise our time-tested best practices that work for your best interest as well as that of the candidate’s, I can simply cease all activity right now and we’ll simply agree our styles and approaches are incompatible and I’m happy to end it all right now.”

For the record, there was just under $150,000 of fees on the line with this one client consisting of four positions valued at about $150,000 to $200,000 annual first year compensation each ($600,000 in annual base salary alone multiplied by 25% excluding additional fees attached to hiring bonuses/etc). This was a big gamble I was taking but I knew I was right and I was standing on my principles and best practices derived from twenty-three years of knowing the signs that foretell when things are about to go sour or subject my company to legal risk.

I added he could mail me any check balances for whatever hires take place from candidates that were already scheduled to fly around the U.S., and we’ll simply stop conducting new searches (which meant the new urgent search in Philadelphia they had just asked us to work on three days prior).

While that may have sounded like a bold poker bluff – I was not bluffing. There are other clients out there I am now working with which don’t micro manage and engage in squirrely behavior that raises my concerns. I knew if he really did use “hundreds of recruiters” (or for that matter a few dozen) he could not have been that happy, as he did not return to the others and instead signed a partial retainer with a non-refundable upfront fee to IRES. In fact, the COO had gone so far to say they were tired of their previous relationships.

The tone quickly calmed back down on his end and he agreed he would keep me posted and promised to “blind copy me on communications from here onward”. I’m fine with that … at least for now until we get to know one another better.

Most recruiters I know would have walked away from a difficult client or caved to their demands and lower their standards in order to appease a difficult client. Some would say using profanity and street language is “unprofessional”. This is where I differ. I consider the use of college dorm-room language the ultimate badge of honor indicating I have been invited into the inner-sanctum of the executive team’s trust. If they did not want to work with me he would not have called me and not even bothered speaking to me.

The cussing, mild profanity and collegiate jargon was actually a milestone in my viewpoint. We’ve crossed the threshold from dancing at a full arms-length distance to a close embrace. CEO’s only talk that way to people they respect and want to work with. And the more I stood my ground and dished it right back the more noticeable his tone changed.

This was no time to back down. This was my golden moment to distance myself 10 horse-lengths (or car lengths) away from the pack and I took full advantage of having his ear all to myself.

Sometimes standing for what you believe is the right way to work—can only earn you respect. If the company truly wants to go about hiring in a half-cocked manner it may be a risky client to work with. In this case, I was fully prepared to walk away and he knew it (I also got to keep his money since it was explicitly earmarked as ‘non-refundable’).

As an olive branch, (and other subtle, psychological reasons) I presented a “MPA” candidate later that same day as a “bonus candidate,” not necessarily fitting any current job -- but one he may nonetheless have interest in.

My email was cleverly written in a way that accomplished several things to my company’s benefit:

1. Let him know I was working with his direct competitor and arch rival CEO

2. That his direct competitor was working with IRES and actively interviewing the same high-level executive talent he was seeking

3. That his account was not the only game in town IRES was working on (confirming my seriousness that I would have really walked away)

4. The added bonus of pitting his natural competitive tendency to get our existing candidate a 2^nd exploratory interview

It worked. Win-win-win for all three parties.

My candidate called me last night and bought me dinner – I offered to pay but he refused, feeling I was the only recruiter that could have accomplished getting him not one but two interviews in a short time span--direct with the CEO of prominent companies bypassing all Human Resource shenanigans.

Stand your ground. Don’t let a client push you around to the point of conducting business that might jeopardize your livelihood.

I don’t mind “bending my process” or being flexible to accommodate a company’s internal “process”. But when I see signs their internal process is a risky one that could jeopardize my own business it becomes time to speak up.

By standing up to this CEO, in a pleasant, professional, but firm tone (I never shouted, spoke softly, and stuck calmly to the reasons why I need to remain involved) I now earned his respect more so than any of my brochures, handouts, materials, reference letters, or published books could have done. In fact all the previous submitted promotional material is little more than frosting on the cake at this point.

My guess is that this CEO had not had many people tell him “No,” and to hear that was a refreshing revelation he was doing business with a different kind of search firm that cares and stands up for its principles.

With years of experience, I have come to know that when I walk away and leave the process to a company and candidate, that’s when things implode and letters from attorneys arrive at the office.

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BIOGRAPHY

Frank Risalvato made the plunge into the search industry in 1987; He founded www.iresinc.com, the search firm he continues to operate today. Within two years he was earning fees on a monthly basis that were comparable to his entire previous annual salary. Today he specializes in the low to mid-six figure hires and manages multiple openings each month. He works like a mad-man, in eighteen directions simultaneously. While he has not invented recruiter training, he views himself as someone that improves perfects and enhances pre-existing techniques. His newly published book,, “A Manager’s Guide To Maximizing Search Firm Success©” by Searchlight Publishing has earned him more partial retainers and engaged fees—while knocking out contingency-only competitors—than any other technique ever used, it is available now on www.amazon.com

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