Jul 7, 2011

Working for free - is it really a good deal?

Has recruitment business in Finland created a monster? Many customers tell me that there are plenty of recruitment service providers who work for free and charge only for a successful outcome. This seems like a very good trade for the customer, no risks involved, you pay for results only. But is it really a good solution for either party?

1.     Free case can never be a priority
Working for free isn't a very good business model. If I had to work for free, I would try to spend as little time as possible on the free part of the project, not only to minimize the poor investment but to make sure I had plenty of time left for projects that were a good financial trade off for my company. Free work just doesn't cut the line in the order of priority. 

2.     You won't get a Porche at a price of a bike

 Doing something half way not because you want to but because you cannot afford to spend any more time on it, is most likely bad service for the customer. In the worst case, lack of attention leads to unsuccessful end result, customer has wasted time, will never try the services again and the recruiter won't get paid at all. You're just not going to get quality for free.

3.     When no one pays, no one commits

When no one pays, no one commits and I've seen this happening to my company. when we decided to offer our services free against a reference case. As a result, we worked hard to help the customer but it so happened they did not commit to our help. They, without a doubt not intentionally, made public activities at the same time for the same opening in the same channels which were totally contradicting our activities. These activities made us, a new comer on the market not only look silly but were possibly threatening to our still virgin like, vulnerable image. We learned our lesson and stopped this case very quickly. When no one pays, no one commits and commitment after all is a major contributing factor to a success of any business.

4.     Success is based on the attractiveness of the offer
Everyone whose ever recruited knows a truly successful result in a recruitment process can never be guaranteed. The more effort is put into the process, the better chances there are for a successful outcome. Success or lack of success has only so much to do with who is interviewing and selecting the candidates. Like in any (marketing) process, a lot of the end result depends on the attractiveness of the offering, i.e the vacancy and the image of the employing company as well as the selection of channel and copy. Even if you searched and hand picked the candidates (head hunting), you cannot guarantee the "best candidate" wants to take the job nor that the customer shares your intuition on who is the "best candidate".
Companies outsource recruitment because it's time consuming and difficult, and because they rather put their own time and efforts into tasks that provide them better value. Maybe I'm naive but I don't get how offering services for free could be a good business - or actually a business at all? Paying for the whole process is justified and committing to each other worth while. If not, insist on a refund and change the service provider.

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