Friday, June 6, 2014

PR Firms Shun "Pay For Performance" but Have a Blind Spot When the Table is Turned

Over the years I have often heard how "pay for performance" is a wrong, even harmful way to do business.  It's an argument that still goes on today.  I read this post very good post by Scott Robertson today on LinkedIn and it got a little annoyed at how the PR agency business doesn't apply this good sense to the recruiting industry.  Here is the comment I left after reading the article:


In 20 years 99% of the agencies I’ve worked with agree with you.  Then why don't they realize the same is true of a recruiter. Pay for performance (in my business it's called "contingency search" is all they want. Yet the same three fundamental flaws apply:

1. Promising results that are out of your control:  We can present the absolute best candidates but it's dangerous to promise the hire will be made. The candidates decides not to move, their own firm makes a counter offer, etc.

2. Devalues expert advice and counsel: With a pay for performance attitude, the client does not really commit to the recruiter.  The agency doesn’t build a relationship of trust and understanding which would result in more refined research and well vetted candidates.  Other search firms are used so judgment and discretion goes out the window in the hopes that you’ll get lucky -- so you refer many people.  On the other hand, the advice of your recruiter could provide you with important information about the candidate market. 


3.  Makes the recruiting process tactical: Same thing here, exactly.  Yet everyone knows that making a good match includes intangibles like chemistry, insight, personality, clicking, and a little magic.

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