We’ll assume that you use recruitment agencies to begin with – because the majority of Accounting Firms do use agencies especially those with more than 5 staff. Are we expensive – hell yes! Are we worth it – depends…most of you probably look at us as a necessary evil (and wish it wasn’t necessary). So I’m going to share how to get the most bang for your buck with agencies!
As we discussed in the previous articles – it’s no easy task to find decent accounting staff for your firm. You’re not the only one, you can go to any conference (or these days jump on a Zoom call) and you’ll have Partners from all over the country groaning how they can’t find good staff (mind you some of you have guys have been groaning ever since I’ve known you from over 10 years ago).
So I will let you in on a secret that I only share with my exclusive clients that they have benefited from over many years and have generated millions of dollars as a result. How? Because they pay me well and I get them superstars that generate $300k worth of fees every year and generally stay with them for 5+ years that’s $1.5m right there – amazing ROI on the paltry fee I charge.
In recruitment there are two types of recruitment – Contingent and Retained. Contingent is when you pay on success (i.e. you want to employ the candidate we sent you and we charge you a fee), Retained is when you pay us a portion of the fee upfront and the remainder upon offer and acceptance by the candidate.
So let’s start with Tim the Accountant from an imaginary firm called Tax Profits! Tim has 15 staff and gets calls all the time from agencies and is bombarded by those annoying emails about the next “Great Candidate”! One of Tim’s staff has just resigned so he does what he normally does which is call up 5 agencies he has recently spoken to (firstly thinking he should fire his receptionist for not screening his calls better), or just emails them asking them if they have a person with 3 years experience in Tax & Business Services, thinking 5 or more agencies means bigger pool of candidates…wrong again! They all call him or email him asking for more details like salary, system, timing, fees (Tim being the clever accountant that he is offers them 12% or something ridiculous like that…read our article on negotiating fees with recruitment agencies etc…he has probably lost at least 3 hours by now writing and then responding to calls and emails.
He then gets bombarded with shitty candidates marketed as the best thing since sliced bread:
a) Great Candidate with xx experience – (aka They didn’t get past 1st round interviews with 6 of my other clients – I found the CV in the bin!),
b) “Senior Accountant with superb communication skills – (aka Can barely speak English!)
And my favourite;
c) “Very knowledgeable in all aspects of accounting and tax” – (aka He can’t reconcile the GST account if his life depended on it.)
He spends a few hours more reviewing these emails, fielding the calls of recruiters trying to organise interviews (still thinking I really need to fire that receptionist!). Then even more hours, interviewing them. So he eventually hires one that the crafty consultant from the UK with their annoying Pommy accent from Manchester has managed to convince him to hire despite his gut instinct not being that sure. But the references seemed ok (hopefully not completely fudged by the recruiter) – so should be ok despite that he has never worked with Xero, and has jumped jobs every 8 months – but the recruiters said he has so much potential and there were very sound reasons for leaving the previous 3 firms due to no growth opportunities, toxic culture, and of course family reasons!
Want to know what’s really happening? Let’s go to Tom the Recruiter from the imaginary agency Profitable Recruitment Agency. So Tom (commission incentivised recruiter from Manchester who has been working in Accounting Recruitment for 3 months) gets an email from Tim about the role, picks up the phone to understand more about it – one of the questions we’re all trained to ask is what else are you doing to recruit for this role and discuss the fee – Tim says he has put up an ad on Seek and called 5 other agencies and he wants to pay 12%.
Tom immediately classifies this job brief as a Class C Job Brief – ie: send some candidate CV’s from your desk that everyone has rejected and you can’t sell them to anyone else to save your life. So Tom picks up the phone to the candidate Peter to ensure he is still available (which of course Peter is – although in this market even Peter gets good offers – don’t me ask how!).
Tom gets Peter excited by Tim’s opportunity, gets Tim excited by Peter’s incredible accounting prowess and sends him for an interview. Tim hires him, invests 8 months into training him and getting his productivity up to a respectable 73% (well – respectable by Peter’s standard) and Peter resigns because his family is moving again or who the hell knows as he always has some excuse why he is leaving jobs, and Tim is back on the phone to recruiters for Round 15 trying to get a good accountant and is at the pub bitching about how there are no good staff.
So here is an alternative
Client calls me up, and we discuss the ins and out of what’s happening in their business and the nuances of the role, dynamics/internal politics concerning other staff and what the firm’s long terms plans are and I might suggest different options such as promoting someone and getting a junior, getting a contractor, outsourcing the work, or perhaps just a straightforward replacement but it might be with a remote worker or a part time staff member given the circumstances and time of the year.
If I feel we can add value I will propose we do it on retainer. Why? Because if a client wants me to work on a contingent basis against 5 other recruiters and their own ads on Seek – then I tell them thank you so much for thinking of me – if I come across anyone I will let you know. And it really is like that – because I’m not going to invest my valuable time looking for someone when I have 1 in 6 chance of making any money. Especially in this hot market – I would rather work on clients that value my time than waste it on you. The other thing that happens on a contingent basis is, if I am sending you a candidate I am also sending it to 5 other firms to maximise my chance of placing them and getting them a good offer – so now you have a 1 in 6 chance of securing them – and if I’m sending them to you that means they’re pretty good otherwise I wouldn’t be sending them to you, so you’ll probably want them but they will have 2 or 3 other offers you’ll be competing with so your salary offer and our fee will cost you even more than if you did it on retainer and they were exclusive with you without the auction situation.
Basically, if it’s urgent and you want our undivided attention then I would recommend to go with a retainer so that my team can actually focus on it rather than just keep an eye out for someone because to find the right person it takes a lot of work in this market and if you are putting up ads and getting your own referrals we’ll end up investing 20-30 hours in mapping out the market, spending exorbitant money on our own ads to ensure we cover the whole market, reaching out to our network, headhunting via LinkedIn, interviewing people and then end up with nothing to show for it because by the time we send you a shortlist – you tell us you’ve already found someone (because you hired Tom’s candidate, your ex-staff member returned from London, you nephew recommended someone, got a person from your own seek ad, decided you no longer need someone following a restructure etc…) so in order to make a living Tom has to oversell you shitty candidates – we don’t want to be like Tom, and neither do you!
An analogy that I use with my clients that gives them the ‘aha’ moment is this:
I say imagine you have a prospective SME accounting client with tax work that need to be done, and he says look Tim I want you to do my tax and financials but I’m going to give the work to 5 other accounting firms plus I’m going to do it myself AND I will only pay the one that delivers the best tax outcome for me – now tell me something, if your client offered that deal to you – how many of you would take that client on??? And if by some miracle you did take them on, how much effort would you put into their work? Assuming you’re a reputable busy firm – probably not very much! Or you would give it to your juniors to practice on. So why do you think you would get a better result with 5 recruitment agencies and putting up ads yourself??? Will you get candidates sent to you – 100% yes! Will they be great quality – on a rare occasion you will get lucky and they will be good. But I am saying there is a way of consistently getting high quality (at least higher than usual) candidates for a lower salary and lower fee and less of your time!
The benefits to you are:
1) We focus on the role and do our job properly because the best candidates are 99% of the time happily employed and get tapped on the shoulder by their previous bosses or friends – so a retainer gives us the time to scour the market vs sending you whatever we have because we’re worried that Tom might send someone first and it turns into a CV race – ever wonder why you keep getting the same candidate from different recruiters? This is why!
2) Instead of us sending the candidate to 3-5 firms and you’ll be competing with them to get them on board versus on a retainer we would only introduce them to you on an exclusive basis.
3) Many agencies will discount the fee if you offer to do it on a retainer because they know it’s guaranteed income instead of a 1 in 6 chance.
4) You’re saving money through the salary and the eventual agency fee because you’re not in an auction situation with other firms for the candidate – so double saving – high five Tim!
5) You’re saving time – you only have to deal with one consultant – one phone call or email to a consultant that knows your firm instead of 5 agencies! At an hourly charge out rate of $400 per hour x 5 hours saved each time you’re recruiting, you’re saving yourself $2,000 – double HIGH Five Timmy – you’re on a roll!
Recruitment is actually a lot of work – you’re getting better value for money through a retainer because then we actually have to work for our money rather than just being paper pushers and sending you the first CV we find in our rubbish bin because we thought we couldn’t sell that candidate to anyone, so we trashed their CV.
But please for the sake of the Holy Mary (or Thor – or whoever you believe in!) – don’t go out running to the first recruitment agency and sign up for a retainer – only do it with an agency you trust that has the right guarantees in place, delivers on time and reduces their fee for a retainer or increases their guarantee period.
As an example – we offer full money back guarantees up to 12 months and our upfront costs for a retainer are very low. We also never take on retainers that we don’t think we can deliver on.
About Michael Edelstein:
My name is Michael Edelstein and I’m an experienced Recruiter, Businessman, and a Qualified Accountant that understands the business of accounting firms because I come from an audit background myself and have been recruiting them for over 10 years.
I specialise in Senior Placements within Public Practice Accounting across Australia having placed people in every state and territory and have a proven track record in the identification and facilitation of firm mergers, practice group transitions, and/or lateral & vertical partner moves. I’m regularly asked to provide research, commentary, and strategic advice to my clients on the latest trends and movements within the accounting Public Practice market.
Are you struggling to find people? Can’t scale your business? Give me a call on 0421 892 145 or email me at firstname.lastname@example.org because I’m sure I can help you.
Learn more about Retainers by contacting me on 0421 892 145.