27 August 2015

The 10 major indirect costs of tolerating monkey business

There’s nothing wrong with monkey business (for those of you late to the scene, I suggest you familiarise yourself with my two most recent blogs on monkey business Money Business: Choose YES or NO and Sending resumes to match emailed job specs is a job for a monkey to avoid boring the majority of readers with repeat explanations).

Having some, or a lot of, monkey business is not necessarily a bad thing for a recruitment agency as long as you have your charge, and associated cost, model calibrated in order to make a profit.

However … beware, as it is far too easy to delude yourself by simply looking at the potential revenue you might (or actual revenue you do) gain rather than the hidden or indirect costs that you incur when you engage in monkey business.

Here are ten of the most significant hidden or indirect costs:
  1. consultants becoming demoralised after putting in a lot of effort into submitting resumes for jobs that just die a slow death (with no fee)
  2. sending an unintended message to consultants that their job is not valued due to the way the client engages (or more accurately, doesn’t engage) with them
  3. the opportunity cost of flogging yourself attempting to fill monkey business when you could be out finding, and pitching to, a higher quality of client who is, both, prepared to pay higher fees, and engage with you at a recruitment consulting level (or at worst, transactional recruitment level)
  4. diminished reputation with candidates as they become frustrated, and ultimately disillusioned, with the tardy and/or no feedback on their resume submission
  5. reduces confidence in consultants to request higher fees and/or retainers when pitching for new business
  6. creates a potentially uncomfortable (or hard to justify/reconcile) difference in service compared to other clients that engage at a ‘transactional recruitment’ or ‘recruitment consulting’ level (mostly for comparable fees)
  7. the resources dedicated to ‘winning’ the right to compete for monkey business such as tender/PSA submissions and presentations
  8. candidates placed in roles (often at a low fee) when those candidates are relatively easy to place in other, higher fee jobs
  9. the subsequent refunds, credits and replacements (as monkey business clients are often very far from kings of the jungle in the eyes of the candidates) become even more demoralising for consultants than working on the job in the first place
  10. undermines any attempt to present your company as a premium or high value brand
So, that monkey business you’re putting up with … how profitable is it looking now?

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2 comments:

  1. It's an interesting topic Ross. I am currently working with a client who has no database and purely concentrates on new candidates to the market ( that are looking ) and introduces them to his large client following. Has made millions ! You'd think anybody could do that ! Even a monkey ! His philosophy is get as many plates spinning as possible at any one time and only do the least amount necessary with each. Many ways to skin a cat I suppose. However this model, in my book, isn't sustainable in a down turn and there is not much to sell onwards if you wanted to exit. Good topic Ross. Adam. Hope you are well by the way :-)

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    1. Thanks for your comment, Adam. Good to hear from you. All great at my end. Your client has a model that is working for them in this market and good on them. I suspect that you are right re the longer term options on this way of working, though.

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