Beans means… Heinz?
Recruitment isn’t a commodity. But many recruiters act like it is.
You may have seen baked beans hitting the headlines last week, as Tesco stopped selling Heinz beans, soups and ketchup in a dispute over price rises.
We’re used to hearing about supermarkets being all-powerful when it comes to negotiating with their suppliers. But in this case, industry experts reckon Heinz had the upper hand.
Hang on a minute. How did the people that put beans in a tin get one over on the UK’s biggest supermarket?
Let’s dive a little deeper to see what’s really going on (and, more importantly, find the lesson for smart recruitment pricing).
On the face of it, baked beans should be a commodity. Plenty of companies put beans into sauce into a metal container. In fact, Tesco already offers several other types of baked beans to their customers.
So how did Heinz have so much power when it came to negotiating?
The answer is simple. Tesco customers don’t shop for baked beans. They shop for Heinz baked beans. And if they can’t find them in a Tesco store, they may well pop down the road to another supermarket. Heinz 1 - Tesco 0.
Now let’s look at this from a recruitment perspective. I speak to lots of recruitment leaders who think that, at the end of the day, all recruiters do pretty much the same thing. In other words, we’re a commodity.
Clearly recruitment is a lot more complicated than putting beans in a tin. But if our customers think they can get the same service from another agency then they have the upper hand when it comes to negotiating the fee.
If we won’t agree to a lower rate, someone else will.
As we’ve learned from the Heinz story, the answer is to make sure your clients aren’t looking for “a recruitment agency”. They need to be looking to work with your recruitment agency.
Once you’ve created this demand, you move far away from the world of commodity and price wars. Your clients agree to the rate that you set, and pay invoices when you tell them (hello retainers!).
What’s more, hiring managers come looking for you - even if they have to go to a different supermarket to find you (I’m stretching the analogy here, but the point is they come to you rather than you having to reach them all the time).
If you like the sound of leaving the commodity circuit and making yourself a recruiter in demand, simply reply to this email and we can talk about how I can help you become the go-to brand, charging the prices you want.
Jon
PS. I see a few agencies in each sector getting this right. If you want to ketchup with them and avoid becoming a has-bean then now is the time to work on your pricing strategy.
So if you like the sound of leaving the commodity circuit and making yourself a recruiter in demand, simply reply to this email and we can talk about how I can help you become the go-to brand, charging the prices you want.
PPS. If you’re concerned about the quality of my puns in these emails, you’ll be pleased to know that you can choose to work with me on a 100% no-pun basis.
The question is, do you think that’s more or less expensive than having to put up with a bit of word play as you build your new pricing strategy? Answers on a postcard (or reply to this email with your guess).