Ask Barb: Reducing Fees

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Ask Barb

Dear Barb:

Over the past two years we reduced our fees and now we are stuck with 10% fees when we usedto get 25%. How can we increase our clients’ fees back to 25% without losing their business?

Paul N., Colorado Springs, CO

Dear Paul:

You have several solutions to the issue of reduced fees. Hopefully when you reduced your fees, you did it due to economic conditions and put a timeframe on the reduced fee. It is important that your clients see why increasing the fee or bill rate will benefit them.

Explain that your other clients are paying your normal fees and bill rates and as a result the reduced rates are putting them at a competitive disadvantage. Your sales team is bonused on production and of course will send the best talent where they are being paid competitive rates.

You may not be able to increase a fee from 10% back to 25% but you could initially meet the client half way by increasing the fee or bill rate by 7-8% vs. 15%. If your client will not agree to your normal rates, it may be time to walk away and identify new clients who will pay competitive rates.

One of the greatest challenges faced by your clients will be to identify and hire top talent. This is conducive to increasing,not decreasing, your rates in the future!

Barbara J. Bruno, CPC, CTS


Would you like to Ask Barb a question? Email her at support@staffingandrecruiting.com. Each month in The Fordyce Letter print edition, Barbara Bruno answers questions from individuals in the Recruiting Profession. We will bring you some of these Q&A responses from Barb each week on FordyceLetter.com.