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Michael Gionta
Michael Gionta has over 20 years successfully growing his own recruiting firm that ranked in the top 3% of all MRI offices Worldwide. In addition, Michael is now sought out by owners who want to grow their recruiting firms but simply lack the “recipe” for doing so. His programs provide a step-by-step process that quickly be put into place to begin the journey of getting control of your business with profits that seemed out of reach before. Email Mike at info@TheRecruiterU.com to see if or how his programs can benefit you.

Confidential Replacement Retainer Issue

  By Michael Gionta  |    Monday June 14, 2021



QUESTION: I have a confidential replacement retainer issue. I have a new client looking for a controller and determined during that search; they want to hire us for a confidential replacement to the VP of Finance. This is a small company with less than 100 employees, so the CEO is nervous about me invoicing the VP so it is not suspicious. Have you had a similar situation before? What did you do? - David  

 

ANSWER: This is actually a two-part question. I have had this happen a few times in my firm. The simplest solution to ensuring that it did not have any company visibility is to label it a consulting fee. If the VP of Finance is the one to approve the invoice, I would have it as a consulting fee. If the CEO signs off on the fee agreement, I would have the invoice related to a retainer or consulting fee. The CEO can pick a project within his organization where it would not be evident to the Controller or the VP of Finance, who has to sign off. Real simple.  

For the second part of your question, the client wants to run both searches in tandem. Ideally, the search would find a VP of Finance who can bring along their Controller or an equivalent. It is essential to know if it is okay with your client if the VP of Finance and Controller come from separate places.

Regarding pricing this type of project, in running one confidentially, these are two separate searches. The premise I always start with when presented with this type of situation. If somebody gave me five searches and wanted a quantity discount, I would say they are five searches. If they are five of the same position, meaning five widget makers all in the same metropolitan area, there is a little more flexibility. 

In your specific case, these are two different roles, so they are two distinct searches. I would start from that with that mindset, David, of treating them as separate, and then you can negotiate differently, but do not start from a position of weakness, meaning you give us both, and we will cut the fee based on __(blank)__.  

The basis of my teaching on getting assignments is on doing a phenomenal diagnostic. That entails asking the right questions before you quote a fee, so you are sticking to the context of here as the value we are going to deliver, the timing for us to find it is our process for identifying great talent. 

Part of your process sounds like you sold this effectively - is how you will do it confidentially. A friend of mine, C. Spencer, had a phrase called tagalongs. From a pricing perspective, it was if you hired to say a CFO or a VP of Finance and they brought on a Controller; he had it structured into his fee agreement that there would be a fee of 15% to 20% for any hire from that person’s network within a year after bringing them on. Again, if you bring on a VP of Finance and bring on their Controller, as you outlined, and they do not do it in the context of asking you, he justified it that this is part of my network, and he sold it incredibly effectively. 

We did use it effectively, but I caution you to expect some pushback. You can start at a higher fee and negotiate down to a lower fee. Those are my ideas on how to structure pricing on it and how to invoice it. Excellent question!


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