To the clients they serve, contractors are essentially ‘products’, or collections of specific skills and capabilities. And like many products, contractors – particularly new ones – find it difficult to sell themselves. That’s why they need the professional selling skills of recruiters, who are in effect commission-based salespeople for the contractors they serve.
Noted industrialist and business guru Sir John Harvey-Jones was quoted as saying: “Most companies fail not in their attempts to be innovative or creative. In this country most of them fail because they undervalue the importance of professional selling.”
And this is precisely where highly skilled knowledge workers who are new to contracting fall down, as a result of their lack of sales experience and knowledge of the professional sales process.
It is the recruitment agencies that plug this skills gap and, in the case of IT contractors, for example, are responsible for finding over 90% of contractors work with their end clients. Not only do agencies find contractors work; they do it on a commission-only basis.
Some contractors, particularly those new to contracting, naively assume that they can find their first contract from a standing start without an established personal contact network. It is true that there may be contractors who can achieve this. But they are very few and far between, and I’ve never met one.
More often, it is only after many years that contractors have a sufficiently robust personal network, in which they have invested much time and expense, that can then deliver an ongoing stream of lucrative contracts.
I am yet to meet any new contractor who has successfully sold themselves into an end client from a cold, standing start. As we saw from KDR Recruitment Mark Dexter’s interview, recruiters invest hugely in lead generation, and building the professional sales skills of the consultants who find contractors their clients.
As a student, I did my fair share of holiday jobs cold calling for leads, making over 100 calls an evening that might generate three or four leads for the sales force and of which only a fraction would convert into sales. Creating and managing a sales funnel is a full-time job in itself.
So, to those contractors starting out and who resent the idea that an agency takes a cut out of their day rate, I would urge them to ask themselves whether: a) they have the skills and resources to successfully undertake the sales process; and b) whether they could do it more cheaply than the cut they give to a recruiter that has found them a contract.
Knowledge workers’ capabilities don’t sell themselves. Be thankful that there are commission-only salespeople out there prepared to sell you as a ‘contractor product’, find you contracts, and negotiate on your behalf – and all at a very reasonable rate.
And if you think the recruiters cut is too high, then you should have negotiated better with the recruiter – that’s sales!