SO I HAVE WRITTEN A FEW POSTS LATELY ABOUT HOW DIFFICULT JAPAN IS TO RECRUIT GOOD TALENT AND HOW THAT TRANSLATES TO PRICING. LET`S EXPLORE HOW COMPANIES MIGHT GAIN MORE CONFIDENCE WHEN PARTNERING HERE IN JAPAN.
I won`t go too far with the analogy but it is much like dating when looking for something serious rather than a fling. The terms have to be mutually rewarding and are likely going to come down to how attractive your partner is (based on your rating scales).
IT IS TOUGH TO COMMIT TO FEES WHEN YOU HAVE NOT BEEN ABLE TO DO A FIELD TEST
One of the big issues for companies new to Japan fee levels is that they don`t have any frame of reference on who the “good” agents are and which of those agents is worth the Japan premium. In technology terms the client has no way to conduct a “POC” (Proof Of Concept) before coming to agreement on terms: the classic “try before you buy” situation.
Indeed it is tough to commit to what (from the outside) look like exorbitant fees when you have not been able to do a field test. This is why we are happy to provide our client list and references as required – in fact we promote that. To date we have been entrusted by our clients as Primary or Exclusive agent for over three quarters (76%) of searches, and we are confident our track record speaks for itself in this regard. Yes, we do charge market rates and no, we have no problem if a potential client prefers to go to a cheaper option.
Because they usually come back…
AFTER RECEIVING A MIXED BAG OF RESUMES THEY WERE BACK WITHIN 6 WEEKS
In fact as a good example of this we had a “high growth” software company that refused to go over 20% on the fee when going to agency for the first time in Japan, for their first sales hire. The company found several agents who sounded good and were willing to work at 20%. We suggested they work with them and if they needed us we would be available – at the market rate for the service we provide.
After receiving a mixed bag of resumes they were back within 6 weeks. We then proceeded to introduce the sales guy who went on to become their APAC #1 – at market rates of course!
These types of “high value” candidate tend to work with a very limited number of trusted agents and do not actively promote themselves online – remember LinkedIn penetration in Japan is less than 1.3%!! It is hard to imagine that this 1.3% is loaded full of “rock stars”, and indeed it is not. There are many for sure, but for real search you need a proper research (sourcing) team that digs on and offline, as well as mature consultants capable of receiving referrals from “rock star” circles, and rapidly proving their value to new candidates when acting as your spokesperson in the market. Both researchers and mature consultants cost money to operate and, along with “incubation periods” that has to be factored into the cost of a “high value” service.
Agencies that are capable of working at 20% in Tokyo very likely lack the sourcing capability or consulting maturity that is required on most “high value” searches. The client should ideally differentiate between agents that have proven track record in “high value” search with a high “introduction to hire” ratio, as compared to KPI-oriented agencies that simply fling as many resumes as they can in hope of hitting the jackpot. One of these services is worth paying full fees for, the other is not.
YOU SHOULD GET WHAT YOU PAY FOR
So for differentiation we suggest clients look to structure their recruitment with a Tier 1 providers (the “go to option”) and Tier 2 (the “panic button”, if you will). Ask for references and speak to anyone you know who is connected to or has worked with the agency in question. Find the agent that will work best with you as a “partner”. This should not be a one-night stand.
Ultimately you should get what you pay for and the reality is that if our job were easy, we would not be required.
For any talent acquisition professionals looking to partner in Japan, ask around or contact us to talk details.