Burning Bridges

Question:

So let’s talk about burning bridges. So in the last 8 years or so we have worked with a lot of companies. A lot of them we had at around 15-18% - so after the economy got better - we started cutting them off around 2011-2012. Now every time we get back to them - they say, ‘well you decided to terminate your relationship.’ I say now I am ok with doing it at 25%. They say no. I find we are burning too many bridges but at the same time I do not want to slave for pennies. IT managers love us because we bring them good people…but HR for some reason keeps on blacklisting us due to rates, previous relationship, etc…Are we becoming a black sheep? What’s up?

Danny's response:

Since you used the burning bridge analogy, let’s take it a step further. In order to keep sailors from being afraid to fight and potentially die on the battlefield, they used to land and then burn the ship. No way back. (Uh, thank God for conscientious objectors, ‘cuz that would not work for me!!) You may have taken a good idea, not to take low fee, small margin bad business, and gotten carried away. If more than 10-20% of your business is with low margin clients, or worse, you have several huge clients who give you 30% or more of your business, you simply cannot walk away. You service them, concentrate on new business development under the new 25% or be damned policy, and gradually let the bad business go. You can’t do it all at once.

I would put together a litmus test. Who did you let go who is 1) easy to work with process wise 2) candidates are easy to attract for them because of their status, or business model, or leadership, etc. 3) pays their low fees reliably and quickly 4) still have a lot of needs?

If you have a few that pass this stiff test, approach them, be humble and propose 18% or 15% with a small engagement fee. Once you have a steady stream of success with them, and have reestablished yourself with HR, you might be able, for difficult searches, (or for management positions), to make the case for a higher fee. For now, you are on the beach, and the ship is gone. Time to fight or die.