Paraplanning  

Using third parties to recruit paraplanners

Using third parties to recruit paraplanners

They say the people who made the most money out of the American gold rush of the 1840s were the people selling the shovels to the prospectors.

It is a tired cliché, but when you look at the story of Sam Brannan, there is a nugget (sorry) of truth in this.

Mr Brannan ran a newspaper, The California Star, in San Francisco and within weeks of him reporting that James Marshall and John Sutter had found gold, most of the adult population of the young city of San Francisco had left to find their fortunes in gold, reducing the population to only 200 people and forcing Mr Brannan’s newspaper to close.

The crafty fox had a store in Sutter’s Fort, however, and decided to purchase every available shovel, pick and pan in California. In the next 70 days he sold $36,000 in equipment – about $950,000 (£737,850) in today’s money.

As the number of gold prospectors grew over the next few years, so did Mr Brannan’s wealth as his store had a turnover of $150,000 a month (almost $4m in today’s money).

There is something of a gold rush in financial services at the moment as people chase that rare commodity: a good paraplanner.

It is not surprising, as our clients will confirm, a good paraplanner is worth their weight in, well, in gold.

Understandably, recruitment consultants are looking to capitalise on this gold rush.

Using recruitment consultants is fraught with opportunity to slip up, so I am going to share a few pointers we have learned in dealing with consultants over the years.

Fees

If you use a recruitment consultant, expect to pay 20 per cent of your employee’s salary as a fee. Yes, 20 per cent. 

If you employ a paraplanner on, say, £30,000 that is £6,000. Oh, plus VAT, so that will be £7,200, thanks. 

Yes, the same as you would pay the new paraplanner in salary for their first three months with you or to engage The Timebank for two years.

It may be worth seeing what scope there is to reduce this in some way.

Indemnity period

Most recruitment consultants offer to repay part of the fee if the candidate leaves within the first few months.

This is often a reducing percentage each month. Very few, however, will offer to replace the candidate, which is much more useful for you as the employer.

Also, once the indemnity window is closed, you may find the recruitment consultant contacting your employee to tell them about an exciting new opportunity just down the road where they can earn an additional £4,000 a year. 

If the paraplanner takes the bite, the recruitment consultant can trouser another 20 per cent fee, this time on £34,000 (£6,800 plus the VAT).

I imagine that is a rare thing, but it happens. It happened to us, so I can confirm it happens.

Who is the client?

Consultants can sometimes forget who the client is.