Top Talent founder
says time was right
to launch flat-fee firm
Cathy Muldoon bucked the norm when she launched her recruiting and consulting firm, Top Talent Inc. in Minneapolis, about a year ago. She chose a flat-fee structure.
“We cap our fees and we work on an hourly basis,” Muldoon says. The traditional model in the industry is known as contingency or retained search, and it’s a percentage of compensation, typically 30 percent. Hence the higher the salary a position pays, the higher the commission for the recruiter.
Muldoon used to work at a large recruiting firm with the traditional model. She found that many smaller firms were shut out. “They knew they needed it, but for an emerging company they couldn’t afford it.
“I thought, how can a company like mine still make money but in a way that allows smaller companies to use this.”
Smaller firms were among her first clients when she launched. “On average it’s been about 35 percent less for companies” than what they’d pay under the traditional model. The structure is also more flexible, she says. For example, she recently recruited three candidates for a small accounting firm, and the accounting firm hired two people, all for one flat fee.
What’s surprised her is that some very large companies like the structure as well. Circuit City and Select Comfort are both clients.
Top Talent isn’t the only firm offering flat fees. Brigham Group in Apple Valley, for example, offers flat fees occasionally to companies that perhaps are entering the market and are looking to hire many employees, founder Jennifer Brigham says. But the model is unusual.
Muldoon acknowledges that her overhead is low, and a larger company with many recruiters probably couldn’t afford to charge the lower flat fees. But it’s working so far for her, especially when she also gets consulting business.
She notes strong activity in early 2006, especially in sectors such as accounting and finance.
Jennifer Brigham, Brigham Group Inc.: 952.432.6060; jbrigham@brighamgroup.com; www.brighamgroup.comCathy Muldoon, Top Talent Inc.: 612.872.2800; cathy@toptalentinc.com; www.toptalentinc.com
