Positive pricing
Recruiters operating in the aerospace sector are contributing to a sea change in practice that is helping clients to keep their budgets tethered to earth.
They have seen a marked rise in fixed-price work, as clients look to keep a rein on spending. Recruitment agencies are employing groups of engineers or skilled professionals to carry out fixed-price work on projects ranging from design and documentation to the construction of test-rigs for landing gear. Teams are able to move from job to job as needs dictate.
"Having engineers we employ gives our business new perspective," said Alan Beresford, managing director of Omega Search and Selection, part of Omega Resource Group. "They can bring their technical expertise to client meetings."
Recruiters that did this kind of work, he explained, were able to charge greater margins because they had to take on more risk management, rather than just using the 'power by the hour' approach.
"We've embraced the fixed-price work very positively and with great interest. It makes us more of a consultancy rather than just a recruitment business, as we are managing high levels of risk, so we can charge more."
However, he added that firms which did not complete their work were likely to be penalised.
"If we don't finish the job on time, then we can't charge the client any extra, and we could lose face with the client company. We have to be careful we don't over-promise and under-deliver," he said.
Morson is another firm which is seeing the benefits of fixed-price work. Completing assignments within a given time-frame allows them to plan their work more effectively; the company has a portfolio of about 200 assignments worth £11m in the fixed-price arena.
"It helps clients peg their budgets," Chris Burke, operations director for Morson Projects, Morson's engineering consultancy division, told Recruiter.
"We can ensure that things are professionally done, and we can be there for all, or part of, the assignment.
"Sometimes, with other types of work, costs can run away from the client, and I think this is a sign that they are managing their budgets better."
Fixed-price work also afforded Morson Projects the chance to work with its sister business in meeting clients' needs.
"We also work very closely with Morson HR, to provide supervisory teams for project management," he said.
Chester Boothe, a director at Jonathan Lee's contract division, told Recruiter that cost management was a key factor in the rise of fixed-price work.
"A lot of clients are interested in the fixed-price work because they can build it into their overall project costs," he said.
He cited a high-profile example from the construction sector. "If you look at something like the new Wembley Stadium, why was that so far over budget? It's because a cost wasn't fixed at the outset."
Boothe added, however, that clients should give recruiters more control over the conditions of each project, as it was recruiters who were best placed to give advice.
"Sometimes, clients try and impose non-standard, non-industry contracts on these projects but it is us who should be handling that," he said.
