The horse racing industry is built on the punter. Without the person prepared to bet on a horse(s) there is no horse racing industry. The financial interest of the punter ensures that the media rights are worth bidding for and the various clubs can offer prize money that makes it attractive for owners to invest in the many costs of racing a horse.
The punter loses in the long run. The industry relies on it. However a tiny percentage of punters not only finish up ahead (at the end of a racing season) but winning enough money in order to make a living from being a punter.
The difference between the two types of punter are characterised by the terms ‘average punter’ (or mug punter if you are being uncharitable) and ‘professional punter’.
Both types of punters do the following (to a greater or lesser extent) in assessing horses in a race in order to place a bet.
- The allocated handicap weight (horses are given a weight according to their overall rating, scaled against the other horses in the race)
- The barrier (is the barrier seen as an advantage, or not, for this horse in this race? If so, how much of an advantage?)
- The trainer and jockey (whether this trainer/jockey is perceived as highly capable, average or less so)
- The track and distance (whether this horse is likely to win at this track and at this distance)
- The track condition (whether this horse is suited to race on a particular type of track (eg firm, soft, heavy, synthetic)
- The other horses in the race (how likely they are to win)
There are many others factors including breeding, age of the horse, how long they have been racing in the current ‘preparation’ etc. Factors aplenty, enough to make your head spin. It’s called studying the form. Form guides are an ever-present fixture in the mainstream newspapers.
All punters study the form before they place bets. The critical difference between the mug punter and professional punter is when it comes to placing a bet. A professional punter will assess the odds of a horse to assess the value of that horse as a winning proposition, in order to decide how much to bet, if at all.
For example, one horse may be listed at $3 (ie you gain a return of $3 for every $1 invested, equating to odds of 2 to 1) which is assessed as being very good value because, according to the professional punter, the horse has a ‘real’ price of $2 (ie odds of even money). Because the professional punter perceives the price as value, he places a large bet (say $500). Contrast this to a situation where the same punter thinks a specific horse will win but its available odds are $5 and the punter assesses its ‘real’ price as $8. In this case the punter will either not place a bet or will invest a smaller amount (say $100).
To quote that most famous of gamblers, Kenny Rogers:
“If you’re gonna play the game, boy
You gotta learn to play it right.
You’ve got to know when to hold ’em
Know when to fold ’em”.
And it’s exactly the same in recruitment.
Almost all the recruitment industry operates on a contingent fee; if you make the placement you gain 100% of the available fee. If you fail to make the placement you receive nothing.
It’s a gamble. Just like betting on a horse.
You have to study the form. (What history does this company and client contact have in working with recruiters and/or in working with you or your company?)
You have to decide whether to bet on the race, or not. (Will I take on this assignment, or not)
If you are going to bet then you need to decide whether to bet big or bet small. (How much time am I prepared to invest in this assignment?)
How much value does the price (fee) represent? Just like in punting, a large fee is often not the best guide for making an investment. For example a fee of $10,000 may represent excellent value when you know you have two excellent candidates immediately available who will both be interested in the job and those candidates will also be of high interest to the client. Contrast this with a $25,000 fee attached to an assignment for which you have no existing quality candidates and little idea of how long it would take to source them.
The reality is that most recruitment consultants are the typical mug punter; they don’t study the form closely enough, they bet on every job and they don’t make a considered and conscious size-of-investment decision (and stick to it). They simply make the same gamble on every job.
Even worse than all of the above, the recruiter is like the mug punter who keeps throwing bad money after good in the hope that they will ‘get out on the last’. How many times does a recruiter keep working on a job, in spite of all the evidence that her time is going to be fruitless, because she ‘hopes her luck will turn’ and she will still make a placement. To stretch the analogy further, even if they do win (make the placement) they will lose on protest ie the candidate leaves during the credit period.
The professional recruiter is like the professional punter; they coolly and calmly assess the form and the price, and then decide whether they will invest, and how much. They don’t win every time but they win often enough to come out ahead.
The professional punter loves the mug punter because they swell the pool with ‘mug money’ and distort the real odds (the real punter loves betting during the Melbourne Spring Carnival for exactly this reason) enabling a profit to be more easily made.
The professional recruiter loves the mug recruiter because the mug recruiter goes after every job, and then overinvests their time in that job, leaving the professional recruiter ample time to invest in sourcing and pitching for the profitable jobs that they have a high probability of filling.
Are you a mug punter or a professional gambler?