

Dear Developers, a "Free" Headhunter Will Cost You Over $10k - nathanh
http://blog.hirelite.com/dear-developers-a-free-headhunter-will-cost-y

======
raganwald
Two things not mentioned: When I was hiring, a resume that came direct (e.g.
through an employee referral) was always the first choice to interview. Even a
cold referral ("I don't know him, but he replied to my tweet about jobs") was
a resume that had a "$0" recruiting fee attached to it, while a similar
candidate from a headhunter carried a $10K+ fee.

No matter which way you shuffle things, as an employer I want to talk to
qualified candidates that don't have a heavy fee dragging them down. Either I
save money, or I have more flexibility about pay, it's a win for everyone
except the head hunter.

Therefore, i always encourage people to network. It could be that you are
marginally less attractive than another resumé, but if you don't have a fee,
you'll get the interview and that may give you the chance to win the job. In
which case, it's worth a lot more than $10K to talk directly to the employer.

~~~
raganwald
I forgot the other thing: One good thing about recruiters from the company's
perspective is that provide plausible deniability about poaching. While
perfectly legal, if I personally start cold-calling developers around Toronto
when I need to hire, I'm going to make a few enemies.

But everyone knows that recruiters are going to be aggressive about finding
candidates. For whatever social reason, it's perfectly acceptable to hire
someone away from another company through a recruiter, but depending on how
you do it you can step on toes doing the same thing directly.

FWIW, almost any intermediary or pretext takes you off the hook. Meet someone
at a conference? Hire them away. Meet someone at a developer lunch? Hire them
away. Meet someone through a blind date service? Hire them away. But cold-
calling them... Tacky and taboo.

~~~
jacquesm
I think the Toronto scene is especially sensitive to this because it is fairly
small and seasoned developers are in short supply.

------
abeppu
Just another dataoint : I _just_ got hired at a new company using a
headhunter. Midway through the process of doing interviews arranged by my
recruiter I received advice along these lines from my significant other, and
was shocked at the typical size of a headhunter's commission. Given that it
seemed like my particular headhunter couldn't have spent that much time
hooking me up with interviews, 20-30% of my first year's salary still sounds
ridiculously high. But ultimately, I was pleasantly surprised by the offers I
received, and it seems to have helped that the headhunter made sure multiple
companies were providing offers within days of each other. Also, he
recommended me to companies that I wouldn't have considered otherwise, one of
which I am very happy to be joining.

~~~
ig1
Yes it's high but it also has to cover the cost of all the work the recruiter
did on candidates he didn't place, and the time spent cold calling, the money
spent placing ads on job boards etc. to find candidates.

~~~
cubicle67
yes, but from the figures given I could live quite well placing only 2 or 3
people a _year_ , or extremely well if I upped that to 1 a month

~~~
ig1
The recruitment consultant will only get about 20% of that figure, with 80%
going to cover the agency costs. The average IT recruiter in the UK makes
about 40k GBP/year (about 25k base, and 15k commission).

------
philfreo
As someone who's trying to recruit developers for our startup, Hirelite looks
interesting. Is there any way to target only people within a specific location
(like San Francisco)? Or only people who are willing to relocate?

I'd definitely pay to interview 20 "screened developers"* if they were all in
the SF Bay Area already. Much less interested if they could be anywhere.

*What does "screened" really mean? Are you only showing me people that match the skillsets I mentioned?

~~~
nathanh
Thanks! We're still very early stage, so we haven't expanded to other
locations but definitely plan to. So far, we've focused on back-end and
generalist software jobs around NYC. For our first web-based event, we
required developers to be in the NYC area, but for this event we're accepting
developers who would be willing to relocate to NYC.

We've had a lot of interest in remote work. What do you think of that? We're
targeting full time jobs, but would be open to getting in to contract gigs
(which seem to be mostly remote jobs).

>> What does "screened" really mean? Are you only showing me people that match
the skillsets I mentioned?

We screen developers with a brief programming test in the language of their
choosing and look over their profile and github account. Currently, we don't
offer to match specific skill sets. We look for companies that are comfortable
letting developers catch up on whatever their tech stack is.

~~~
philfreo
Everyone and their brother is willing to do remote or contract work. What's
tough is finding good local people who are willing to join a team.

It seems kind of useless to let me talk to any developer if you're not doing
ANY skillset matching. If I'm looking for PHP or JavaScript developers, if
someone really only knows C++ or .NET - I'm much less likely to want to talk
to them.

~~~
pavel_lishin
Aren't the stats that something like 50% of developers applying for a position
don't actually know how to code? If someone can eliminate those people so you
don't have to waste your time on them, it might be worth it.

------
gigantor
An experienced web developer where I'm living at (Western Canada) contracts at
about $60/hour, with the recruiter taking away usually $10/hour. Yes, it's a
decent chunk, but the bigger picture is that companies paying the highest
contract rates almost exclusively go with recruiters from a convenience and
insurable standpoint, and the fact that good engineers are not plentiful. That
adds up to around $1500 to the recruiter every month for their bounty.

If you want to avoid this overhead and the luxury of contracts being offered
to you on a regular basis, and you don't have a solid network of peers that
can fill you in on opportunities, you'll need to spend quite a bit of time on
your own scrounging online ads, or the Careers sections of companies you'd
like to work for, or market yourself some other way, all of which require
effort.

Now we play the opportunity cost game. Frequent contracts are offered to you
making you around $10,000/month by headhunters looking to make a buck off you.
Or you can spend a few more months looking by yourself, and save yourself that
$1,500 cost per month that you're unemployed, but ultimately taking longer to
land a contract. Is every month spent 'looking' and being without a contract
worth the $10,000 in lost revenue?

~~~
gaius
One thing about contracting through an agency is usually they pay the
contractor weekly, but actually get the cash money 90 days in arrears from the
client. They need to maintain a lot of working capital, and it's got to come
from somewhere.

------
rickmb
There's also another side to this story: headhunters benefit from "selling"
developers at a high price, and usually they are way better negotiators than
the average developer. Most of the time, that money saved doesn't go towards a
signing bonus or a salary bump, but stays in the pockets of the employer.

Also, if you're confident about your development skills but not so much about
your interviewing skills, having a good headhunter basically doing the initial
salespitch for you can be very helpful.

------
iamdave
I'll gladly advocate for people to go directly to companies in the hopes of
finding work.

What about, then those companies that _want_ a recruiter to go out and find
someone? Hirelite is definitely an interesting approach to the game of finding
work, and this post is accurate in some respects of the recruiting model.

It misses though that most companies operate with a lean model, and simply do
not have the resources to source, identify, isolate, and shrinkrap a by-line
procedural methodology for finding new hires. Enter us recruiters.

For what it's worth, hiring is rare unless you're with a firm that places 500
people or more a month. If you, like me are a solo virtual recruiter,
factoring in just operating alone (the costs of subscribing to job boards,
paying to post ads), the ends justify the means.

------
j_baker
I don't think it really works that way. Or at least it shouldn't if the
company doing the hiring is smart. If a good candidate comes across a
startup's desk, are they really going to risk losing them by paying them $10k
less to make up for the cost of the recruiter? If the company doesn't want to
pay these kinds of expenses, they shouldn't use a recruiter. They shouldn't
shortchange their people because of it.

Besides, if the candidate truly is good, they will more than make up for the
extra 10k.

~~~
raganwald
There's no way to make the $10K go away. If I can afford to pay $90K for
salary and a $10K fee, can I automatically afford $100K salary plus a $15K
fee? If I can, why not pay $115K salary and a $20K fee? If the candidate is
worth "stretching" to pay that extra $10K, wouldn't I rather deal direct with
the candidate so that I can "stretch" from $100K salary to $110K salary rather
than stretch from $90K salary to $100K salary?

Sooner or later a company ready to make an offer runs into a limit as to how
much can go on the table. The more in the headhunter's pocket, the less in the
candidate's pocket. I am not aware of any company that is able to warp the
laws of space, time, and the conservation of cash expenses.

~~~
dustingetz
it might help to not think of your engineers as costs.

~~~
raganwald
Of course I don't. But nevertheless, calculate the expected return from
Candidate X per year. Work out an expected horizon given that some candidates
leave in a few months, some stay a few years, some stay indefinitely...

Work out what you're prepared to invest to lease an asset of this magnificent
quality. Now: there is an up front fee associated with leasing this asset. Is
a fee on the order of 20% of one year's lease really immaterial?

true or false, does the up front fee change what you

------
kablamo
this site is blocked at my company, btw. thanks company! no idea why and not
sure what software my company uses.

------
mattmaroon
This is terrible advice. You're setting a precedent right off the bat that
you're just in it for the money. If someone said "hey I see that you often use
recruiters, but I came to you directly, so how about you give me $10k" I'd
retract my employment offer immediately.

~~~
raganwald
I don't understand. Nobody says you're _just_ in it for the money, but once
all other issues (competence, cultural fit, start date, location, &c.) have
been agreed, isn't a candidate supposed to negotiate for the highest possible
compensation in good faith?

far be it from me to lecture Americans about their culture, but isn't that the
American Way? Or is it really that companies pretend everyone is coming to
work for the excitement of doing fun stuff and having vintage pinball machines
in the lobby, while the founders of the company get rich?

I'm not singling you out personally, but if anyone ever told me that the money
is not supposed to matter, I'd tell them that since it doesn't matter, they
can jolly-well give me what I ask.

~~~
mattmaroon
Yes, negotiating is fine. No problems there, it seems from the down votes that
everyone misunderstood. I wasn't suggesting that an employee has to just take
what's offered or that's it.

But trying to ding me for half a recruiter fee? That's just a scummy gimmick.
I'd rather you just asked for $10k more in salary because you thought you were
worth it.

Suppose a friend said "I'm going to Outback for dinner, want to ride with me."
You go with him, order the same stuff, and when you go to split the check he
asks you to pay an extra $5 since he drove. You start wondering, did he just
invite me to dinner to save $5?

This is kinda like that. You applied to my company, I decided I wanted to hire
you, and now you want me to pay you for having applied to my company directly?
That's just shady. Do I even trust that you're going to remain with the
company for long enough for this to be worth it for me, or do you just go
around trying to ding employers for $10k?

Take my word for it as someone who hires people, don't ask for a $10k bonus
because you applied through the website. Ask for $10k more salary instead and
explain why you're worth it.

