Retained recruiters, whether they're contract or full-time, are ones you pay to represent your company. They work off a salary or an hourly rate, like normal employees. They expect to be there in a year or two, so if the hire doesn't work out they'll hear about it. They represent you as a company and don't have any incentive to hide who they're working for or who they're talking to. You can still get clueless recruiters here, but at least the relationship is much better.
You also need to look at risk. In contingency recruiting, 100% of the risk is on the recruiter. Company pays nothing until a hire is made, so companies can engage all the contingency firms they want and most will be doing free labor - spreading the word about the company, drumming up interest - it's free PR for the company. I could find 10 perfect candidates and spend many hours, but not make a dime if none get hired or if the company changes direction.
In fully retained recruiting, all the risk is on the company. The company will pay money out and may get mixed results. My model tries to split the risk a bit, with small upfront fees and small back-end fees (all flat fee and unrelated to salary).
Negotiating with a couple recruiters to pay them some money up front with additional back-end payout for performance may yield better results for companies that complain about contingency firms. Recruiters will appreciate you reducing their risk, and by removing the risk a company should be able to negotiate a lower fee.
As others have mentioned, due to the high payouts to these recruiters they are willing to lie their pants off to get you to accept the job. The last recruiter I worked with tried to hide the name of the company which really irked me. I am not some piece of cattle to be herded between companies and I am perfectly capable of looking up information on a company to determine if I want to work there or not.
I don't need a recruiter throwing buzzwords at me that he/she thinks will convince me to take the job. Every call with the recruiter was more painful than the last and then at one point the recruiters supervisor contacted me and used even more BS/flowery language to try and convince me to apply for the job.
A few months after I got a new job (without a recruiter) I was contacted by another recruiter but noticed before I trashed the email that this wasn't from a company of recruiters. Instead it was a recruiter hired by the company looking for programmers. We talked back and forth on email a little and she was very nice and I felt like there was much less over-hyping (still a little but that's to be expected in that position). Within a few days and about 2-3 emails I had a phone call with the co-founder. I ended up not taking the job due to lack of experience in what they were really looking for but it was a very pleasant experience. Contrast that with 5+ calls (3 during work before I told him not to call 9-5) with the external recruiter, a meeting in person, him harassing my reference, and never once being able to talk to anyone at the company they were trying to hire me for.
The contingency recruiter, particularly one who is independent and not working for a big firm, wants you to take the job because it means a new car.
This is an important thing to understand. Cashiers at grocery stores don't pressure you into buying more items, because what you buy has no discernible impact on them. Car salesmen, or realtors, care quite a bit.
Until companies start changing the way they engage recruiters things won't change. Paying them less, but with some guaranteed up front money, is my answer.
Honest question: Should recruiters call during non-work hours when -- presumably -- no one would answer?
Side note: I prefer email, and it is mysterious to me why a significant portion of recruiters simply must insist on a telephone conversation when an email would suffice.
The internal recruiter talked only over email with me and setup a call with the cofounder in her second email to me. (Note: we traded a few more emails to figure out a time that worked for both of us). I just looked at the first email she sent and it isn't very personalized but it is informal and not a wall of text filled with BS buzzwords.
I work for [removed]. We're kind of like a [removed] for [removed]. We’re [removed], whether they work in factories, wait tables, or drive firetrucks, with each other and the companies they work for. We recently raised our Series B round and we’re looking for great engineers to help us reach an even bigger audience.
We are passionate about including all employees at the workplace in the conversation. Potentially you could be a great fit for our engineering team here at [removed]. Would you be open to chat either today or tomorrow?
Look forward to connecting with you.
As you can see they didn't mention anything specific to me but I am much more open to responding to than what I get from most recruiters.
I may be an edge case in the phone call department but I always answer my phone if I am awake and not in the middle of something with friends. If I am at home at 8pm messing around online or watching TV I will answer. I find it extremely uncomfortable to talk with a recruiter while at work. It was even worse at my last job where I sat within 5 feet from my boss with no divider between us at all. I feel like I have to speak in code and watch out from saying certain words that might tip off my current employer that I am talking to a recruiter. Now a days if I hear the words "Hi I'm XXX XXX with YYYYY" I hangup if "YYYYY" is a recruiting firm. If you google my name you can find my email address in seconds so there is no reason anyone should have to call me and I refuse to deal with external recruiting companies after multiple bad experiences and overall dislike of their business model.
Why did you continue to work with that recruiter after the first call?
Here are some things I've considered:
- Meetups: Hosting usually gives you a quick pitch to the audience, but there is a real time investment to make a successful meetup that leaves a good impression. I could attend other meetups and try to recruit but I don't want to be "that guy" when everyone else is there to learn
- Craigslist, StackOverflow, LinkedIn, etc... These are all things our recruiters should be covering, but I thought I might get some traction as an engineer trying to hire people. Not much luck so far
- Hiring remotely. This is a little scary but I think that there's a big talent pool outside of the Bay Area that we're not seeing because they don't want to live here. I've read a lot about how to create successful remote teams but I'm wary of building a team that's 95% in-office with one guy in Alabama who's out of the loop.
I'd really love your thoughts or advice on this.
Once you've built a bit of a hiring brand, you'll start to see incoming traffic coming in organically instead of having to go and do outreach all the time.
Thanks for your feedback
Most people want to work on exciting projects with energetic and curious people. It's infectious.
Regardless of what they tell you, their fee will factor into your salary negotiations and give you less leverage to the upside.
While the potential employer won't tell you the recruiters fee, behind closed doors the conversation goes "Well, he wants 125K and the recruiter has a 10% fee on top of that, so..."
You're automatically a more expensive employee if you go through a recruiter and that's a bad thing. If you're half-way good at what you do, reach out to the company you like directly.
I'd think fee only figures into the salary conversation when fees are exorbitant (which they can be), otherwise it's a cost of doing business for some companies. Once a startup taps out their friends and family plan, they often reach out to me for some hires, and those usually lead to some referrals from those new hires and the company can subsist off friends/family of the new hires for a little longer.
This is part of the reason I charge lower and fixed (fees paid in advance, well below market rate, and fixed meaning not tied to salary) fees than my competitors, as it takes this argument off the table from both sides. It doesn't prohibit a company from making a hire because the 'tax' on the hire isn't high enough to be prohibitive, and candidates know that the 'tax' on their hire is also relatively low and prepaid. Under this model, any hire is judged based on compensation to value, and not based on a high 'tax'/fee.
Edit: a specific scenario from earlier this year. I was cold-contacted on LinkedIn, the job sounded interesting, so I talked with the recruiter, ended up applying, interviewing, and declined an offer. I told them the range I wanted, they asked what I was making. I dodged the question, so they asked if it was more-or-less X, and I confirmed. Turns out that when they talked to the company, they said I had wanted about 10k less than I had actually said I wanted. The number they said I wanted was a 10% bump on my current salary, and it seemed to me that they were trying to find out the lowest number they could give that would still be a 10% raise. It seemed pretty scummy to me, and I'm not going to work with him again.
There is a ton of 'fear' or at least awareness about being at some disadvantage if a company knows your current salary. I personally think the only number that matters is your salary expectations.
If you are truly underpaid and you are aware of this, then your expectations might seem a bit high relative to where you are now, but not high if you consider the market. As an example, when candidates move to the US from foreign countries, they can see themselves earning double or even ten times what they made at home. If you make $10K US in India and tell the recruiter that, and the recruiter shares that info with the hiring company, do you really think the company is using that number as some baseline? Of course not. Expectation is the key number here.
If you are overpaid for a certain market (which can be dangerous from a career mobility perspective) and aware of it, usually due to some externality, your current salary makes little difference. When someone changes geographic markets, such as moving into or out of SF, their current compensation is basically thrown out the window. Should you have fear telling a recruiter that you were making 100K in Philadelphia when you are moving to SF? Your market value in SF may be closer to 150K, so current salary means little.
If you know your market value - and a good recruiter who knows a specific market should be able to price you out - discussing current salary doesn't matter much. When I'm working with underpaid candidates, I'll always mention to my client company that my candidate is underpaid and we expect that will be remedied during this job search.
I don't have anything against recruiters but one should be realistic as to how things actually work.
I'll always advise candidates on the risk of asking too much or the potential for an offer to be retracted if we don't negotiate in good faith and reasonability, but it isn't accurate to think that the incentive to raise a candidate's salary isn't there for many recruiters. For your example of 10K that may result in $2,500 to the recruiter, that isn't an insignificant amount. That's a mortgage payment for some.
I do agree that the risk of someone being too expensive is real, but the recruiter doesn't decide on what is too expensive - that is a decision made by the market and participants in the market.
I can remember being on contract and wrangling a bottle of Whiskey out of the agent. I had to go into the car park and collect it quietly there as he didn't want the other people he was managing on site to get wind he'd given me it. Funny in an odd way.
Remember that an agent is just following the money. A lot are on basic + bonuses. One reason I used to keep the company and address of my current role off my CV is that their focus is so much on locating new roles.
Of note if you hate an ex-boss, just casually mention that you worked for X :D
For an employer, that means making sure they're not coaching candidates too much. I once learned a recruiter had coached a candidate so much that their resume was highlighting skills that were actually very weak. They even noted words we'd used a lot in explaining the position, and coached the candidate to use these words in stories. No one outright lied, as far as I could tell, but the recruiter was going a little too far in forcing the fit.
Potential employees need to watch out, too, because the recruiter doesn't really care if you're going to be happy or fulfilled in the position. I've also used recruiters to find jobs, and they helped me find a really great position once early in my career. The recruiter kept trying to get me in to interview for positions I didn't want. He'd say, "just check it out and see." Sorry, no. Make it clear you're not going to waste your time if it doesn't move you in the direction you want or offer the pay you demand.
Recruiters are often maligned on HN because of Linkedin spammers, but I think that's a minority of bad recruiters making more noise than everyone else. My view is that they can be a useful channel as long as you do your homework and know what the recruiter is doing.
This has made me want to call them up at 50 weeks and ask for that bottle of whiskey or brown paper bag of cash, otherwise I walk. Oddly enough, I've had plenty of recruiters that placed me call me up on that 53rd week and try to place me somewhere else.
Too bad the employees are not getting in on this racket?
If they didn't ask you to forward, would you freely respond with what you in fact are looking for, or would the recruiter specifically have to ask that? I usually phrase my intros by saying if the opportunity I presented isn't something you are interested in, I'd like to learn about what types of things would interest you so I can let you know about only those opportunities if they happen to come across my desk. Response varies, even with that added line.
The forward request is a little grating, but I used to reply to recruiters asking how they came across me, regardless of whether they included that line. Virtually none of them replied back. Lately, I've just been junking any recruiter email without replying back if it's clear they don't know anything, or they know the bare minimum, about me.
If a recruiter emailed me, opened the email up with an explanation of how they came across me and why they thought I'd be interested, I'd be much more inclined to respond with more information about what I'm looking for even if the offer in their initial email is not even close or if they asked me to forward the email to someone else.
A better analogy might the pretty girl walking home from high school, of the rather hick-ish / paleosuburban sort -- when the older dropout pulls up in his muscle car and asks "Hey babe, wanna party?"
I get about the same feeling when talking to recruiters, most of the time.
Go in to a McDonald's and start asking the staff if they want to come work at Taco Bell or Burger King. Interrupt them at home during their time off a few times. "Hey, come work for another company doing essentially the same stuff for essentially the same money - maybe 3% more!" I doubt you'll get many takers.
Which they then package with over-the-top smarminess and intellectual dishonesty. And for this, they add a 30-40 percent premium to your acquisition cost for any potential employer (and concomittant disincentive to hire you, or respectively, increased incentive to relentlessly grill you, check you over for ticks and fleas, etc to make sure you're worth the overhead, if they do choose to bite).
I've worked with a few good recruiters, but even over a 5-month job search and talking to every major recruiting firm in town, I got zero actual job offers (and only one real promising lead that fizzled out on the company's side). There's a LOT of inefficiency in the system.
Contingency recruiting and the incentives inherent in that model, again, is at the heart of the problem.
When you get a call from some shady recruiter asking you about a 6 month contract in Omaha, you're getting that call because a company or government agency decided to start doing strategic sourcing and procure people the same way they buy any other commodity.
So two things explain the poor quality -- they are literally squeezing every penny out of the process and are hiring idiots
The other thing is that they don't want to find candidates. They want to have low rates of success -- they're just engaging in a recruitment process to justify hiring workers on guest visas who can be more effectively exploited. If you look in an industry "trade rag", you'll usually find a page with some hard to read, small print job postings -- those are "compliance" advertisements purchased for the same purpose.
Even in situations where the employee profile is similar, recruiter quality can vary widely.
Full-time internal recruiters are rarely financially incentivised per hire or to hit targets. If they are, I'd strongly argue that the company employing them is utilising the recruiter incorrectly.
External recruiters live and die by their targets and their commission. Money is a terrible incentive (possibly the worst) for encouraging recruiters to actually help their candidates or clients.
Just like the best engineers/designers/etc, the best recruiters are those that go above and beyond simply to help their company succeed. When you use an external recruiter, that company is an agency.
"When should I hear anything?"
"I have a meeting with the hiring manager in 2 days, I'll call you back right after."
A week passes. I call him back, it's 2pm on Tuesday.
<clearly waking up> "oh yes. Well this job is about..." <repeats the original pitch>
"okay, so I know this, and last time we talked you said you had a meeting with the hiring manager and would get back to me, a week ago."
"so...I'm not at my computer, but I have some feedback on my computer, I'll call you back this afternoon?"
"Well was it good or bad feedback?"
"I...I...have it on my computer. Can I call you back this afternoon?"
No call, nothing. It's 3 days later now. At this point I've hit so many red flags I'm not even interested in checking them out anymore. But it is a great company. One of those Top-20 best places to work kind of places. I called a friend of mine who works there and they checked with the hiring manager, but got a non-reply. I'm apparently being put against the position, so that much is true.
It's not the first time I've dealt with this kind of shenanigans. My favorite is the "why do you want to work here?" question which pops up somewhere in the process. And I respond with "I don't you asked me to come, why do you want me to work here?"
Recruiters really are a waste of time and if I had spent more than 20 minutes on the phone with this guy I would feel kind of burned right now. But instead I've just added it to the pile of bizarre recruiter interactions I've had over the years.
On the flip-side, a company my wife used to work for had great success with a professional retained recruiting agency. It took a few months to finally nail down what they were looking for in a candidate, but before long they had a steady stream of qualified resumes coming in. So there's that.
I started talking to the interviewer and found out that one of the main things on his list for a candidate was to be local. Within 5 minutes we both knew this wasn't going anywhere and wrapped it up.
After that, I refuse to go to any on site interview unless I talked to the hiring manager on phone for 10-20 minutes.
If the "lead" is from recruiter to my email inbox, I ask for job descriptions, salary range via email. 98% of "jobs" are rejected base on those info. Good for salary range - No need to "chat" with any headhunter, period!
I would imagine that this would encourage recruiters to not do a shotgun approach (i.e. do any employee you can) as only the actually good employees will be profitable, and the others will probably end up costing the recruiter more than the first 5% he could get.
Of course I have no experience doing this and all figures are made up, but are there any obvious reasons of why this would not work? Maybe in the end the final percentage is higher than the typical market rate for recruiters (i.e. >10% maybe) but extended over a longer period so the recruiter would have to actually cherry-pick the candidates.
Companies want long guarantee periods, meaning if they use a recruiter and pay 25% of salary, they want a refund if the candidate leaves quickly. Most guarantees I see are 90 days.
When a company wants asks for a six month or one year guarantee, recruiters may use the rebuttal "Well if my candidate stays for 20 years, are you going to pay me a 50% fee instead of 25%?"
It's an interesting concept to reward recruiters who provide candidates that stay for a long time. I've never seen any data to suggest that new hires that come from agencies have any longer or shorter tenures than those found through other means, so I'm not sure how a phased payment system would really help change much (other than recruiters having a vested interest in their hires staying at a job for as long as possible, which is the object of contract recruiting).
Exactly what I was thinking, but of course as I'm not experienced with this I thought there could be some glaring issues with it.
I would love to see some data (even if anecdotal) from someone that tried something similar. Imagine that you can even treat some of your older, most successful employees as "passive income"; as a recruiter you made a really really good effort locating, training and making the best fit for someone, and then that someone is netting you, say, 1% of their salary every 6 months or something, for the next 5 years (haven't worked through the numbers so that might not even make sense), but replace 1% and 5 years with X and Y.
In general terms, I would like to have a recruiter in more "closer" terms. So maybe this recruiter got me a job at company A, then 3 or 4 years from now, since they really did their job and know me well, they can put me in a much better job, for say the next 3 or 4 years again, and so forth. That would mean both he and I could have continued income due to the effort we both made. He made his effort picking a really good candidate and so did I, doing my job.
Kind of like an investor. Successful traders are usually the ones that make their due diligence and thus are rewarded with the most handsome payouts. Isn't that what a recruiter should do? invest in a particular candidate and find the best place where his "investment" can payback handsomely?
Would you pay say 2-5% of your annual salary to a recruiter/agent every year? Even in years that you aren't actively looking for a job?
These are interesting questions if you think the recruiter can find you good jobs that you might not find on your own, can provide solid career advice, and negotiate salaries that are higher than what you might receive otherwise. If I can negotiate a 5% higher salary than you every time, paying me 2% every year is a pretty easy decision. Most technologists probably trust that they are as good at (or even better) negotiators than most recruiters, and in many cases they may be correct.
Great to see I'm not alone with this crazy idea. When writing the previous comment I actually started thinking if I would pay someone to actively look for the best job I can get at any given moment, and that I would probably pay for that happily. Of course, you make a serious point about considering that same payment after X years in a stable job (e.g. I've been with Google for the past 3 years... I'm not planning on changing jobs.. why should I pay this guy every year?) very interesting things to ponder over.
Again, thanks for sharing!
A lot has been written about recruiter incentives in these comments, but the market is still clearing even with extremely high fees. The reason bad recruiters can still get paid really well is because there's zero transparency and therefore almost no accountability. I think most of the problems with recruiters could be solved just by addressing this issue.
When you're looking for a good restaurant you can go on Yelp to find one, and you can tell from the reviews what to expect. The same goes if you have a bad restaurant experience -- you can write a review on Yelp and warn others about the crappy food / service / etc. Nothing really exists like this in the recruiting space, despite people really loving to write about how much recruiters suck. And a lot of them do, but what real accountability is there? If a recruiter gets in touch about a job, how do I know he's not super shady? If I'm an employer and need to hire rapidly, how can I find good recruiters other than word of mouth?
There should be a Yelp for recruiters. If you're slimy, the world should know about it, and you should have a hard time finding new business and new candidates. If you're a great recruiter who's adding real value, that should be obvious, too, so that others will want to work with you.
Some friends and I have been working on making this a reality. Check it out. Leave a review of your worst recruiting experience (worst one we'll feature on the main page). Or your best one. Or both. And if you're interested in helping us with this project, get in touch.
The external recruiters we use are in markets we don't know a lot about (like Marketing - which we are hiring for big time right now). The internal coordinator helps keep onsites organized and managing the huge amount of interview flow through the organization so that key stakeholders still have some time to do their jobs.
The low-end contingency recruiting agencies have given the whole profession in San Francisco a bad name, when in reality there are great people (like Oliver, from the post) who do great work and are incredibly valuable to a fast growing organization.
I am mostly contacted on LinkedIn, and I think, on balance, that it works well there. I've written about it here: http://henrikwarne.com/2013/08/21/linkedin-good-or-bad/
All I seem to get are the body shop type places contacting me (aka Robert Half, TEKSystems). I've told them that I would be interested if and only if it would mean a step up, go on to explain my current levels of pay,vacation, sick, bonus, etc, and say if the opportunity isn't better than that, then we have nothing to talk about.
Of course they start trying to hard sell me, and it turns out these places have zero benefits.
I'd entertain discussion with someone looking for my skills that would be willing to pay for them.
In my eyes the main thing is experience. Young recruiters who haven't made any money yet get tied up in trying to recruit everyone and they don't discriminate. They waste everybody's time - the candidate, the client, and their own. Wave 5K or 10K in front of someone a year out of school and they go bonkers - wave that same amount in front of someone who has been in business for a while, and they know how valuable their time really is.
The recruiters that are trying to squeeze round pegs into square holes haven't figured out the time management side of things yet. If they figure it out at some point, they could have a long career. If they don't figure it out in a couple years, they have to leave the industry (or bounce around between companies until they are unemployable).
Career longevity could mean that the recruiter is the best at sales and skilled at convincing candidates to take any job. But doing that isn't sustainable over years and years - your reputation will eventually catch up to you.
Find someone who has been in the business for a while with a steady work history and experience in your industry. They will be thrilled to hear from you.
It also helps build a relationship. At some point that recruiter might 'ask' you to take a job with his/her client. Saying no to someone you haven't met is easier than saying no to someone you have spent time with.
Recruiters are constantly doing little sales 'closes' during the process, building towards that big close of you accepting a job offer. It's all part of a sales process, no different than any other sales position.
Edit: changed "the reason" to "one reason"
>What would be great is finding out how much exactly recruiters and referral services charge.
The answer is anywhere between 12% and 35% of the candidates annual salary.