Tuesday November 17th, 2009
"Dear Sarah: Who pays recruiters and how do I get one?"

Think this blog post is 100% wrong?
Tell me why on the "I totally disagree with Sarah" page.

If you're new to the job market - and even if you're not - your biggest source of confusion about recruiters (aka 'headhunters') is probably a simple one:  Who the heck pays them? 

(Yes, if you're a recruiter here on ERE, you - presumably - know all about headhunters and how they get paid.  But as I explained in the first "Dear Sarah" post, this series was created so that the next time you get a  question from a non-recruiting friend or relation, you can just send them this link rather than having to spend too much time explaining.)

First, a word on lexicon:  Though you and your friends may talk about 'headhunters' - i.e. the people who call you and try to sell you on a Fabulous New Job Opportunity - that's not a word used by headhunters themselves.  It's sort of like how real estate salespeople never call themselves real estate 'agents', even though the rest of the world does. 

There's a fair amount of recruiting-industry lexicon with which you may not be familiar, actually.  The more you know about the lexicon, the more 'in the know' you'll seem to recruiters, so I've provided brief descriptions below.

Anyway, it's the client - i.e. the company who makes the hire -  who pays the recruiter, not the job-seeker. 

Here's how it (typically) works:

1. The client decides they need to fill a position (also called a 'role')
2. They send their requirements (also called a 'job requisition' or 'job req') to a recruiting agency.  In most cases, the client will send their job reqs to more than one agency at a time
3. The job requisition will be assigned to one or more recruiters, who will then look through their database, make calls to their network of contacts, and/or search online to find potential candidates.  It's at this stage that they might call or email you to see if you're (a) interested and/or (b) meet the skills/experience parameters of the position
4. If they think you're a good potential candidate, the recruiter may arrange to interview you
5. If the interview with the recruiter goes well, s/he will send your profile (which could include your resume, a summary of your strengths/weaknesses, and recommendations) to the client
6. The client is likely receiving profiles of potential candidates from several other recruiting agencies at the same time
7. The client reviews your information.  If they think you might be a good fit, they tell the recruiter to schedule an interview with you
8. When the client makes a hire, they pay the recruiting agency a fee.  This fee is typically 16-20% of the new hire's annual salary
9. The client pays the fee only to the recruiting agency who sent the successful candidate (i.e. the one who got hired).  The other recruiting agencies receive nothing.

This is called contingency fee-based recruiting, because the fee is contingent upon a hire being made.

(There are other recruiting models, and fees can vary - such as much lower fees for junior/high volume roles and higher fees for very senior/executive roles - but this is the basic contingency model and the one you're most likely to encounter if you're working with a recruiting agency.)

Typically, recruiters are paid a base salary by the agency they work for, plus a commission based on the contingency fees they generate for the agency.  So when you're hired through an agency, the recruiter you've been working with gets a piece of the 20% of your starting annual salary that the client pays to the agency.

I know it sounds like a lot of money - if your starting salary is, say, $60k, then the client pays $12,000 for the privilege of hiring you - but keep in mind that a typical agency recruiter will interview 25+ candidates per week, but only a handful of them will ultimately be hired.

So how do I connect with a recruiter?

Well, this is a big topic and one we'll revisit in future posts, but the first step is to do some research to find out which recruiting agencies specialize in your profession/field/industry.  Though some larger recruiting agencies recruit for all positions, you'll do better if you hook up with a recruiting agency - or even a recruiter - which specializes in one or two fields/roles, such as IT positions, supply chain positions or clerical positions.

However, just Googling may not be enough here.  For example, if you look at the website of Canadian recruiting company Mandrake Management Consultants, you wouldn't know that they've long had a specialty in recruiting for advertising/marketing jobs - but they do.  So your best bet is to ask around:  Ask friends and colleagues which recruiting agencies they've worked with recently, and which ones specialized in your field.

While you're at it, ask your friends/colleagues for the names (and contact info!) of the recruiter(s) they've worked with.  There's nothing more pointless - and more guaranteed to generate rejection - than randomly calling recruitment agencies and asking to speak to 'anyone'.  Recruiting agencies get hundreds, if not thousands, of unsolicited calls and emails every day - they're very good at screening.  Getting the direct email/phone number of a specific person, and being able to reference someone they've successfully placed, will put you miles ahead.

BONUS TIP:  When you're asking your friends and colleagues for referrals to recruiters, don't specify that you want the names of recruiters they liked; ask for the names of the recruiters who seemed to have jobs.  Because you don't have to like the recruiter, as long as they can actually connect you to great opportunities.

Tags

candidates   hunting   job   news   Recruiters  

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http://www.head2head.ca/blog.php?pl=1d32a4b18972b2a1837974c6380f39ff

Comments

Corey - December 8th 2009 11:34 AM
 
Funny to realize I have been approaching recruiters wrong all this time without knowing it, big lesson.

Anonymous - December 11th 2009 2:35 PM
 
Ok so I have a funny question. If the recruiter is paid a % of the salary then shouldn't they be trying to get me MORE money??

About the Authors

Paul Dodd
Co-founder and President
Head2Head Canada

Paul has one simple goal: To help companies hire great people - and get the most out of every recruiting dollar they spend. That's why he's recognized as one of the best recruitment-industry thinkers in Canada.

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