Why Working with a Recruiter Might Be a Waste of Your Time, and how to Maximize the Relationship

Recruiters, like sales people, are in the business of turning strangers into clients.  Time is the only currency recruiters have, and they know which candidates will product money, and which will not.  If you've experienced utilizing a headhunter, I'd like to hear from you below in the comments.  

This post serves two purposes:

• To provide some basic education on what agency recruiters get paid to do (*NOTE, this post is NOT about corporate recruiters that work for the hiring company directly)
• So recruiters (myself included) can easily explain to candidates why they can't help them, by simply sending them this link.

WHEN USING A HEADHUNTER IS NOT YOUR BEST OPTION

At some point in the first 10 minutes of meeting a new candidate, I ask this in italics (keep in mind I only work on software sales roles – nothing else):

“So tell me a little about what you’re looking for.  To start, be as broad or specific as you’d like.  Are you seeking a startup with no sales leader, a big equity package, where product/market fit is still being developed? Or, more like sales rep #1500 at a publicly traded company?  What kind of boss do you think makes sense for you right now?  Who do you ideally want to be selling to – the CMO?  CFO?  CHRO?  Are you location restricted? Do you prefer to work from home?”

Then a 28-year-old Bay area sales rep that was an SDR (appointment dialer/setter) 3 years ago answers:

“I’m looking for sales leadership roles.  I want to lead a team.”

At this point in conversation, my goal has changed.  I'm now trying to get off the phone as fast as I can, because this person is stealing someone else's time that I might actually be able to help.

When the job seeker has zero relative experience to the position he/she seeks

Why can't I help this person?  Because he/she wants to become something that he/she has zero experience of ever doing.  Zero experience has many shades of grey, but can be any of the following as examples (all real, recent examples):

• Investment banker currently making ~$300k+ that wants a $150k base salary to "try software sales", with zero business development experience in banking.
• Oil & Gas journeyman that heard "sales is where the money is at, and wants to interview for Enterprise Software Sales positions."
• Individual Contributor sales reps that have never managed a single person in their career, that want to become a sales team leader.
• Transactional, non-SaaS (Software-as-a-service) sales reps that want to become Enterprise Software Sales Reps.

To be clear, all of these are possible.  Very possible.  I would absolutely never discourage someone from trying to grow or try something new, but I am not the recruiter for you if you are the candidate above, and I want to take the time to explain why rather than just ignore you.

Why hiring managers hire recruiters in the first place

First, you have put yourself in the shoes of the hiring manager. Here are some reasons why that hiring manager might use a 3rd party recruiting firm:

• 3rd party recruiters work fewer jobs than corporate recruiters, so they have time to actually hunt and find candidates that aren't actively looking.  This equates to speed for the hiring manager.
• BRAND.  One HR tech company in SF had 148% turnover in 2015 in sales and marketing.  148%.  One scathing Glassdoor review after another is followed by what is obviously a rebuttal post from a member of the management team, and even with those fake posts they struggle to stay at an overall company rating of 3.0+ (in case you didn’t know, a 3.0 Glassdoor rating is poor, and < 3.0 is abysmal).  The beauty of a 3rd party recruiter is that we give a company like the one above a chance to market the opportunity disassociated with the brand.  I recently placed a sales rep at a company in this exact situation.  My message to the candidates:  "Since the new EVP of Sales came on board early last year, Glassdoor ratings are 4.2 on average.  The entire leadership team is different than the one that created all the turnover you've heard about from your friends."  A corporate recruiter will have far less success with the same exact message, because they are too closely tied to the brand.
• Maybe you are about to fire your head of sales.  You can’t exactly post that job, right?  Sometimes 3rd party recruiters are used to find a replacement before the person in the role is let go.  While this is more common in executive ranks, it does happen in small companies for mission critical roles.
• Increase in quality.  I'll use my own firm as an example.  I've been a software sales rep and won 2 president's club awards.  My partner has won 10 of them and hired 200 reps as a sales leader.  How many corporate recruiters have this background?  Who do you think the top 10-25% of sales reps would rather talk to?  Managers hire firms like ours to reach better talent that won't respond to their corporate team - because every other corporate team is also reaching out with same/similar messaging.
• No Poach. Let’s be honest – recruiting is not always played fairly.  Sometimes companies hire recruiters to poach from companies where they have no poach agreements.  This ‘washes their hands clean’.  Nobody will admit this, of course, but trust me that it happens.

How Recruiters get paid for their services

Another thing to understand is the general business model options for which a company might engage a firm.  There are 3 general models.  If you are a job seeker and unfamiliar with this, pay particular attention here because as we say in sales, “Comp plans drive behavior.”

• Contingent* - is exactly what it sounds like. A recruiting fee is paid contingent upon successful placement of a candidate.  Other things like payment terms (when) and amounts (such as 27.5% of first year’s pay) are negotiated, but fall within pretty predictable ranges.  *Important to note for job seekers:  It is most common for companies to use more than 1 contingent firm at a time, creating a “race” against each other.  If you’ve ever had a recruiter tell you a job is “hot”, this is why.  All of these jobs are hot :)
• Project - This can be modeled in a variety of ways, from a cost-per-placement to a time based work effort. Usually, if not always, there are multiple jobs in play as a package, and other recruiting firms are most often not competing.  Companies use project recruiting to open new stores/locations, staff up for holidays / seasonal needs, or any situation where a large, predictable spike in volume occurs.
• Retained – is also exactly what it sounds like. When a recruiter is retained, he/she is the only recruiter working on that job.  The payment model is much different, and allows the recruiting firm to truly invest resources up front (in theory) to provide more focus and energy to fill the job.  Typical payment %’s are higher than contingent, often 30-33%, and paid out like this:  11% at signed contract, 11% at interview of a slate of candidates (usually 3 or 5), and 11% of one of those candidates are hired.  If you aren't an executive or in the $200k+ salary band, you've likely never met or talked to a retained recruiter.

Now that you understand why a manager might use a recruiter, what it costs, and how recruiters are motivated through the pricing/business model, the rest of this advice will make much more sense.

In another post, I talked about CYA vs. DNA hiring.  I recommend reading it (especially if you are in sales or sales recruiting) to better understand the hiring manager mindset.  Know that the vast majority of managers will tell you they look for DNA, but when you present a slate of candidates you find out quickly most are actually CYA style.

3rd party recruiting fees can add up quickly.  27.5% of $100,000 is $27,500.  

Remember that 28-year old Bay area sales rep at the beginning of this post?  
Sales leadership jobs start at $125,000 and go to ~$200,000 for the base - at the ones we work on.  Remember the recruiting fee we discussed - 25% of the salary?  $150,000 * 25% = $37,500.

Nobody is going to pay me $37,500 to hire you as a sales leader for the first time in your career.  

We don't get paid to find career changers, we get paid to find people that already know how to do the work.  There are many paths to changing your career, including internal promotions and transfers, personal networking, and following your peers/friends by way of referral.  When this kind of money is on the line, expectations of the candidates we present are very high.

Here are a few common reasons why candidates get rejected by hiring managers using 3rd party recruiters:

• The job hopper. This is you miss millennial.  The wander-lusting, music show chasing, brunch champion socialite with 178,000 Instagram followers, and 37,000 Snaps.  8 months here, 6 months there, seldom a job longer than 2 years on your profile. “Oh but I lasted 1.5 years at Yelp.” Newsflash:  nobody is trying to poach from Yelp.  I’ve never heard a hiring manager say, “Can you dig around and find me a really good Yelp sales rep?”  Sorry yelpers.
• Zero domain experience. Let’s say I’m recruiting for a job selling Hadoop SaaS to the CIO’s team.  You really want the job (let’s face it, mainly because it is $140 base / $280 OTE and you get to live in Denver).  But, you have never sold to the CIO.  You’re currently selling email marketing tools (that don’t work) to a marketing manager.  What you are doing now simply doesn’t translate to selling to detail oriented, deeply technical buyers.  The deal cycles are different, the buyer profile is different, the average selling price is very different.  Many managers will take a pass on your profile when other contingent recruiters are presenting current Hadoop SaaS reps.  I wish this weren't the case - believe me!
• You worked for who?  Nobody has heard of any company you’ve worked for.  A mixture of house hold names and high risk startups is fine, and actually a very sought after profile, but for some hiring managers, your logos do much of the talking.

 Remember, this is not a universal truth, but rather a reality of working through a recruiter that is being paid $30,000+ to find the perfect candidate.

When recruiters talk shop, we often commiserate on these exact situations / topics above.  That is because we see companies making these types of hires all the time, just not when $30,000 is part of the equation.

When to work with a 3rd party recruiter

Using a headhunter will be most beneficial when you want to perform the same job for a different company.  No matter the reason (change of location, product, boss, etc), recruiters are paid to find people like you.  It's that simple.

In Summary, it is expensive to hire headhunters.  We get paid to do intensive direct sourcing of very specific skill sets.  We do not get paid to find people that want to re-invent themselves, or manage people for the first time.  There are many channels/ways that companies make those hires - it just isn't usually through 3rd party recruiters.

Want to be a headhunter's favorite candidate?  Want to maximize your results?  Do these things to stand out:

1. When you respond to InMail, provide contact information!  Nothing is more annoying than getting back a message saying "call me" with no number.  We can't take action on that, and we have to burn another InMail to get your number!
2. Don't be afraid to connect.  A connection helps bridge the gap between when a recruiter might have the right job, and when you might actually need one.  By not connecting, you are shutting off yourself to that recruiter.  What do you gain from that?
3. Oh yeah, you keep from getting spammed, right?  Well, maybe, but how about this strategy:  Create a canned response to send to recruiters you don't know.  I've listed an example below*
4.  Provide a resume early on.  You aren't going to be submitted with your LinkedIn account only.  Sorry, this just isn't the norm (I wish it were so).
5.  If you like the recruiter, refer your friends to him/her.  We always remember who brings us great people.  Your name will be more top of mind when we have a role suitable for you.

*Sample generic response to recruiters:

Thank you for your InMail.  I am not currently seeking new positions, but if I were to engage, it would be because you sent me the following:
-A marketing manager role with a brand that I've heard of
-Locations:  San Diego, Austin, Salt Lake City, Orlando, Nashville
-Boss:  Not a first time manager, but someone seasoned that will mentor me
-Comp:  100,000+ base salary
-Benefits:  401k matching, HSA plan, dental, and vision are important to me
-Job Specific:  I want to work on a struggling/underperforming brand that is ready for a complete turnaround.

By using that message, you've now put yourself in a position to benefit from that recruiter at some point in the future.  By ignoring recruiters completely, you invite yourself to receive more "blind guesses."  This copy/paste takes 10 seconds, and you'll find it is well worth the time it takes to use this approach.

Welcome your thoughts.  Did I miss any reasons to work with a recruiter?  Do you generally agree with these lists?  Any stories to share good or bad?