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I laid out something similar here on HN last summer and Atlay (of 10x) was one of the first to comment. (https://news.ycombinator.com/item?id=4555165 https://ne
by fecak 14y ago
I laid out something similar here on HN last summer and Atlay (of 10x) was one of the first to comment. (https://news.ycombinator.com/item?id=4555165 https://news.ycombinator.com/item?id=4555165) As a longtime tech recruiter, what I find most valuable about the model is that it is much more geared towards helping tech pros focus on what they do best (code) and not have to worry about what they tend to do worst (handle the business side of their work, negotiate, etc.). I haven't switched my business into an agency model at this point as I think there are still a few kinks to be worked out.
Here is some recruiter-speak (what we are trained to say) that might make sense to some of the contractors out there or at least sound familiar. If you are working with a recruiter and you ask for $125/hr, and you feel that is a very fair market rate for the work you will be doing, and the recruiter is able to get the client to pay say $130/hr, chances are you won't care because you are getting your 125 and the recruiter is making almost nothing. So let's now say that the recruiter is an excellent negotiator and gets $150 - should you (as the coder) get more because the recruiter was able to negotiate a higher rate? At what point should the recruiter be rewarded for doing a good job negotiating? If the recruiter is getting $250 total and you are only at $125, surely you will feel slighted - but if $125 is the market rate for that skill, should the recruiter not be rewarded for the ability to negotiate and get a higher rate? I could argue both sides of this.
One way to alleviate part of this problem is to essentially split the difference. If you come to me asking for 125, let's say my standard cut is 10% (which is low, but this is just an example) - and anything I get above that 10% we split. So at 137.5, you are at 125 and I'm at 12.5 (10%). If I get the client up to 150, I get my 12.50 (10% of your 125) + 1/2 of the additional 12.50 (150-137.5) for a total of 18.75, while you get 131.25. This way the recruiter is rewarded for getting a higher rate, and the coder doesn't feel like a victim.
Unfortunately, most recruiters won't reveal the bill rate (paid by the company) to the coder or the coder's rate to the company, so all sides are in the dark except the middleman.
Almost all recruiting models are quite imperfect and have some really disturbing incentives for the recruiters (http://jobtipsforgeeks.com/2012/09/17/disrupt/ http://jobtipsforgeeks.com/2012/09/17/disrupt/). Transparency between all parties is something I am offering my candidates so they can use their best judgment as to whether my advice is clouded by a higher fee with one company over another. Transparency is the real key to solving many of the problems in the industry.
The agent model seems to be the right track, and hopefully we'll get it right some day.
- roc 14y ago> "This way the recruiter is rewarded for getting a higher rate, and the coder doesn't feel like a victim." Fair recruiter reward for results is also the case when the recruiter just takes a flat percentage. And in trying to define a 'minimum acceptable rate', you'd be incentivizing all sorts of odd behaviors, as recruiters would preference the gap between 'acceptable' and 'final' rate, rather than a higher final rate. You'd have created additional pressure to mask final rates, depress clients' understanding of their own value, etc. Those are not remotely healthy incentives for a client/manager relationship. e.g. placing a 150 for 180 nets you 30. placing a 180 for 200 nets you 28. how many 180s do you expect to keep? what conversation do you imagine taking place when a client says "we should bump up my minimum from 150 to 180"? Rather counter to your goal of keeping coders from feeling like victims, that incentive structure is maximized when agents explicitly take advantage of coders who least understand their value and then keep them there.
- fecak 14y agoFair recruiter reward for a flat percentage? Fair to the talent, certainly, but assuming I'm getting a low flat percentage that is much better for the talent. If I'm at 10%, you ask me for $100, and I get you $300 because I'm a master negotiator, I just made an extra $20/hr and you made an extra $180/hr. I did all the work there, didn't I? Is your coding going to be 3 times better because I negotiated you a 3 times better rate? Something to at least consider, from the recruiter's standpoint. Odd incentives are so deeply ingrained in recruiting that it's almost impossible to get them out of the system. Recruiters have the incentive for motion - people leaving jobs all the time, regardless of whether it is a good career move. If an agent had tech talent paying $X,000 per year to tell them which moves were best for their career, that would be much more of a positive incentive for all sides. Instead, the incentive is for recruiters to get people to change jobs, regardless of how happy they are now or how happy they will be in the new job. The pressure to mask final rates is much higher under current conditions. Take that incentive out entirely by showing your employees/contractors the invoices that you are billing the company. Depressing a candidates understanding of their own value is a valid point, and very unhealthy. I don't think agents can take advantage of coders who understand their value, as they are able to leave. At a former company, I saw consultants leave over as little as $5/hr. The only thing that prevents coders from being taken advantage of by recruiters placing them for contract work is the coder's knowledge of their market value. If they know that, they should never get taken advantage of. Again, if they are being paid 'true market value', and a recruiter is able to negotiate a rate well above market value, that isn't taking advantage of the coder - that is taking advantage of the company paying the higher rate.