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"As a recruiter I typically handle salary discussions for my candidates, and I know that for most engineers that particular service is considered most valuable.

"As a recruiter I typically handle salary discussions for my candidates, and I know that for most engineers that particular service is considered most valuable. " When I've worked with recruiters I appreciated the fact that they would negotiate on my behalf. That said, don't forget that when it comes to salary, a recruiter's interest and yours are not really aligned. They don't care about how high a salary they get for you as long as they you get hired.

yellow 14y ago
Same logic with Real Estate agents. My friend's agent tried to get him to sell his house with every low-ball offer that came in...
- the_watcher 14y ago
  Only a bad real estate agent would do this. Their commission is percentage based, so a good agent will try to get you the most possible for your home. Also, it's unconventional, by try an agent who is open to dual-agent sales (represents both the buyer and seller). Their interest in that case is to get the most fair deal to each party.
  - potatolicious 14y ago
    > "Their commission is percentage based, so a good agent will try to get you the most possible for your home." That discounts the value of time. If it takes, say, 40 hours of work to sell your home for $300K, and another 40 hours of negotiations to bump that to $400K, it is not in the realtor's interest to pursue the $100K - he/she can simply pursue another $300K sale in the same time. A commission based structure tends to have weird cliffs like this subject to the details of the field.
    - btian 14y ago
      +1. Freakonomics a chapter on this topic.
- fecak 14y ago
  I certainly see that as an issue. I've written here before about how the recruiting industry could change, and my business model addresses that at least a bit. For one, almost all of my clients pay me flat fees up front, which is why I'm willing/able to advertise for them (as opposed to contingency recruiters doing free PR). I'm also transparent with my candidates. If they have two offers and my fees are different with the two clients, I think it's my duty to let the candidate know so they can make an informed decision if they feel I am showing any hint of bias towards one client (of course the difference in fee is usually nominal at best). Being retained or engaged by a client, as opposed to contingency, really minimizes the incentive to encourage a bad deal for either side in the transaction. I know I'm going to get my fee eventually, so I don't need to try to talk both sides into a marriage that isn't good for either. The real estate example is a very good analogy for most contingency recruiting models though.
fecak 14y ago
Thanks for the comments, though not necessarily true. As an agency recruiter that represents several companies, typically the recruiter is paid a percentage based on the hire's salary - so actually, their interests and yours are directly aligned in that way. You are correct though that in general, the recruiter wants to simply get a deal done. Getting an extra 10K for the candidate may result in an extra 2K in the recruiter's pocket, but if the deal doesn't happen it's 0K for the recruiter. These examples are specific to contingency recruiting, which is not the focus of my business (more retained/engaged search).
- wting 14y ago
  There was a study on how real estate agents sell clients' houses vs their own. On average, agents will keep their own properties on the market ~10 days longer.[0] If a client's house sells for $310k vs $300k, that's an extra ~$10k for the client. On the other hand, spending the additional time negotiating only nets the agent $300.[1] Typically agents will sell additional houses rather than negotiate prices on sure sales. However their behavior changes when selling their own houses. --- [0]: From Freakonomics as mentioned by vitalique and roel_v below. [1]: Real estate agent fees are typically 6%, equally split between buyer / seller agents.
  - fecak 14y ago
    And where engaged or retained search is most valuable is to get rid of this. Real estate agents selling their own home know that they will sell that house - they aren't competing with other agents to sell their own home, so they aren't pressured to sell quickly. When recruiters are compensated partially up front and have semi-exclusive deals with companies, it takes away the need to sell quick (force a hire). If I know I'm going to fill the slot, and I know that another recruiter isn't going slip in and take my fee, I'm not of the same cut-throat incentives to just make a deal happen. Again, good analogy with contingency recruiting.
  - DougWebb 14y ago
    My wife's a Realtor, so I have some insight into this. One aspect you're missing is the value of reputation, referrals, and repeat business. Going the extra mile for her clients to get them the best deal possible (which, sometimes, happens to be the offer-in-hand) has long-term consequences for getting future business. That's worth a lot more than the extra $300. Also, "selling additional houses" isn't as easy as it sounds. There's a lot of unpaid effort involved in acquiring clients and getting to an offer, before any of the negotiation starts. Time spent negotiating and baby-sitting an existing offer at least has a high likely-hood of being paid time.
regerg 14y ago
Letting a recruited negotiate for you is horrible. They have no interest in getting you a great salary. They say things like "just so I know the ballpark, how much do you need to pay your bills?" and then they will tell the hiring manager exactly what your minimum is, just to close a deal. Recruiters are good for one thing: to make introductions. Good recruiters are good for that, and deserve the SALES commission for their SALES job. Recruiters aren't your lawyer. Get two job offers, auction yourself off. That's how you negotiate.
- fecak 14y ago
  I would disagree on this. This is the second comment about having no interest in salary, and that seems to be a fairly serious misconception about most recruiting. I'm not sure where you are located, but in the US most recruiting is done on a contingency basis, meaning a fee is paid only if a hire is made. That fee is almost always based on a percentage of the employee's starting salary (could include bonus as well). Fees have a wide range, but during my career I have seen them everywhere between 15 and 33%. The counter argument is that contingency recruiters want to close the deal, otherwise they don't get paid at all. Is the easiest way to close a deal, and to make sure the deal stays closed (see "counteroffer"), to get the candidate his/her minimum acceptable level? No. You are doing both parties a disservice if you do that. You are doing the candidate a disservice by only trying to achieve the minimum. You are doing the client a disservice because although they may get the hire, the deal is not as secure as it would be at a higher number (again, see counteroffer), and if your goal as a recruiter s to help clients both attract and retain (key is retain) talent, they are better off paying a bit more to make the hire happy on start and less likely to be poached by someone else. If I know a candidate's minimum, achieved via some proxy ('Dave, I'll accept at 120 and start May 15', it is fulfilling to call that candidate and say 'Remember when you said I could accept at 120? Well I got you 128. Congrats!' Happens all the time, and feels good every time for the candidate. On the other end, I'm coaching clients about retention and not just getting someone on board. The biggest benefit to a recruiter (or any intermediary) in negotiations is a buffer. I've seen candidates do some incredibly dumb things in negotiation, such as asking for 150% of what they really are worth and expect to get, just to 'start off negotiations' - as if this were a good tactic. What happens if the recruiter isn't there as a buffer? The candidate makes the proposal, and the company says no thanks and let's just pretend we never met. Other side is a client will call and say 'your candidate was making 80 at the last job? I'll go as high as 90, but offer 60 just do see the reaction.' My response would be 'the reaction is going to be an annoyed candidate who now feels lots of time has been wasted. Lets not screw around, get serious about this.' Without a buffer, neither of these deals happen, yet both parties were willing to accept the terms of he other. If you think this is rare, you haven't been involved in enough deals with enough people yet.

yellow 14y ago

Same logic with Real Estate agents. My friend's agent tried to get him to sell his house with every low-ball offer that came in...

the_watcher 14y ago
Only a bad real estate agent would do this. Their commission is percentage based, so a good agent will try to get you the most possible for your home. Also, it's unconventional, by try an agent who is open to dual-agent sales (represents both the buyer and seller). Their interest in that case is to get the most fair deal to each party.
- potatolicious 14y ago
  > "Their commission is percentage based, so a good agent will try to get you the most possible for your home." That discounts the value of time. If it takes, say, 40 hours of work to sell your home for $300K, and another 40 hours of negotiations to bump that to $400K, it is not in the realtor's interest to pursue the $100K - he/she can simply pursue another $300K sale in the same time. A commission based structure tends to have weird cliffs like this subject to the details of the field.
  - btian 14y ago
    +1. Freakonomics a chapter on this topic.
fecak 14y ago
I certainly see that as an issue. I've written here before about how the recruiting industry could change, and my business model addresses that at least a bit. For one, almost all of my clients pay me flat fees up front, which is why I'm willing/able to advertise for them (as opposed to contingency recruiters doing free PR). I'm also transparent with my candidates. If they have two offers and my fees are different with the two clients, I think it's my duty to let the candidate know so they can make an informed decision if they feel I am showing any hint of bias towards one client (of course the difference in fee is usually nominal at best). Being retained or engaged by a client, as opposed to contingency, really minimizes the incentive to encourage a bad deal for either side in the transaction. I know I'm going to get my fee eventually, so I don't need to try to talk both sides into a marriage that isn't good for either. The real estate example is a very good analogy for most contingency recruiting models though.

fecak 14y ago

Thanks for the comments, though not necessarily true. As an agency recruiter that represents several companies, typically the recruiter is paid a percentage based on the hire's salary - so actually, their interests and yours are directly aligned in that way. You are correct though that in general, the recruiter wants to simply get a deal done. Getting an extra 10K for the candidate may result in an extra 2K in the recruiter's pocket, but if the deal doesn't happen it's 0K for the recruiter. These examples are specific to contingency recruiting, which is not the focus of my business (more retained/engaged search).

wting 14y ago
There was a study on how real estate agents sell clients' houses vs their own. On average, agents will keep their own properties on the market ~10 days longer.[0] If a client's house sells for $310k vs $300k, that's an extra ~$10k for the client. On the other hand, spending the additional time negotiating only nets the agent $300.[1] Typically agents will sell additional houses rather than negotiate prices on sure sales. However their behavior changes when selling their own houses. --- [0]: From Freakonomics as mentioned by vitalique and roel_v below. [1]: Real estate agent fees are typically 6%, equally split between buyer / seller agents.
- fecak 14y ago
  And where engaged or retained search is most valuable is to get rid of this. Real estate agents selling their own home know that they will sell that house - they aren't competing with other agents to sell their own home, so they aren't pressured to sell quickly. When recruiters are compensated partially up front and have semi-exclusive deals with companies, it takes away the need to sell quick (force a hire). If I know I'm going to fill the slot, and I know that another recruiter isn't going slip in and take my fee, I'm not of the same cut-throat incentives to just make a deal happen. Again, good analogy with contingency recruiting.
- DougWebb 14y ago
  My wife's a Realtor, so I have some insight into this. One aspect you're missing is the value of reputation, referrals, and repeat business. Going the extra mile for her clients to get them the best deal possible (which, sometimes, happens to be the offer-in-hand) has long-term consequences for getting future business. That's worth a lot more than the extra $300. Also, "selling additional houses" isn't as easy as it sounds. There's a lot of unpaid effort involved in acquiring clients and getting to an offer, before any of the negotiation starts. Time spent negotiating and baby-sitting an existing offer at least has a high likely-hood of being paid time.

regerg 14y ago

Letting a recruited negotiate for you is horrible. They have no interest in getting you a great salary. They say things like "just so I know the ballpark, how much do you need to pay your bills?" and then they will tell the hiring manager exactly what your minimum is, just to close a deal. Recruiters are good for one thing: to make introductions. Good recruiters are good for that, and deserve the SALES commission for their SALES job. Recruiters aren't your lawyer. Get two job offers, auction yourself off. That's how you negotiate.

fecak 14y ago
I would disagree on this. This is the second comment about having no interest in salary, and that seems to be a fairly serious misconception about most recruiting. I'm not sure where you are located, but in the US most recruiting is done on a contingency basis, meaning a fee is paid only if a hire is made. That fee is almost always based on a percentage of the employee's starting salary (could include bonus as well). Fees have a wide range, but during my career I have seen them everywhere between 15 and 33%. The counter argument is that contingency recruiters want to close the deal, otherwise they don't get paid at all. Is the easiest way to close a deal, and to make sure the deal stays closed (see "counteroffer"), to get the candidate his/her minimum acceptable level? No. You are doing both parties a disservice if you do that. You are doing the candidate a disservice by only trying to achieve the minimum. You are doing the client a disservice because although they may get the hire, the deal is not as secure as it would be at a higher number (again, see counteroffer), and if your goal as a recruiter s to help clients both attract and retain (key is retain) talent, they are better off paying a bit more to make the hire happy on start and less likely to be poached by someone else. If I know a candidate's minimum, achieved via some proxy ('Dave, I'll accept at 120 and start May 15', it is fulfilling to call that candidate and say 'Remember when you said I could accept at 120? Well I got you 128. Congrats!' Happens all the time, and feels good every time for the candidate. On the other end, I'm coaching clients about retention and not just getting someone on board. The biggest benefit to a recruiter (or any intermediary) in negotiations is a buffer. I've seen candidates do some incredibly dumb things in negotiation, such as asking for 150% of what they really are worth and expect to get, just to 'start off negotiations' - as if this were a good tactic. What happens if the recruiter isn't there as a buffer? The candidate makes the proposal, and the company says no thanks and let's just pretend we never met. Other side is a client will call and say 'your candidate was making 80 at the last job? I'll go as high as 90, but offer 60 just do see the reaction.' My response would be 'the reaction is going to be an annoyed candidate who now feels lots of time has been wasted. Lets not screw around, get serious about this.' Without a buffer, neither of these deals happen, yet both parties were willing to accept the terms of he other. If you think this is rare, you haven't been involved in enough deals with enough people yet.