dancing devil

Recruiters: Dancing with the Devil

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It is difficult to get a man to understand something when his salary depends upon his not understanding it. – Upton Sinclair

For the longest time in my business, 9 years in fact, I was able to avoid using a recruiter. I’ve personally spoken with over 1000 candidates and conducted hundreds of interviews in the course of that time. 9 times out of 10, when we wanted to fill a position, we could do so within a couple of months.

At the end of 2015 we had been 6 months without filling a critical design role for the company. I had uncovered every rock. Met with every contact. For one reason or another, I couldn’t get someone in the door that would make a great mutual fit. Then the day came, it was time to make a deal with the devil or risk a mutiny amongst the rest of the team. I chose the devil and engaged a recruiter, several in fact. It wasn’t long before I wanted to kill them all (kill is harsh, lets go with temporarily injure but with the ability for a full and speedy recovery)…

Note: I am using the term “recruiters” throughout this post as a reference to all individuals in the recruiting industry (firms, individuals, etc.)

Why recruiters do not sit well with me…

They have misaligned incentives.

People respond to incentives. As utterly obvious as this point may seem, we are amazed at how frequently people forget it. It often leads to their undoing. Understanding the incentives of all the players in a given scenario is a fundamental step in solving any problem.”

– as described by Levitt and Dubner in Think Like a Freak, 2014 (worth a read I might add).

This is really the root of the problem. Most of the issues with this industry stem from the fact that the recruiting industry by and large suffers from the symptoms of misaligned incentives between themselves and their customer. Similar to a real estate agent, or other other brokerage/middle person type of service. Recruiters only get paid when the deal is done. Their incentive isn’t necessarily to find the best fit, just to find…A fit. As long as they can accomplish this without making either party too uncomfortable or upset then they get to collect their check and move on, job well done.

I get it, everyone responds to incentives. Especially the kind of incentives recruiters get paid. In case you aren’t aware, typical recruiter fees range from as low as 10% to as high as 30% of the first year’s salary. Even genuinely nice and altruistic people have a generally hard time doing the “best” thing when their own personal incentives create a contradiction.

It’s a dog eat dog kind of industry.

Similar to the financial industry, its cut-throat. Most recruiters are heavily compensated via commission and less on salary. Akin to their misaligned incentives, most choose to play the volume game which always naturally sacrifices quality. It’s easier for them to call 200 candidates a day and 30 companies to see if they can get lucky just once than to take 30 days to form a relationship with 1 company and 10 candidates. Its simply a numbers game and they play it quite feverishly. Think of “Wolf of Wall Street” without the drugs and prostitution, assumingly. I can only assume their hiring process is relatively the same, throw some new hires to the wolves and see what cream rises to the top.

They are a tale of two faces.

They are sellers. Their job is to sell the employer on the candidate and the candidate on the employer. Their goal is to get as much of the right information from the candidate to be of benefit to the employer so as to get as much information out of the employer to help the candidate seem more appealing. To the extent that they will spoon feed candidates information they know the employer will want to hear. I’d have to catch myself on giving away too much of what we were thinking about a particular candidate. For instance, we take a lot of stock in the subtleties of the interview process, for instance, do they send a followup email after a conversation or interview? It still surprises me to this day, how few candidates do this.

Anywho, I mentioned this to the recruiter after having had several candidates not do so. Sure as snot, every candidate since has sent a thank you email afterwards. I’ve also been asked to let them sit in on interviews (which I decline without hesitation), had excuses made as to why they are late or unprepared, and been pressured to make a hiring decision. All things you might not prefer to see from someone who is supposed to be providing you a service.

They drive up the market.

Who puts out a majority of the salary reports? Recruiters. Who tells employers what the market rate is? Recruiters. Who makes promises to candidates that they can find a position that makes 20% more than what the candidate is currently making? Recruiters. These are all activities that drive up the market price of potential hires. Just like in the movie Wall Street, recruiters are playing the Gordon Geckos of the world.

Of the hundreds of candidates I have spoken with over the years, one of the standards questions is to ask what they are currently making or desire to make. Rarely, and I mean rarely, does it ever coincide with the market salary information provided by recruiters or inline with what the recruiter says we should be paying a particular candidate. They are churning the market. Every team member at my company gets hounded by a recruiter at least once a day. Some have been so bold as to call the office and walk down a list of names of everyone working there, it was hilarious indeed.

The net nut.

All of these issues really just stem from a the original problem of misaligned incentives. Find as many candidates as they can and place them at as many companies as they can. Like any industry, their are some recruiters or firms better than others, but to be honest, the stories and examples listed above are simply the status quo of the industry. I intentionally left out the even more egregious examples of dealing with recruiters. Most of the references noted here are stories from the recruiting firm I actually liked the most, at least in regards to the quality of candidates we received.

In the end, I chose to dance with the “devil” because our own recruiting efforts and involvement weren’t up to par to be able to find the right hire when we needed it. Essentially as a business owner I could focus on applying greater effort into amping up our own internal recruiting abilities and marketing, or rely on a recruiting firm and roll with the punches of the industry. One would have to break down the time value of effort or opportunity cost to make an informed decision as to what is better for their business. That sounds like a post for another day. Typically I don’t like to rant or pose problems vs solutions. Now that I have therapeutically put my feelings in the open I’ll be sure to tie in more purposeful, solution oriented conversation centered around recruiting in future posts.

Thanks for reading.


Russel "The Backboard"

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