Talent Crunch

Dearest Recruiters: Your System Is Broken

used car salesman Dearest Recruiters: Your System Is BrokenThis is a guest post from J.D. Conley, an entrepreneur and technical director at Playdom. A version of this post originally appeared on his blog.

In recent months I have received an email or phone call from at least one recruiter per day and I haven’t even worked for Google or Facebook or one of those other Golden Names. Last month, out of sheer frustration with the lack of quality, I wrote an open letter to recruiters titled Dearest Recruiter. I’d like to expand on that now that Raiders of the Last Nerd made the front page of Hacker News yesterday and went a bit viral around the geek ecosystem.

The recruiting industry is broken. I’m not talking about in-company recruiters here, but those outside agencies like the one Mr. Carvajal runs. There is a horde of non-technical, outgoing, sales people trying to court highly analytical, mildly autistic, geeks. After fielding calls and emails from recruiters for the last 12 years I’ve grown a pretty thick skin and have become very defensive. When I speak to a recruiter I assume everything they say is an attempted manipulation. I know that both myself and the company for which they are recruiting are getting ripped off. I will often just hang up on them. They remind me of the slime I had to talk to every night during dinner before the Do Not Call Registry stopped most cold call telemarketers in their tracks.

But on the other side of the coin, many geeks don’t know their value, or don’t know how to assert it, and the recruiters take advantage of that. Let’s say you are recruited through one of the bigger tech recruiting firms such as TEKSystems or RHI. While you’re on contract they’ll probably take at least a 50% cut. Expect it to be much more if you’re inexperienced and don’t negotiate.

When I started out in the industry I was much less jaded. In 1999, after dropping out of my second semester of college, I was referred by a family friend and took my first programming job at a ski boat manufacturing company. School was way behind the curve on technology and utterly boring for me. Like most geeks in my generation, I’d been messing with computers since I was five years old and programming somewhere shortly thereafter (it’s a fuzzy memory now). I grew up in a small agricultural town and had no idea what wages should be or how to find out. This job paid a whopping $8/hr when minimum wage was $4.25. By 2001 I was making a stellar $13/hr. My friends though I was rich as I was living above the poverty line. But I got bored at that job so I found this cool web site called Dice.com where I could post my resume. This was my first experience with recruiters.

They were all very nice people, these recruiters. They saw some fresh meat in me. A sucker. They pitched me to their client as this awesome young rock star. I was paid $35/hr (~$70k/yr). I later found out the company was billed more than twice that amount. Was I really worth more than double that? And why didn’t they tell me? My next position was also through a (different) contracting company. I was paid $45/hr (~$90k/yr) having 3 years of professional experience. I found out well after the fact that they billed about $100/hr. That really got me thinking about recruiters.

If you’re a company and have a contractual relationship with a recruiting firm for direct hires, they’ll probably take something like a 25 percent cut of the first year’s salary of whoever they refer to your company. Of course it’s in the contract. We had one of these at Hive7. On top of that, as a manager, I’ve only had mild success with talent acquired through recruiting firms. The best hires I’ve made have always been through my own network via referrals. Ouch!

Transparency is recommended. Us geeks are information and knowledge addicts. We learn and digest everything we possibly can. We embrace transparency. Just witness the popularity of the Open Source Software movement and how much value we place on being a part of it.

Look. We know how the recruiting industry works. This antiquated people-trade reminds me of another slimy role that is currently being blown to pieces. If you tried to buy a new car 10 years ago you’d have to go to a dealership, haggle with someone, get ripped off anyway, and walk away feeling dirty. Nowadays when I buy a car I do so online. I send emails to as many dealerships as I would drive to and ask for quotes. They provide quotes, and many provide a copy of the actual invoice they received when purchasing the car from the manufacturer. Of course they also receive some kickbacks for volume and other special programs, but you can still walk away feeling like you weren’t completely ripped off. The salesperson makes a hundred bucks for a few minutes work and you get a car.

I’m sure we’ll see this level of transparency and marginalization of recruiters in the next 10 years. Just like the car salesman, technical recruiters are becoming largely irrelevant. Online social tools like Facebook, LinkedIn, Twitter, Google+ are expanding the available talent network one has access to. Up-and-coming geek-oriented job sites like Stack Overflow Careers are putting the tools into the hands of the hiring manager or HR department. All that’s missing is a good aggregator of all these that can send me positions that would actually be interesting to me.

I don’t know much about the tech scene in NYC, but I have been contacted by recruiters there. They haven’t had any more to offer than people over here in the San Francisco Bay area. They’re all the same slimy salespeople trying to convince you of their golden opportunity. I was going to use a used car salesman analogy here again, but I think something more fitting would be Viagra spammers. It is apparent that recruiters blindly send emails to hundreds of people hoping there will be some sort of a response.

Most of the job reqs that come my way via recruiters are for Developer Lead or Senior Engineer type positions. Salaries are usually in the $100k-$150k range. There is the occasional director-level position, but salaries are roughly the same. After reading an article like Raiders of the Last Nerd, you’d think that we were back in the .com boom with companies throwing sports cars and huge signing bonuses around. But that’s just not true. The cases are much more isolated.

In the interview Dave Carvajal stated that “We came from a place over the last two years where people were going to start-ups for below market [rates], People aren’t necessarily going to do that now.” This is partly true. But it really depends. It shows some of the lack-of-understanding of how the geek mind works. Maybe in the financial sector it’s all about the money, but to a great hacker it’s more about the project.

The best engineers out there do not work for the money. Sure, they’ll calculate how much their upside is at various acquisition prices, but they don’t really care. Things like solving interesting problems, using new technology, making a visible impact, and working with a fun team are much more compelling for those that would work for a startup.

For start-ups, it’s about the equity. We’re in the middle of a start-up boom. Services like AngelList are making capital more easily accessible to good entrepreneurs, and incubators like Y Combinator are teaching young entrepreneurs the ropes. These startups are willing to offer large amounts of equity to early employees in exchange for sub-market pay rates. Any decent founder out there deeply believes her company is going to succeed and thus believes her equity is worth significantly more than any amount of cash. That, and, they don’t have much cash to throw around.  There are a lot of very small funding rounds of < $1MM happening. That doesn’t give a company without significant revenue much buying power if they want that to last a year.

Do you want to be successful in recruiting someone? Try this on for size.

Show me MY money. On first contact, tell me how much money I will make. The exact dollar figure. If  you would be willing to pay $300k/yr for a role for the right person, just put that amount in the job. Us engineers know that there is a very high variance between the least productive and most productive members of our kind. Why not try paying for that?<

Tell me about the project. The project is just as important as the cash, if not more so. Tell me what it is. Don’t tell me in weird abstract terms you don’t understand. If you can’t tell me what it is, don’t bother talking to me.

Show me YOUR money. As a recruiter, how much money are you going to make on the deal? In our heads we’re already doing the math and assume you’re ripping us off. You might as well tell us, and break it down by the hour.

Don’t ask how much I make. We know that asking how much a person makes right now is really just gathering negotiation leverage. It’s also wasting our time. You’ll take that, then go back to the company, then get a new number, and blah blah blah.

Tell me the company you’re recruiting for. The abstract job req is useless. Just say the name of the company. I will want to research them. It’s more about the company fit than the particular job they’re hiring for. People almost never end up doing the thing they’re hired for.

Let me talk. Many recruiters all-too-often steam roll conversations. This is super annoying. That’s not how you sell.

Don’t call me. Oh yeah, and avoid calling me at all costs. Email or LinkedIn or text or something is much preferred. Phones are horrible. I hate talking on them. I’m not alone.

Don’t pretend you are technical. You bring up some recent tech news or talk about how you used to make web sites for fun or how awesome “that C language” is. We know you are just manipulating us to try to get us to open up to you. Give it up. Admit you’re just a pimp trying to pick up a new ho.

Have something compelling. When you’re recruiting experienced talent out of a comfortable position you had better have something great. Either that’s a truckload of cash (think multipliers on current salary), a first-employee position, an responsibility level-up, or a really freaking cool project. A combination of this stuff is preferred. Mention it upfront and don’t dance around the important facts. We do not want to interview without knowing this stuff.

It’s a strange world we are living in right now. Jobless rates are insanely high, and here I am complaining about too many people wanting me to interview for jobs. It makes me feel extremely lucky to be in this industry.

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Comments

  1. Anonymous says:

    I think placing full time professionals in jobs for a fee is a very different business than running a temp company.  I’m not sure you have any more right to know what the recruiter (talking about full time placement) is making than they have a right to know what you are making.  The company is willing to pay them for locating talent and that’s it.  But yeah, they’re salesmen and you can hang up on them just like you would any other salesman.  

    1. JD Conley says:

      Yes, they are quite different. But they both load my inbox and voicemail with spam. I have been receiving more permanent placement solicitations recently. I’m assuming the temp/contract agencies try to prey more on the less experienced blood.

      Of course I don’t have a “right” to know what their rates are. I don’t have the right to know the exact business model of any service. But all recruiters certainly know what I’m going to make. Also, since full time placement  agency contracts are often based on percentage of first year’s salary there is a really annoying conflict of interest between the employer and the recruiting agency with regard to salary range.

  2. Anonymous says:

    I like your post and I agree that recruiters are basically a parasitic disease that we need to be rid of. There’s no reason technology can’t do their job better and more efficiently. 

    That said, a few things.

    First, if you’re contracting through a recruiter then yes the company is potentially paying up to 2x your rate to have you. Yes it would be nice if they would give you that money instead. However, realize that if you worked for the company full time then you would probably be getting the same rate of pay, possibly less, and the company is still spending 2x on you. Why? Insurance. Benefits. All kinds of other costs. Some of these still exist when you’re a contractor, sure, but don’t forget there’s a high likelihood that you’re expensive no matter what. 

    Second, the reason a recruiter won’t tell you who the company is is because they don’t want you to just go to the company directly and cut them out of the loop. Yes, this isn’t your problem and it’s still a crappy thing, but there’s a reason that they won’t tell you other than they’re just slimy. 

    Some of your other points are fairly unreasonable demands of recruiters (tell me how much you make don’t dare ask how much I make) but since the existence of recruiters is an antiquated and unreasonable concept in and of itself, it’s a fair trade.

  3. Anonymous says:

    Utter nonsense, both from the author and by those who have left comments.   In no particular order, here’s why and, as a disclaimer, I am an IT recruiter who works for one of the large, global firms:

    1.   Technology has failed to replace recruiters – corporate and agency.  Despite the likes of Monster, Careebuilder, etc., Vendor Management Systems, online Applicant Tracking Systems, social networks, etc., the IT recruiting business is in healthy shape.  The fact is that most hiring managers do not have the time – or skills – required to source and recruit qualified candidates.  Technology may help them create a pool of suspects, but it cannot weed them out to determine those who are a technical, financial and cultural fit.  This takes people.  And if this were not the case, why is every staffing shop worth their salt busier than a one-armed paper hanger?

    2.  Recruiters are not parasites – they are simply providing a service in return for compensation.  This is no different from attorneys, doctors, dentists and any other profession where something of value is delivered in return for money.

    3.  When placing resources on contract there is, of course, the Pay Rate and the Bill Rate, the latter of which is what is charged to the employer by the agency.  Why does it matter what you, as a resource, are being billed out to the client as long as your hourly rate is competitive and meets your needs?  If you’re making $50 per hour and I’m billing the client $75 per hour – and $50 more than meets your needs – why care what the bill rate is?

    And still on this topic, note that if I bill you out at $75 and you’re earning $50, this doesn’t mean  I’m raking in $25 per hour.  Out of the $25 is deducted my burden – which is typically 16% – 21% – to cover the costs of payroll, G&A, etc..   So this talk of “recruiters making twice what I make” is nonsense.

    4.  Maybe I am bring dim, but I don’t see the conflict of interest between an employer and staffing agency re: salaries and contingency fees.  What am I missing here?

    5.  Not all technical recruiters are, er, technical.  Just like there are developers out there who fake & bake it until they are ultimately found wanting.  However, many recruiters, are – as is the case with me – rather technical indeed.  Not to the point where they can write code, of course, but they know enough to be dangerous, can smell B.S. from 50 paces and identify those who are the real-deal, versus those who are not.Anyone can document a list of technologies on their resume.  However, if you can’t articulate HOW you have used said technologies, to what end, and the business problem(s) that were ultimately solved, I’m going to have serious reservations as to how good you really are.  Trust me – for every faux recruiter, there are 5 times as many faux IT guys out there.

    6.  Many IT guys act holier than thou and think the sun shines out of their arses.  Speaking as one who spent 12 years in IT before getting out, suffice it to say that the industry is stuffed to the gills with prima donnas who will change jobs at a moment’s notice for a paltry hourly/annual pay increase.  And some of these guys call recruiters parasites?  Spare me.  Not to mention, of course, those who lie on their resume, over-inflate their experience, ask a buddy to perform a phone interview on their behalf so as to secure a face-to-face, make outlandish claims re: their skill-sets, etc..  

    7.  When I talk to potential candidates, if the first question from the the party’s mouth is, “What’s the salary/rate?”, I’m done.  Conversation over.  If the money and not the work itself is what is top-of-mind, chances are you won’t be a suitable candidate.    We all have our minimum number, of course, but not all opportunities are created equally – all have their pro’s and con’s.  If the work is secondary and money primary, I’m going to wish you well and bid adieu.

    8.  Recruiters are, of course, in sales.  And yes, we’re trying to sell you a job, just as a corporate HR department or hiring manager will [well, they should, but many don't].   However, a recruiter gains zero if they place the wrong peg in the wrong hole.  Why?  The resource will either quit or be fired which means, a) any commissions earned have to be returned; b) the recruiter has to scramble and find a suitable replacement in a matter of hours; and, c) the customer is pissed off.   If you’re not a fit for a role – then you’re not a fit.  Horses for courses and all that.  If I believe I have an opportunity which might interest you then I’m going to give you the pitch, but if you’re not a fit to begin with, I’m going to talk to someone else instead.

    9.  Finally, what many in IT don’t realize is that a good recruiter will make per year 2-3 times what your typical Architect or Tech Lead will.  As I wrote above, I spent 12 years in IT – as a consultant and senior management – before throwing in the towel.  The people and technology may change constantly, but it’s the same-old-same-old – putting 5lbs of sugar in a 2lb bag; 100+ hour weeks; is it a bug or feature?, and so on and so on.  When in IT my highest salary was $135K at the Director level reporting to the CIO.  As a recruiter, I’ve earned more than this number consistently and this year will make almost $300K which is more than many CIOs.  So, I get paid well and enjoy the satisfaction of placing talented individuals in positions which meet their professional and personal needs.  In short, satisfaction where it matters.   Can all IT guys feel the same way?  I’m not sure they can.

    In summary, you, Mr. Conley, need to climb off your high-horse.  You’re an engineer – big deal.  There are supply chain managers for manufacturers who face challenges 10 times more complex than your own and get paid far less, even though they may possess years of experience and a slew of bona-fide academic credentials [as opposed to shitty Brainbench scores].  Recruiters are only parasites until you find yourself out of a job, at which time you come running saying “place me, place me”.  There are horrible IT guys out there – just as there are recruiters –  and, again, the good ones earn more than most IT guys.   So, before writing another column as nonsensical as this, I suggest you do some homework.

    1. Bits says:

      > So this talk of “recruiters making twice what I make” is nonsense.
      > When in IT my highest salary was $135K at the Director level reporting to the CIO. As a recruiter, I’ve earned more than this number consistently and this year will make almost $300K which is more than many CIOs. 

      ’nuff said.

      1. Anonymous says:

        You misread my statement or, probably, I wasn’t clear.   My point was that on an hourly rate basis, recruiters do not make, from a commission perspective, twice what the resource is being paid.   Bill rates are rarely that high and I have my burden of 16%-21% which needs to be accounted for.  In short, if I’m making 30% gross margin on a contract placement I’m doing very well indeed.  However, GM% is more along the lines of 20-25% on average which is hardly extortion. 
        As for my own earnings, I make no apologies.  I work hard and this is reflected in my paycheck.  Unlike when I was in IT, where no matter how many hours, evenings and weekends I worked, the compensation remained the same but with 10 times the headaches.   

        I still don’t get why some claim the recruiting industry is antiquated.  Companies need people and lack the time or expertise to find them.  Technology hasn’t solved the problem and companies internal HR departments are, for the most part, unable to replicate what I do every hour of every day.   Thus there is a need which I fill.  And what’s wrong with that?

  4. gutmach says:

    Definitely feel the strength of opinions on both sides here!  I’m on the corporate recruiting side, which is not J.D.’s target, but I’d like to weigh in on a few points:1) When J.D. says “All that’s missing is a good aggregator of all these that can send me positions that would actually be interesting to me,” I’d argue they exist (e.g., Indeed.com or SimplyHired.com aggregates postings from most job boards so create some free job alerts there).  The problem is that many people apply for jobs whether they’re qualified or not, and that takes up a lot of time among corporate recruiters having to review those submissions when they often get better matches doing their own searching (thus a key reason why recruiters exist both in-house and third party).  Of course, some candidates in the mix are jewels, so we’d never ignore those applicants, but that’s what’s led to the increase in the amount and sophistication of online testing to help save time in the initial filtering part of the process (admittedly imperfect at this point).2) Sometimes those multi-niche skillset people needs are *really* hard to find (talent that recruiters call “purple squirrels” or “black swans”) and it’s not cost-effective to have in-house people working it when the same amount of effort might fill 2+ other job openings.  That’s when companies call in the subject of your article to help.3) If the system seems broken, that may be partly because 
    (as the old saying goes)
    it’s the only industry where the product can say “no”.  The human factor makes hiring complicated:  besides skills, industry vertical knowledge, location, compensation, etc., it’s a question of fit on both sides.  Technology will keep evolving to try to help with the matching process, but as others commented said, it’s easy to manipulate a resume, spin your answers to questions favorably, etc., so it takes a human process to determine what is really a fit – for the employer and candidate.So I agree with the others that good recruiters – like good IT professionals – will always be valuable.