Recruitment Agencies Are Not Dead! Why professionals seeking management jobs need headhunters

A lot of our candidates for senior management positions have held their current jobs for a few years and sometimes they are no longer in the know or aware of the current job market and recruitment best practices. Especially in the last few years, for senior positions, with the infusion of always-on social and online career networks, the traditional recruitment scenario has changed considerably.

Recruitment agencies are not dead. Seeking management jobs needs headhunters

Earlier, we talked about the various definitions of headhunters, recruitment coaches and shared details on other industry terminology.

Today, Tony Restell, CEO Social-Hire, shares with us details on recruitment agencies. Even in the hyper-connected social age, working with them can prove beneficial from a candidate perspective. While seeking management jobs, you may need to establish connections with recruitment agencies. It is critical for you to understand how these agencies and headhunters work, to be sure that you attract the right ones for your next career move. Read further to get the key insights.

Motivations of Recruiting Agencies: What You Need to Know

You’ve no doubt read a lot in the press about the impact that LinkedIn has had on the recruitment market. Heard how companies are now trying to attract talent to their businesses directly, without the need for external recruiting businesses. Whilst this is true, it is also the case that in many countries the size of the recruitment agency industry has hit a new high, surpassing the pre-recession peak.

With so many roles still being filled via recruitment agencies, it is therefore key that you understand the role they play and how they are compensated by clients. For many reading this article, they will still play an important role in your next career move and so understanding how to influence them in your favor is a key consideration.

So let’s use the rest of this article to get a better understanding of the recruiting industry. Most recruiting agencies will fall into one of two categories: retained or contingent businesses. Let’s take a look at how each is compensated and how this financial structure impacts the way they work with candidates.

Contingent Recruitment

The vast majority of all recruitment agencies are contingent recruitment agencies. In such businesses, getting paid by a client is contingent on the client hiring a candidate that the recruitment agency has put forward to them.

Sometimes called staffing agencies, it is common for multiple agencies to be working on an assignment for an employer – so there is no certainty that time invested in the assignment will ever actually translate into income for the business.

Employers make extensive use of contingent agencies for a number of key reasons. Primary amongst these are i) that they provide employers with instant access to additional recruiting resource on a no-hire-no-fee basis; and ii) that they offer employers an insurance policy in case they aren’t able to make hires directly themselves. Any role where a company falls short in finding the right hire from its own internal recruiting efforts, the business knows it’ll have a range of suitable candidates in the pipeline from its recruiting agency partners.

Contingent recruitment is usually based on selection (rather than search). The recruitment agency will undertake lots of activities to stimulate interest amongst appropriate candidates, from job board advertising, to email-shots to their candidate database, to social media campaigns. These activities will generate lots of applicants – and from these the recruitment agency will select the most appropriate candidates to put forward to the employer.

Employers benefit from the agency’s vast talent pool of pre-qualified active job seekers, relationships with – and access to – CV databases and job boards, and their manpower for screening these individuals. Contingent recruitment agencies typically charge 15-25% of the candidate’s starting salary and are only paid when the new hire actually commences employment. This fee is paid by the employer, not the candidate, so their fee doesn’t impact you directly.

Now due to the fast-paced and overlapping nature of these assignments, contingent agencies often do not get in-depth feedback about all the candidates submitted and so are not always able to update you with feedback in the detail you might hope for.

Keep in mind that this lack of feedback doesn’t necessarily mean the recruiter is a poor recruiter to work with. Also note that because such recruiters are only paid when a candidate is hired, they invariably have to channel their efforts towards helping those candidates they feel best able to assist into employment – rather than every candidate who approaches them looking for help.

This is often a complaint levied at recruitment agencies, but in practice it’s simply a function of the commercial arrangements within the recruitment industry. Most of these recruiters would love to help everyone they come into contact with, but they have bills to pay just like everybody else and so have to ration their time accordingly.

Retained Recruitment

Retained recruiting businesses typically work on search assignments rather than selection assignments. Instead of screening applicants to select the best candidates, a search assignment will involve researching the best possible candidates for a role – irrespective of whether those people are actually looking to make a career move – and then approaching that target list of candidates directly to discuss the opportunity. The relationship between these recruitment businesses and their clients is more akin to that of a consultant rather than a vendor, meaning recruiters have a deeper understanding of the client’s business and the importance of this particular role to the employer.

Retained assignments are usually exclusively worked on by one recruitment business – and that business is paid a monthly “retainer” to work on the assignment. This monthly fee is paid irrespective of whether a hire is ultimately made and rewards the recruitment business for the time they are investing in researching the market and approaching potential hires from cold.

In addition to the monthly retainer, the recruitment business will also be paid a success fee upon successful hiring of one of the candidates presented. A fee of 30%+ of the position’s salary would not be uncommon – and this is calculated on a much higher salary than would be the case with contingency recruitment, as such retained work is usually undertaken for C-Suite roles. Again this is paid by the employer rather than the candidate, so doesn’t affect you directly.

Common Considerations

We noted above that recruiters working in recruitment businesses are likely to focus their efforts on helping those candidates they feel best able to help in gaining employment. A natural conclusion of this is that you should always go the extra mile to present your skills and fit for an opening as clearly as possible.

Your recruiter may be able to read between the lines and understand the value you could bring to the position they have available, but they must also consider how your resume and responses to their pre-screening questions will come across when presented to their client. This is why it is important to tailor your resume to each position, rather than relying on the recruiter or employer to interpret your experience and skills.

Before being interviewed by the employer, agency recruiters can help you prepare. Doing so is in their best interest as well as yours, so always ask for their guidance. When a recruiter confirms they will pass your information along to their client, take a few moments to ask:

  • “Based on our conversation, is there anything you would suggest I change or add to my resume to better reflect my qualifications for this position?”
  • “Can you provide me with insight regarding what the hiring manager looks for that would help me prepare for the interview?”

Asking these questions will strengthen your candidacy for the job by leveraging insight from the recruiter’s relationship with the client and subsequent knowledge of their hiring history, including patterns they have noticed in the hiring manager’s decision making.

One advantage of working with an agency recruiter is that they can become your advocate for the position – particularly at the stage where you are trying to secure that first interview. So do spend the time with them necessary for them to understand your unique skills and background, so that they are best able to represent you to their client.

Recruiters will also provide guarantees to their clients that the candidate they find for the position will be successful and remain in the post for a period of time after being hired. So recruitment agencies will be far more likely to fight the corner of a candidate whose aspirations and motivations they fully understand. It’s therefore always better to engage fully with a recruiter, to be open with them and to reassure them that the time they are investing with you is going to be time well spent.

Concluding Remarks

LinkedIn’s annual survey of 3,000 talent acquisition professionals highlights that in many of the most important markets around the world, recruitment agencies continue to be amongst employers’ most important sources of quality candidate hires.

Understanding their commercial motivations means you can focus on contacting recruiters when you have the best possible chance of appealing to them. As the last article in this series stressed, you can also take steps to ensure you remain on their radar and a front-runner to be contacted for future openings. Keep this in mind next time you read a post screaming the headline that LinkedIn is killing the recruiting industry. It’s simply not true and could undermine your job search if you take it at face value.

Thank you Tony for sharing your insights on this topic. We specifically like the concluding remarks where several posts spread over the Internet talk about the imminent death of the recruitment models often hardly understanding the true merit of these agencies and headhunters. We hope our readers take this as an opportunity to understand the industry better as well as use this information to prepare themselves mentally when trying to build long lasting relationships with headhunters and recruiters.

About Tony Restell and Social-Hire:

Tony Restell headhunter tipsTony Restell is the Founder of and helps candidates and recruiters leverage social media. Having spent the last 15 years serving the recruitment industry, Tony is a frequent guest speaker on the ever-changing jobs market and how both candidates and recruiters must adapt in order to thrive. A published author and Cambridge graduate, you’re welcome to reach out to Tony on @tonyrestell.

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