What Do I Need to Know About Using Recruiters?

Every hiring process is different, and sometimes you may wonder if a professional recruiter or agency could be a more efficient or effective way to recruit the talent you want.

In this section, we’ll take a look at when it makes sense to hire a recruiter, how to do it effectively, and what strategies you can employ to make sure the experience is positive for you and for the candidates you bring in. Recruiters are a major part of the hiring space so it’s crucial to know when and how to use their services effectively (and when to steer clear).

When might it make sense to hire a recruiter?

Often, businesses will turn to recruiters when they have a lot of high-level hiring to do on a short deadline. This is one of the things recruiters (good ones, at least) do best – they draw on large networks of potential candidates, match them with your company’s needs and culture, and present you with a short list for you to interview.

If you need to be aggressive in your search, you can harness the power of multiple recruiters and their contacts by going to an agency (or multiple agencies) and hiring a team to fill the role. You get access to resources you otherwise wouldn’t have access to, and the recruiters can take pre-screening out of the equation for you. You meet only with candidates who have been vetted and are considered most likely to be to get a good fit.

Of course, this is how using recruiters should work in theory. The process of finding a recruiter that will work well for you is often a bit more complex.

What makes a good recruiter?

A good recruiter can be hard to find. There are lots of recruiters out there, yet plenty of people have found themselves struggling to find talent or scratching their heads at unprofessional behavior when working with recruiters who are not up to par.

Remember: just like job candidates, all recruiters are not created equal. Finding the best one takes a combination of research, recommendations, and instinct.

So what attributes should you look for in a recruiter before you take them on?

1. Experience.

An experienced recruiter will have a history of successes or failures behind them that you can ask around about. Get references from the recruiter themselves and also check on their past clients using resources like LinkedIn. Look for recruiters who have successfully placed not just many candidates, but also the kind of candidates you’re interested in (i.e. someone who has placed a lot of software engineers is not necessarily helpful if you’re looking to fill a VP role).

You need someone who understands your industry specifically and has a background of success within it. Oftentimes these recruiters can suggest interview questions, improvements to your process, and even negotiating tips. The good ones will do a lot more than just make introductions and fill your pipeline.

2. Network.

A strong network is essential for a recruiter to be worth hiring. The most successful recruiters have existing relationships with people in your industry, so that many candidates already have a rapport with your recruiter when they reach out. A strong network is about more than just 500+ LinkedIn connections; good recruiters have contacts and relationships that they maintain constantly to be able to leverage them on your behalf.

Successful recruiters can share a strategy on recruiting passive candidates, and can even make introductions for you with other strong hiring managers or senior people for mentoring and guidance. They see your relationship as long term and more than just a commission check.

3. Personal.

A good recruiter will take the time to consult with you about what you’re looking for in a candidate. There are lots of qualified candidates out there, but you want the one that’s going to work well with your team and take your product in the direction you want. Seek out someone who is reliable and makes it clear you are a priority by staying in regular contact and providing you with thorough briefings on candidates.

Finding the right recruiter for your company often comes down to one thing in the end:

4. Trust.

You’ll have the best experience possible with a recruiter you trust. This means finding a recruiter who wants to talk to you at length about who the right candidate for the position is. They want to know about your business, your culture, and what non-negotiables you’re looking for in this role. They’ll also do follow-up with you after you’ve interviewed a candidate to see what worked and what didn’t, so they can continue to refine their search on your behalf.

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A good recruiter will also represent your company and the position honestly to establish good rapport between you and their candidates. Remember, hiring is like marketing, so your recruiter is a brand ambassador. You want the candidates to feel they had a good experience with your company, which includes being treated with respect and honesty by recruiters acting on your behalf.

A recruiter’s job is to make the search for high-level talent easier for you, so don’t settle for ones that are ineffective, unreliable, or disinterested in your company.[/gn_note]

 

[gn_pullquote align=”left”]TIP: Before hiring a recruiter, ask them to walk you through their process for finding candidates.

You’ll get insight into what channels they use to find talent (are they just posting on one job board or do they draw on a personal database, a strong LinkedIn network, and local connections?) and also get a sense of how they work.[/gn_pullquote]

Once you find a recruiter (or two or three) who you have established a track record of success with, maintain that relationship. The more a good recruiter gets to know your business and your hiring bar for candidates, the better they’ll do bringing in top talent for you in the future.

I have worked with the same three recruiters at my last four companies. Each time I have to hire a lot of people I will enlist their help, since getting the ball rolling is as simple as a phone call. They already know my general process for hiring and the type of talent I like to have on my team. I also know that they know to never recruit or poach from the teams and places where I work. We have trust and relationships that are focused on the future, which makes me far more likely to give them referrals and use them again.

How can I effectively interview a recruiter I want to hire?

If you haven’t already worked with a particular recruiter before, doing an interview with them before hiring them for an assignment is essential. Below is a guide to the right questions to ask a recruiter to make sure they’ll work in the best interest of your team:

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Recruiter interview questions

What are your favorite recruiting tools? Why?
Describe your process for finding candidates. Where do your best candidates usually come from?
Describe your network of potential candidates and how you engage with them.
How do you win over candidates?
Tell me about your recruiting process, from beginning to successful placement.
What is your typical strategy for understanding client needs and matching appropriate candidates to the positions?
Where have you had the most success recruiting?
Describe the industry (tech, marketing, etc) and company size (startups vs. big corporations).
How do you screen candidates?
What is your preferred mode of communication?
How do you handle it when a client rejects a candidate? What actions do you take?
Tell me about a particularly tough assignment. How did you fill the position given constraints?
How would you compare your success as a recruiter to others in the industry?
What metrics do you use to judge success?
What motivates you professionally?

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What can I expect to pay for a good recruiter?

That depends.

You can expect any recruiter’s fee to be in the ballpark of 10-25% of the new hire’s first year salary. If they’re experienced and very successful, it can be as high as 30%, especially if they’re placing senior management or VP level positions. On average, though, a strong recruiter will take between 15-20% for most positions.

Some recruiters may be willing to negotiate a flat-rate fee for some placements, but on the whole, you will mostly encounter commission-based fees.There are also some firms that will allow you to pay hourly for recruiters to help source and vet candidates. However, the effectiveness of those recruiters can really determine which fee structure makes more sense for your company and roles.

Since recruiter fees can vary so widely, you have to be savvy when negotiating with your recruiter to ensure you don’t wind up with a bill for more than you expected. With bonuses and equity and all the other financial factors in making a high-level hire, there are plenty of loopholes and other opportunities for recruiters to increase their fee.

How can I avoid overpaying for a recruiter?

Setting a fair price for a recruiter to place a candidate for you comes down to effective negotiation. Recruiters are paid a commission for every successful placement they make, so it is in their best interest to place a candidate for you and also to make sure their percentage includes as much money as possible.

When negotiating a recruiter’s contract, it’s important to make strategic decisions about how much they will be paid and when. Be practical about keeping costs down for your organization and make sure you’re paying a fair price for your recruiter’s services.

Here are some basic recruiter contract negotiation concepts to consider and tips for locking in a better price:

Understand what their commission structure entails.

AKA: read the fine print. Is it just a percentage of salary, or does it include bonuses and stock?One trick you can use to reduce fees is to put a target bonus for the candidate at the end of a year (and you can do a second one at the end of 2 years) instead of using a traditional signing bonus. The recruiter won’t likely get a percent of the target bonus and you entice the candidate to stay longer at the same time – way better than a signing bonus!

Do not pay the recruiter’s fee for 90 (or worse case 60) days.

Negotiate this period up front. Some recruiters expect to begin being paid on Day 0 of the search, with their full payment to come once they’ve brought in candidates or placed someone in the position. Others won’t collect until the employee’s first day. Take the time to understand the payment terms and what their concessions will be in the event the candidate doesn’t work out.

Some recruiters will offer to replace the candidate if they leave in the first month, or sometimes the first 3-6 months. Others will not offer any sort of guarantee at all. The guarantee can come in several forms such as a refund of the commission, a prorated refund of the commission (minus the time the employee worked), or replacing the candidate for free or at a discount. By negotiating a no-pay period for the first 90 days after placement, you basically ensure a 90-day trial period for you to make sure the candidate is a good fit.

Some recruiters won’t go for this, but it never hurts to ask. I like to start with 90 days, and negotiate down to 60 days. Most invoices are paid Net 30 (which means the payment is due within 30 days) so in the worst case, you can usually drag your feet for a month.

Ask for a longer guarantee on candidates.

Most recruiters will “replace” a candidate who didn’t work out in the position for free, but I think this is generally worthless.

When it comes to guaranteed placement, I have never had a recruiter actually fulfill that commitment. Just think about it from their perspective: you can place a great candidate at one of your companies where you get a sizable commission, or you can place them somewhere where you get no commission but fulfill the guarantee. In this case, it seems recruiters only send you their second-tier candidates or ones that haven’t been successfully placed with their other clients.

Instead, try to negotiate a refund or partial refund of the original fee/payment if the candidate is let go within a shortened timeframe, and a longer guarantee for replacement services.

Other tips for successfully negotiating with a recruiter:

.. Require them to share all job postings made on behalf of your company for your approval before posting. I have heard horror stories of recruiters misrepresenting brands on public job boards – including posting incorrect job details or have a description filled with grammar and spelling mistakes.

.. Make sure the position is represented accurately (you don’t want candidates feeling they’ve been duped by your company) and that your brand isn’t called into question.

.. Focus their search on passive candidates. You can post on job boards fairly easily to attract active candidates; what a recruiter has that you don’t have is the time and access to reach out to passive candidates.

.. Use a candidate tracking system since you shouldn’t ever pay a recruiter a commission on a candidate that also sent you a resume during this search, or even older searches. Maintaining a long-term database of candidates helps with this since each person and the original source can be tracked easily.

.. Don’t share your candidate database. Shady recruiters have been known to find active candidates in your pipeline and conveniently add them to their own (to be shared with other clients now or in the future). Keep your pipeline your own unless you really trust the recruiter with whom you are working.

.. Add a no-solicit clause. Any recruiter you even talk to should be required to sign an agreement that they will not recruit any employees from your company for an extended period of time. I tend to ask for 2 years. Relationships should be long term, which means recruiters shouldn’t be poaching or soliciting team members who are actively employed at the company. This also prevents recruiters for re-soliciting candidates they placed for you with whom they may have a prior relationship. Most good recruiters won’t object to this type of clause.

.. Understand their other clients. Make sure they aren’t working for any competitors. You can also add this to the contract too if it is something you are concerned about in the future.

.. If you are hiring in a hurry, consider offering the recruiter a bonus for roles filled quickly. It never hurts to entice a recruiter to work overtime for you. You can also do this for multiple roles. The more they higher for you, the bigger their commission will get. It keeps them motivated and incentives stay aligned.

A final note on recruiters:

A good recruiter can be an invaluable partner in the hiring process if you find one that makes you a priority and produces reliable results for your company. The best way to find one that works is to consult with people in your own network to learn who they’ve had success with in the past. You’ll get an unbiased look at their methods, their metrics, and their ability to produce results.

Be wary of any recruiter unwilling to disclose how they source their candidates or who is hard to get in touch with regularly. You want a recruiter who treats your position as their number one priority and who focuses on your needs and your brand over just closing a deal.

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