How To Disrupt Technical Recruiting - Hire an Agent

http://www.javacodegeeks.com/2012/09/how-to-disrupt-technical-recruiting.html

by nikosmar • 14 years ago

59 63 14 years ago

ig1• 14 years ago

FYI. In most European countries (and presumably elsewhere) the agency model is tightly regulated because the employee pays model (i.e retainer fees) is ripe for exploitation of people desperate for jobs.

mtrimpe• 14 years ago

Having lived with someone who worked in fashion for a long time, I can't agree more that the agency models work extremely well.

The agent would make sure finances are handled well, PR is constant and appropriate, negotiations are taken care of and much more.

In general when I deal with recruiters I even tend to treat them as an agent: I flat-out refuse to accept anything over 10% on top of my rate.

For a consultancy company my logic is the same: I find out what is being charged for me, deduct my salary + costs from it and evaluate whether the services that my company is providing me are worth the amount of money they are earning on me.

At some stages in your career they are but often times they aren't. At those times I would love to just get an agent I can trust, that I can work well with and that will get me the jobs I want.

fecak28• 14 years ago

Author here. There are quite a few services an agent could provide, and you mention a few. Handling incoming inquiries (forward LinkedIn requests from recruiters to your agent), help maintain and build your brand (speaking engagements, set up or recommend networking opportunities), negotiate raises when you are working and salaries for new jobs, etc.

ChuckMcM• 14 years ago

Its an interesting concept. But to be viable you really need a 'job lifetime' that is measured in months rather than years. If you work somewhere for 5 years what is the value add? And given that the typical ISO vesting period is 4 years ...

The stock model might be an interesting compromise. So represent me and I grant you x% of my ISO on a per-annum basis. So lets say you agree to a 10% take, and I go to startup X and get 100,000 share option. (vesting at 25,000 shares a year) so on my anniversary date I exercise and transfer to you 2,500 shares in the startup I'm working at. Could be hugely profitable, and a waste of time, but the risk is shared. Can't eat shares though, so there has to be a model for some cash.

What I like here though is exploring other models.

fecak28• 14 years ago

Author here - never even thought about the stock possibilities. Was thinking more about annual fee for access (career advice, inside info, moving within companies, negotiating raises or promotions, etc.) and perhaps some search fee. As I've written in other comments here, the difference is that the agent represents you and not the company (since you pay the bill) - it's a big difference and the agent will give you more honest opinions that are not at all clouded by fees. I was hoping some dialogue would come out of this.

r00fus• 14 years ago

Ok, but don't pre-IPO stock contracts usually prevent sales of stocks outside the company?

fecak28• 14 years ago

True. Could be negotiated with company during the process perhaps. I know recruiters who have been given stock in lieu of fee by firms.

tjtrapp• 14 years ago

One of the biggest issues I see from the developers side is that "tech recruiters" normally do not know much about technology.

The second issue is that most of the time I'm approached it feels like a template where my name was has replaced {{name}}. For instance, take DHH for example: https://gist.github.com/1285068

Now on to your question, would I pay for an agent. Sure, but they'd have to be like Ari from Entourage. If I suck, tell me. If I don't, pay me.

Anyways, my $0.02.

fecak28• 14 years ago

Author here, I appreciate your $0.02. It's more important for tech recruiters to know about what candidates are and are not qualified for than to know actual code and such, but we've all heard stories about back-end and server side folks getting submitted for UI design jobs. I think an agent would want to be sure to know enough not to represent his clients to jobs that aren't a fit, but also needs to know about trends and such that could be valuable career advice going forward.

bartonfink2• 14 years ago

I would absolutely hire an agent. I have a day job, but freelance on the side. I'd estimate I have about 20 hours a week of available time that I can use for freelance coding.

I would LOVE to hire someone to help me keep those hours full. I have a day job that pays me well, so I can afford to be generous if it means I never have to wonder "Barton, are you just being strung along by this lead?"

fecak28• 14 years ago

Author here. If you want to discuss, I'm easy to find.

majormajor• 14 years ago

The idea of an agent sounds fantastically attractive to me for the next time I'm job hunting and looking to break in to a new area/field/whatever. It's work, and it's not the sort I enjoy, so yeah, I'd be willing to pay for it.

Also, the idea of having an agent to negotiate salary, at least initially, sounds great since the agent will presumably have a lot more knowledge of other salaries in the area or even at that company and the information situation would be more balanced.

fecak28• 14 years ago

I'm the author, look me up when you're ready to talk.

bartonfink2• 14 years ago

You should put your e-mail address in your profile on HN. The e-mail field isn't publicly visible.

xoail2• 14 years ago

How about we put a 1-900 number on the resumes? That way if a recruiter wants to get in touch, he/she has to pay a premium.

fecak28• 14 years ago

Author here. You think paying a buck or two will stop a recruiter that could make 20K? Small investment if the resume looks strong!

xoail2• 14 years ago

I dont mind talking to a recruiter if he/she is paying me $10/min to talk to me. In fact I can talk all day :)

electic• 14 years ago

I hate to say it but the guy who wrote this article is nothing more than an opportunist himself.

If someone ever came to me looking for a job who had an agent, I wouldn't even bother. Just like I don't bother with 3rd party recruiters.

tankenmate• 14 years ago

The feeling is mutual, he stated in the post that he wouldn't bother with you either.

fecak28• 14 years ago

I did? Nevermind, just saw where I did!

fecak28• 14 years ago

I understand your skepticism, but look at the current model. You have recruiters representing candidates and companies, yet they are only financially motivated by whether a transaction happens (whether or not that is in the best interest of the job seeker). If you don't bother with recruiters, you certainly wouldn't bother with an agent. But I'm surprised you quickly dismiss a concept where you would have true representation. If you feel you can go it alone and don't need the help, more power to you. Some people change their own oil and mow their own lawns too, and some don't. Personal preference.

You could argue all recruiters are opportunists to some degree. But if I do my job and do it well, someone gets a job they want and a company grows. It's a win win (except for the company that loses the employee).

tatsuke952• 14 years ago

I read this with the same mentality. What kind of bubble are we in where programmers require agents along the lines of professional athletes and Hollywood stars?

It makes a bit of sense in the context of the latter two; the contracts are worth so much money that an agent can make a living off of a small percentage of the take. But if you're a programmer who can't handle your own finances, PR or salary negotiation, how well-rounded are you?

fecak28• 14 years ago

"what kind of bubble are we in" - good question, and that was the key point. Tech recruiting is a big business, but recruiting in lots of other industries is not nearly as big. Why is that?

There are more programmers than athletes and Hollywood stars, but there are many more people in industries where using a recruiter/agent is not the norm. If you think that programmers are good at or enjoy handling their own finances, doing PR, or salary negotiation, I'd encourage you to talk to thousands of programmers and ask them how they feel about that. I have programmers come to me for advice on negotiation and what career moves to take that aren't even active candidates (jobs they found on their own, yet still seeking representation). Programmers that I have met hate that part of the business, hate negotiation and building their brand. Of course there are some that are willing to do it and are good at it, but the majority seem to be completely fine passing that off on to somebody else if they can.

krickle2• 14 years ago

I don't love negotiating, I don't do it as a job so I'm not as good at it as I am at developing. If this guy can get me an extra $X per year doing a job I'd like anyway it's only sensible that paying up to $(X - 1) is a win, and that's disregarding time saved.

thedufer• 14 years ago

I like the idea of an agent, mostly because I recently went through the finding jobs thing and its not fun. Its worth pointing out that you could probably convince a new employer to tack on to your signing bonus a significant percentage of what a recruiter would have cost to them. That would keep the cost of an agent fairly negligible.

On the other hand, what's an employer to think when they see that you have an agent? I would see it as a sign of flakiness. If you need an agent, you must be jumping around jobs a lot. That is not a good impression to make.

fecak28• 14 years ago

Author here. Good points you made here. As I mentioned before, I can't see there being any reason why the agent couldn't charge at least some fee to the company as well (which would be greatly reduced from what recruiters are charging now, so their cost to hire would be lower).

I'm not sure what a company would think. If it were to become more common, it would just be a way of doing business. I negotiate most of my candidates' salaries and packages now anyway, so having an intermediary would not be a huge leap for most companies that already use recruiters. The leap would be the term 'agent', but I think companies would respect the fact that someone takes their career seriously to have an advisor. We'll see.

zacharycohn3• 14 years ago

We had this discussion in the IRC channel a few weeks ago. It's largely unsustainable for the agents.

Agents work in Hollywood because if you're doing smaller work (commercials, etc) you might get 3, 4, 5 jobs a month. If you're doing movies, you might still do 2 or 3 or even 4 movies a year.

The average developer is at 1 job a year (or longer), or maybe 2 over the course of a year.

Additionally, all the Possible Solutions to Problems identified in this post are already being solved by GOOD recruiters. And many of the solutions proposed that are "opt in" are what GOOD recruiters already do... the problem with the industry isn't recruiters. It's BAD recruiters.

brey2• 14 years ago

right, so an agent needs a lot more clients.

but they also have a lot less work to do per client, they're only needed for a few weeks' work every year each.

and that serves them well if they build a portfolio of clients with myriad technical skills between them - IMO engineers aren't anywhere near as fungible as actors.

zacharycohn3• 14 years ago

This is how recruiters work too, though. They have a bunch of people who need jobs, and a bunch of people who need people, and they mash 'em together.

fecak28• 14 years ago

Author of the article here, and I agree that the problem is the bad recruiters. My business is doing quite well, but I could see where job seekers question the motives of recruiters mainly because of the fact that recruiters get paid by companies, and only get paid (generally speaking) when they take the job. So recruiters have the short-term incentive of convincing candidates to take jobs, and not necessarily to do what is right for their career.

Long term requires recruiters to be fully ethical or lose credibility. If I send you for an interview and it isn't the best fit for you, I'm financially motivated to try and get you to take it anyway. As your agent, I would tell you not to since you are my client.

The agent model would be advantageous to the tech community, but obviously more costly to them. Whether or not it would be sustainable is something I would be curious to find out. I'm not sure if an agent would only get paid during a job search, as there could be advising going on during your entire career that has some value (how to negotiate a raise for yourself, what is hot/not, trends) - some of this engineers are good at, and some they are not.

zacharycohn3• 14 years ago

"Long term requires recruiters to be fully ethical or lose credibility. If I send you for an interview and it isn't the best fit for you, I'm financially motivated to try and get you to take it anyway. As your agent, I would tell you not to since you are my client."

That doesn't make any sense. My agent is still financially motivated to get me to take the job.

southphillyman• 14 years ago

FWIW, I found my first development job by attending one of this guy's JUG meetings in the suburbs of Philly, and speaking to a CIO who was attending. My understanding then was that Fecak was a recruiter and the JUG meetings were a way for him to get face time with developers and build credibility in the community. Can't really fault him for being opportunistic. At least he is TRYING to make the experience less painful for devs. The recruiter industry is in MAJOR need of a rehaul. I haven't posted a resume anywhere in over 3 years and I still get 5-10 daily junk calls. There have been times when I avoided departure from unfulfilling situations JUST because I dreaded the recruitment process. Fecak's idea is innovative but I think there are a lot of questions around how it would work. What's a reasonable fee? Will there be conflict of interest issues if he is submitting multiple candidates? etc?

fecak28• 14 years ago

I guess I know you? Glad to hear you found work through the JUG. I obviously am a recruiter and still lead that JUG, and it is a way to build credibility. You could call it opportunistic, or you could say it is a way of giving back to the community (if I were a true opportunist, I'd blast my open jobs to the group, talk about them at every meeting, etc - and I don't do that). But I could see how some might get that idea. It certainly hasn't hurt my business, but at this point I don't need the extra edge of credibility that JUG provides.

What is a reasonable fee? Good question! Perm placement fees range from 15-25% of base salary, but I wouldn't expect any engineer to pay that much. The key to think about is that even though an agent is getting some fee from the job seeker, there is nothing to prevent him/her from taking a few bucks from the hiring company as well - so in theory an agent could charge a low fee to the job seeker and a reduced fee to the hiring company, which would seem like a win?

Conflict of interest is something I also hadn't though about (glad a dialogue is starting and I don't pretend to have all the answers). I would think that in representing candidates (and not companies) there wouldn't be too many conflict situations.

dllthomas• 14 years ago

I would love to have an agent - I am not very good at selling myself, and it could free up time and attention for other things. If you can help me come out ahead financially (while giving me at least comparably interesting things to work on) I'd happily part with a good chunk of that monetary difference in outcomes. In principle. In practice, figuring out what that difference is seems nontrivial, but I'm listening.

fecak28• 14 years ago

Author here, happy to have direct dialogue with you as well as others that have contacted me. I'm easy to find if you'd like to talk.

altay• 14 years ago

We're doing this at 10x Management (http://10xmanagement.com).

Long story short, I was freelancing as a full-stack (Rails) dev, and also playing in a couple bands. Through the music scene, I met some music managers in NYC. They've been in the biz for 15-20 years (managed John Mayer, Martin Sexton, Bruce Springsteen's tours, etc.). In talking, we realized what they do for music clients would be really useful for me as a freelance programmer.

Basically, a manager's job is to take care of the business side, so the talent can focus on what they're good at. So, in a strange experiment, I hired them to act as my agent for programming gigs. They started taking care of all my negotiation, invoicing, collection, scheduling, etc.

It worked out really well for both of us, so we partnered up and started 10x Management, to do this for more people. Essentially, we're bringing the concept of a talent agency to the tech world.

Unlike the OP, we focus only on freelance work (not full-time placement), but so far the model is working very well for all parties. The talent is happy (we've been described as a "virtualization layer" for freelancers), the customers are happy (we represent the best), and we're happy (it's very gratifying to help people with their long-term career and lifestyle goals).

We're growing fast, so if you're interested in representation, or you need a badass freelancer (web/mobile dev, design, data science/viz, PM, etc.), or you just want to learn more, get in touch via our website or hit me up at altay@10xmanagement.com.

fecak28• 14 years ago

OP here, and that's great to hear. My idea would be to represent careers regardless of the contract or perm hire scenario. Recruiters tend to handle a lot of that stuff for independents anyway (depending on corporation status and such). In past jobs I've had consultants work for me for a few years and we managed them from gig to gig, similar to what you describe it seems. Good luck to you.

TamDenholm2• 14 years ago

I'm a contractor and have to deal with recruiters constantly, i've been saying for years it should be an agent style model and would even be willing to set this up myself for the UK contracting market as i know a LOT of contract developers and know how to find more.

The problem is, i've no idea how to go and find work for them, if i did, i wouldnt use recruiters myself. I'm not comfortable cold calling companies and i think thats a poor way to do things and most contract positions are only advertised online by other recruiters.

If i knew any UK companies that were looking for a contractor, i could absolutely place a highly qualified one in their company, but how do i find those companies?

fecak28• 14 years ago

Author here. In your case, probably through the network of your former clients and the networks of your candidate pool. It's tough to do without some cold calling, but when recruiters cold call companies they are saying 'I have a candidate, will you pay me to hire him/her?' whereas an agent would be saying 'I have a candidate that is interested in working for you, and it is free to hire him/her' (or close to free). It's a big difference - you are offering the same service as recruiters offered to companies, but you're giving it to them for free.

If you are making cold calls to tech companies starved for talent, telling them you can solve their problem for free (that they have been paying a LOT for historically), the cold calls will get pretty warm pretty quickly.

TamDenholm2• 14 years ago

Thats good advice, thank you.

blitzcraig2• 14 years ago

As a developer, I can't help but see 3rd party recruiters as parasites feeding off of my hard work and expertise. I see any money a hiring company pays to a recruiter as money that could have been in my pocket via a signing bonus or a higher starting salary if there was no recruiter involved.

I don't see anyone in this discussion questioning whether we, as job seekers, even need 3rd party recruiters. In my experience, we don't. Throughout my 16 year career as a developer, I've only been placed by a 3rd party recruiter once. That was way back when I only had a year of experience. I haven't needed 3rd party recruiters for the last 15 years.

If you want to disrupt technical recruiting, don't send recruiters your resume, and don't work with them when they contact you. Instead, do some leg work when you're looking for a new job.

Browse the job boards looking for positions posted directly by the company with the opening. Contact people in your network about open positions where they work. Find tech companies local to you, and look on their job boards. (This is how I found my current position, and it is the best job I've had yet.) If a recruiter contacts you about an interesting position and tells you the name of the company that's hiring, bypass them and submit your resume to the company directly.

Bottom line, they can't make money without us. We can make money without them.

fecak28• 14 years ago

That may be oversimplifying things just a bit, but if you are good at everything a recruiter does perhaps you don't need one. Some people do their own taxes, some don't.

What if I were to tell you that, in negotiating a job 15 years ago, you left say 10% of your salary on the table (you took 60 but were worth 66). And every raise you have received since was based on that number in some way, resulting in compounded earnings loss for your career in the tens of thousands? You don't have to believe this scenario is possible, but I talk to people every day who are substantially underpaid for what they do, sometimes for years. If they had an agent who knew their value, negotiating on their behalf, with inside information on what that company pays other people in the same job, they wouldn't have lost tens of thousands over the span of a career.

Your point about recruiters taking money out of your pocket is interesting. You would assume then, if this were true, that companies that use recruiters pay their engineers less? Or perhaps don't pay for hiring internal recruiters? I've never seen any evidence of companies that use recruiters paying less to engineers - have you?

I guess the alternate theory is that firms that use agency recruiters do so not at the expense of their own employees' salaries, but simply because they have the luxury (because they can afford both a recruiter fee AND to pay employees a fair market rate). If you believe this alternative to be true, is it a coincidence that firms using recruiters are in a better financial situation than those that can't afford it?

Just playing devil's advocate here. Recruiters often have access to jobs hat may not be in your network. Again, if you don't need them, don't talk to them and perhaps miss out on some jobs you didn't know about.

And I would warn you about bypassing the recruiter after he/she told you about a position. If a recruiter finds out about that (in small companies it is easy to find out), the recruiter could very easily call the company to claim they created your interest in the opportunity yet you applied directly, making you look a bit dishonest to a potential employer and possibly costing you the job. Recruiters have been paid by firms without sending resumes/referrals directly in situations just like the one you mention.

Firms that use agencies value the service and are willing to pay for it. I do list many of my client names on my jobs page, running the risk of people doing exactly what you describe. My model is different (primary services paid up front, usually exclusive searches), so I'm willing to take that risk to help publicize my clients.

My service is such that job seekers come to me, even when they already know who my clients are in advance in many cases, because they understand that I know how to prep them to be successful in interviews, which hiring manager will be good or bad cop, and how to negotiate at the end. I don't care how well networked most job seekers are, info on a wide range of companies only comes with experience with many.

Ever been turned down for a job you really wanted? A recruiter could have helped prep you with all that info you didn't have (you didn't know that white board exercise was coming, and you panicked). Even if you failed a first interview, a recruiter may have been able to revive your candidacy by advocating for you (references are good when that happens). I've done that as well for candidates, where companies get the wrong first impression, and I've had companies and candidates thank me years later.

Thanks for the comments and I'm glad to see dialogue with differing opinions.

blitzcraig2• 14 years ago

I would assume that a company that has the money to pay a fair market wage and hire an agency recruiter would be able to give me that money as a signing bonus if they hadn't already spend it on a recruiter.

Also, if I was an employer using your agency, I'd fire your firm if I found out you were telling candidates what was going to be asked in a technical interview. You're doing them a disservice by giving out this information. At one of my jobs where I was interviewing new candidates, we had to make several tests with different questions on each one because recruiters were telling candidates what questions we asked on the test. This became painfully obvious when candidates could answer test questions perfectly, but fell short on other very basic technical question we asked. The recruiter cost us money since we had to dedicate team member time to writing multiple tests instead of working on developing our product.

This brings up another problem with agency recruiting. You can't represent both parties without there being an inherent conflict of interest. At the end of the day, most agency recruiters will misrepresent one party or the other to make a deal and get paid. This of course leads into your article's suggestion that job seekers have an agent who only represents them, but that begs the question whether any sort of middleman is necessary in this sort of transaction. Other industries manage to hire people without using an agency, but recruiting is accepted as a necessity, almost without question, in the IT industry.

Perhaps I am an anomaly because I can, as you said, "do my own taxes." To be fair, I know there are agency recruiters out there who really do manage to add value to both side of the equation. However, in my experience, they are the exception rather than the rule.

p.s. Regarding bypassing a recruiter, I only do this when the company has directly posted the listing themselves in addition to using a recruiter. If I don't see the position posted elsewhere, I assume they are looking exclusively through the recruiter, and I don't bother pursuing the position unless it's exactly the position I've been dreaming about. At that point I'll grudgingly work with the recruiter.

fecak28• 14 years ago

A follow-up, let's keep the dialogue going http://news.ycombinator.com/item?id=4575909

How To Disrupt Technical Recruiting - Hire an Agent

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