Recruitment agencies and headhunters: what they do and how they can help you

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If you haven’t already, sooner or later in your career, you will probably work with a third-party recruiter. Third-party recruiter (TPR) is an all-encompassing term, similar to the word “tree” – you can have palm trees, pine trees, oak trees and fruit-bearing trees, for example. So too can you have a wide variety of TPRs. My hope is that this article can help to demystify what they do, the pros and cons and how they can help you.

Here is a very brief summary how TPRs operate. They generate business by contacting a company and offer to present candidates for an available vacancy. After an initial discussion with the company about the position requirements and the feasibility of presenting qualified candidates, the company will sign a contract with the TPR and they will meet the candidates presented by the TPR. Assuming the company hires their candidate, the TPR is paid, the company’s vacancy is filled and the candidate has a new job. Everyone is happy.

This is where the similarities end.

For the purposes of this article, I will define four types of third-party recruiters commonly found in the marketplace. Unlike any other aspect of HR, recruiting has no regulations so there can be any number of agencies out there providing a host of different services and charge different fees. Nothing prevents you from looking at your friend, you guys nodding, getting a LinkedIn account and opening a recruitment firm. If this sounds scary to you, you aren’t alone. This is exactly why I am writing this article. My aim is to equip you to do your best and find a great job when working with a TPR.

1. Big box recruitment agencies

Big box recruitment agencies are the most recognizable. They are national or multinational companies that have strong, reputable brands. They tend to have many branches and have many areas of specialization. These companies invest heavily in strategic marketing to obtain an edge over their competitors, therefore you will often find them publishing salary guides or hosting employment-related seminars.

The benefit with working with firms such as these is that they have strong brand recognition and many companies will give them business because they are so present in the marketplace. They will also have wide areas of specialization, so if you work in administrative support, skilled trade, general accounting or bookkeeping, IT support, customer service and similar fields, you will most probably be able to be helped by this type of firm.

The downside of working with these agencies is the size. Because they are so big, their services tend to be somewhat commoditized both for candidates and for companies. In general, the agents are sales people, whose primary job is to retain and generate business. They have limited industry experience, if any, and this will be apparent to you as a candidate because they will not always understand what you do or propose positions suitable for your career path.

For the most part, big box recruitment agencies will work on a contingency basis, meaning that they only collect their fees once a candidate has been successfully hired. What this means for you is that there will be competition from other sources such as the company’s HR department or even possibly from another agency. So essentially, you are not only competing with candidates presented by the agency representing you, but also possibly with candidates from other agencies and applicants who have submitted their candidacy directly to the company.

With this said, all the big box recruitment agencies are growing and synergizing in new ways. Thousands of people are placed by them every day and companies trust and rely on their services.

2. Boutique recruitment firms

Boutique recruitment firms work in a similar way as the big box agencies, but will only have one or two branches and specialize in a particular area such as IT, Accounting or Finance, HR, Marketing or Sales and will place candidates at all levels, from entry-level all the way to Director and above. What gives them a competitive edge in the marketplace is that, generally speaking, the owner of the firm was once in the industry and made an entrepreneurial move, which means that they know they know their area very well and have strong relationships within their industry.

This is beneficial to you because working with these firms will mean that you have a more personalized service and they will generally understand where you are in your career and where you are going. They have access to the infamous “hidden job market” since they already have trusted ties within the industry.

The downside of working with these firms is because they are so small and specialized, they may work with only a few companies who know them well, and some companies may not even know that they exist.

Also, it is sometimes hard to gauge the reputation of these firms as many 0f them are the two friends who nodded to each other and opened a recruitment firm, saying the fateful words “how hard can it be?” This sometimes leads boutique firms into questionable practices. A common tactic to generate business is to advertise a job opening for a “client” and unsuspecting candidates apply. Once they have met one or two interesting candidates, they will then contact the company and say they have “the perfect candidate”. They will then send the unsolicited résumés to the client in the hopes of signing a contract with them. More often than not, this practice does not work because these firms have no idea what the company’s needs are and have wasted the candidates’ time. Recruiting is job that requires expertise and you have to build your name by generating business in a way that respects both companies and candidates. This is why there is high turnover in boutique firms, many of them closing within the first few years of operation.

On the flipside, reputable boutique firms are a goldmine for candidates and if you have one in your market that specializes in your profession, you should definitely seek them out.

3. Executive search firms and headhunters

I put these two types of firms in the same category principally because of the fee structure. Typically, executive search firms and headhunters will do what are called retained searches. What this means is that the firm mandated by a company and paid a portion of the fee up front to guarantee that a candidate will be hired. They will do a extensive market research and contact candidates in the market or in neighboring markets to propose the position to them.

The advantage for you as a candidate when there is a retained search is that there is no competition with candidates from outside sources. Because of the guarantee, this will be the only firm working on the position and the HR department will not advertise this position on their website.

Executive search firms hire for some Director-level positions, but mostly Vice-President- level and above. They are very well connected in the marketplace and will work on positions that HR may not even know about.

Headhunters work in a similar fashion but for Director-level positions and below, which includes highly specialized individual contributors and subject matter experts. Some boutique firms may also provide headhunting services.

The downside is that you don’t call them, they call you. Some firms will post a few positions that they are working on, but rest assured that many searches are confidential. While you can always send them your candidacy, there is no guarantee they will consider you as they are searching with specific criteria in mind. Because the company has already paid them a portion of their fee, they are bound by their agreement and can only present a small, select group of candidates matching exactly what the company has requested.

If you are contacted by an executive search firm or a headhunter, I would recommend listening to the opportunity. Even if this is not the right time for you, remaining professional and open to discussion will ensure that you will be contacted again. You never know when the timing will be perfect.

4. Community and non-profit organizations

Some community centres and non-profit organizations offer “job placement” services. Generally, this arises because there are small businesses associated with the community that are looking for people and do not have the resources to recruit and headhunt talent in the same way that a corporation can. In a similar vein, non-profit outreach programs will try to help people get back into the workforce, develop a bank of candidates and present these candidates to companies.

While this is a viable way to build your network, often times there is a disconnect between the candidates’ skills and what the companies are looking for. Because they are not segmented by industry and are largely run by volunteers or coordinators who have hybrid functions, it is difficult for these organizations to compete with the examples I have given thus far. Some organizations offer their services to companies without fees, but the issue for companies is the talent and not the fees.

With that said community centres and non-profit organizations offer good advice and opportunities to network, and some people do find jobs through them. If you do decide to work with a community group, be sure to manage your expectations and do your best to make a contribution and give back, no matter what the outcome of your job search is.

How to work with a third-party recruiter

When working with a third-party recruiter, keep in mind that they do not work for you. It is not their responsibility to find you a job nor counsel you in your career. TPRs collect their fees from companies, so you should never pay for their services.

I would recommend against getting overly comfortable with the people at the TPR or “saving” your professionalism for when you are in front of the hiring manager. Remember that the company has direct contact with them, and if you are not giving them much to work with, it may be difficult for them to convince a company to meet with you.

TPRs can be powerful allies. They will help you to tailor your résumé and to dial up certain parts of your experience or dial down others to increase your chances at getting a favorable response from the company. When the time comes to negotiate your salary, they will be in your corner and you will have a better chance of getting the higher end of your bracket. Those are some unquestionable advantages.

I would also recommend that you respond to requests of TPRs as quickly as possible. Because there is communication back and forth between the TPR, the company’s HR, the hiring manager and you, this inevitably complicates things. If you can be responsive and quick to deliver anything that is requested such as availabilities for interviews or providing work samples or references, this will only help to paint you in a favorable light both with the TPR, and in turn with the company. This is important because should you have to look for a job again one day, they will jump at the chance to help you.

Hopefully this article has shed some light on third-party recruiters and how to work with them. Having worked on both sides of the fence – working for an agency and with TPRs as my suppliers – I can say that they are absolutely a viable way to find a wonderful job.