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how did the job head hunter business model come about?

B

BlahBlahYouToo

Lifer
why do companies insist on wasting money on middle men when they could hire directly themselves?

with social networking, online application for submitting a resume, the whole process has never been easier and quicker.

sure, they'll need to hire competent HR personnel to filter out the undesirables, but a large company should have that in place already.
phone interviews make it easy to further reduce that list.


also, what's the typical cut that the recruiting co. gets?
say for instance they offer me $50/hr. how much is the employer paying them?
 
I saw the paper work for me that was meant for my manager and the recruiting company I was through and it was literally double per hour to them what I received.

This was over 10 years ago now and when I was lower in pay so not sure it scales like that as pay goes up. I don't see how it could.

That said, it's a trusted source that can provide (ideally) repeat results for finding the kind of talent a company is looking for.

Finding talent is a tough thing to get down right for most companies and it results in a higher churn rate than they'd like.

Company I'm at now has a dedicated recruiting department just for finding talent for us and it's how I came on board as well. Dealt with only a recruiter for the company for all initial conversations then once they deemed me worth spending the time of a manager and director of the company they handed me off but still managed most communications of when things would take place.
 
BlahBlahYouToo said:
why do companies insist on wasting money on middle men when they could hire directly themselves?

with social networking, online application for submitting a resume, the whole process has never been easier and quicker.

sure, they'll need to hire competent HR personnel to filter out the undesirables, but a large company should have that in place already.
phone interviews make it easy to further reduce that list.
Click to expand...

A couple of reasons, among others:

1. Lack of competent HR people to screen candidates.
2. You can often do contract-to-hire and make sure you like someone before committing to hiring him/her.

also, what's the typical cut that the recruiting co. gets?
say for instance they offer me $50/hr. how much is the employer paying them?
Click to expand...

They're probably being paid a minimum of $100/hr if you would be getting $50/hr.
 
Even a large company will only look locally for talent in most cases.

Most good head-hunter companies, particularly those that help place executives, have a much broader reach.
 
i bet a lot of it is legal

a recruiting firm can be hired to do all sorts of checks before sending the applicant to the company. there by shielding the company from all kinds of lawsuits based on racism, discrimination, etc
 
i've actually had better success with head hunters than the company directly hiring me themselves. i'm in the tech field if that matters.

what i hate about some of these companies "application" process though is when they REQUIRE me to enter a SHITLOAD of information on their web application. i actually get totally turned off when companies do that so I don't even bother applying for positions there. if they do stupid shit like that just to get you in the door, you know damn well they will be micromanaging.

as far as their cuts go, i know the last one I used, they get a % of your first year salary. so they have a lot of reason to get people jobs. and it's a decent % too, like over 10%.
 
Corporations suck total ass when it comes to networking.

You have a few key folks that are great at it and when they leave or aren't applied in a cross company effort - you need head hunters.

Also, just look at how companies communicate from group to group or department to department. Would you rely on that same quality of communication to locate an ideal candidate for an important job?
 
BlahBlahYouToo said:
also, what's the typical cut that the recruiting co. gets?
say for instance they offer me $50/hr. how much is the employer paying them?
Click to expand...

For my temp to hire position a few years back, they took about 10% (I made $18, company paid them $20/hr).

I know this because as soon as I was hired into the actual company my boss gave me a $2 raise and admitted it didn't cost them anything to do that since that's technically what they were already paying to have me on.
 
I own a small contracting and land development company. We don't have an HR department, and I have used head hunters a couple of times when I needed to find a new Estimator, a new Senior Project Manager, or a new VP Operations.

The head hunter spent a bunch of time interviewing me, and others in the company to make sure they understood the culture and actual job description. They then did a prolonged search and sifted through the candidates and came up with the best three of four candidates for us to interview.

It was a very useful exercise and in all cases it resulted in us finding good employees, which would have been very difficult for me to find the time to do as well.
 
Limits charges of nepotism or infighting/hard feelings with existing staff if you want an outside candidate. Broadens search giving it to several HH and let them do the advertising and very wide breath of it to candidates you may never reach especially on candidates you may want who never have intention to visit your web site. Anonymity in some cases where you want to keep that you are hiring private for security reasons, compitition, or you need someone before old soon to be terminated employee finds out and does a burn job.
 
Could it also have to do with expenses? I'd guess the head hunter's only get paid once they've found a candidate or once that candidate is hired. While they may get more per recruit it's only when the company needs to replace someone and not a constant salary that is being paid for intermittent services.
 
I suspect in the massive success of the 50's and 80's, a lot of companies realized they were killing themselves to acquire talented people. As with all things business, somebody saw an opportunity. They realized the value of people was a thing all by itself and could make money. Just filling spots was profitable, all you need are connections, and in good business those should be established anyway.

I'm grateful for them. My two civilian jobs after the Navy were filled by headhunters. In fact some companies only get their people through recruiters or contractors. They dont hire for themselves unless things are really good and they already know the person. How do they get to know them?
😉
 
Permanent employees cost a lost more than base salary. The cost of benefits and taxes can easily add 30-40% on top of salary. If there are benefits for the contractor, those are from the contracting firm so that comes out of their pocket, plus their overhead for headhunters, etc.

Outside of financial reasons, contractors are much easier to get rid of then full time employees. Contractors are perfect to bring in for projects, while an employee is better for operational reasons.
 
BlahBlahYouToo said:
sure, they'll need to hire competent HR personnel to filter out the undesirables, but a large company should have that in place already.
phone interviews make it easy to further reduce that list.
Click to expand...

When I got a job, I dealt directly with the engineers. Up until that point it was just a sea of stupid retard middle men with no engineering background who had no idea what the job description meant nor did they have any idea what my training was or how it related to this job. Having HR hire engineers --> bridges that collapse that and electrical shit that randomly starts on fire.
 
A few reasons:

-The flexibility of temporary staffing means a company doesn't have to deal with liability, benefits, etc. They pay a flat rate and can hire/fire whenever they want to get stuff done.

-Companies are generally very bad at hiring/retaining people, and dealing with personnel. HR is not a great solution because they have an internal perspective, whereas a recruiter sees the whole market. Example: I advised a client today to pay a contractor significantly more than he had been making as a contractor, when they converted him to a full time employee. The reason? I know the market, and I know he is going to be getting plenty of calls from other recruiters offering him more money. They need to lock him down.

-Recruiters, their job being recruiting, know the good/bad people in the industry. One example: they know which companies have a high bar, which don't, and can spot a good person by where a person has worked. Having an entire market perspective is a huge advantage in finding good people that you do not get if you're one company talking to whoever you can find to come in the door.

-Lastly, and most importantly, because recruiters do this all day long, they know everyone. Company XYZ can post a job, nobody is going to see it, and they can look on Monster, only a fraction of people have posted their resume there. I know hundreds of highly skilled software developers I can call and offer your opportunity to.

I work for a company that is generally considered more expensive, and with contractors being paid from $25-$75 per hour. Bill rates are marked up around 75%-100%, with nearly 20% of that being "burden," or the cost beyond your hourly rate that it takes to employ you (benefits, taxes, etc.) Some people look at this and think they are being ripped off--truth is the company is the one paying for the service, and we are paying market rate. You aren't going to be able to command our bill rate on the open market because you don't offer our service.
 
Last edited:
BlahBlahYouToo said:
why do companies insist on wasting money on middle men when they could hire directly themselves?

with social networking, online application for submitting a resume, the whole process has never been easier and quicker.

sure, they'll need to hire competent HR personnel to filter out the undesirables, but a large company should have that in place already.
phone interviews make it easy to further reduce that list.


also, what's the typical cut that the recruiting co. gets?
say for instance they offer me $50/hr. how much is the employer paying them?
Click to expand...

Having viewed over 200 resumes in the past two years I can say that I wish I had had a head hunter,.
 
I can't speak for other careers, but headhunters are useless in the software industry. Headhunters are concerned with closing deals, not with being picky about sending you qualified candidates... Nor are 99.9% of them qualified to screen candidates. A large part of my job these days is screening technical resumes and interviewing candidates. I'd rather save 25% of the position's salary and get resumes directly from monster/cb/se/etc. after all, that's really all the headhunter is doing.

Headhunters make their living on the backs of people with actual skills and training.
 
tm37 said:
Having viewed over 200 resumes in the past two years I can say that I wish I had had a head hunter,.
Click to expand...

That's really not a lot in two years...explains why you are so quick to kill your dog though and get a new model.

For the OP, in this world of litigation and lawsuits; the head hunters came into power. As someone that needs one on the team, but is also working; it becomes harder to deal with.

So you pick out a good agency and don't go past the contract before terminating or hire and don't go past 3 months.
 
alkemyst said:
That's really not a lot in two years...explains why you are so quick to kill your dog though and get a new model.
Click to expand...

WOW. In case no one has told you yet today (it's 12:15 eastern, so someone's probably beat me to the punch), you're a filthy steaming pile of shit.

Vacation accepted.
 
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