Why Recruiters Exist (and what to do about it)

Almost every week, like clockwork, there’s a recruiter hating blog post that hits the HN front page. The reasons are all the same and well documented. Recruiters—the worst of them anyway—are clueless, they’re ruthless, and they’re among the worst spammers and scammers around.

We’ve heard some of the ridiculousness from both sides. We’ve heard from company owners, partners, and CEOs who fork over $20k or more for a recruiter, only to have that same recruiter poach away his placement mere months later. And we’ve heard from software developers whose resumes have been altered—without their knowledge—in an attempt to place them in a job for which they’re not qualified and not interested.

So they’re not the most effective tool for companies, they certainly haven’t earned the trust and respect of developers, and they’re inordinately expensive. It’s been this way for years. They shouldn’t exist anymore. Yet they do.

It’s high time we tried to understand why.

Employees aren’t loyal anymore, and (many) companies aren’t doing much to change that

The loyalty we once held for our employers doesn’t exist anymore. It disappeared around the same time the pensions disappeared (for readers under 30, a pension was a kind of retirement fund, the benefits of which were, for the most part, guaranteed if you put in your time and reached a certain age).

There are lots of reasons for this. These days we’re lucky if a company exists for more than five years—so oftentimes we’re switching jobs out of necessity. We’re no longer tied down or obligated to a company because of an unvested pension. We actually enjoy new challenges and changes of environment. And—I suspect this is the big one—many of us inherently realize that in this day and age the best way to move up is to move out.

My pre-startup days story is, I imagine, pretty common. Back in 2007 I started work with a well-respected Fortune 500 company for a decent salary, signing bonus, and benefits. They even threw in moving expenses. Six months later I had my first year-end evaluation, which wasn’t great due to the fact that I had only been in the job for six months (ironically—they cared deeply about on the job experience). Then in 2008 our salaries, benefits, and 401k match were cut significantly. In 2009 I earned my first promotion, which got me to a salary that was 2.5% higher than my original one. Including benefits and bonuses, it was more than 5% lower.

This company lost me and a lot of other promising, experienced, and ambitious employees for less than what it cost them to replace us. It happens all the time.

So the lack of loyalty and the lack of effort to change that results in more frequent turnover, which results in companies scrambling to replace increasing numbers of departing employees, which can (and so far does) result in more recruiters.

Recruiting and hiring isn’t considered a core activity

Good business practice these days tells us that if something isn’t at the very core of what you do as a company, you should be outsourcing it. This generally makes a lot of sense. No reason you should be running your own servers when the good folks at Rackspace, Heroku, Amazon, Gondor, etc. can take that little duty off your hands. No reason to mess with things like payroll, accounting, tax prep, etc. if they can be taken care of for a small(ish) fee.

The general equation is that if the cost of the service is less expensive than the price of the time you’re saving by outsourcing, and if the activity isn’t considered core to what you do, you should outsource. So, setting up, running, and maintaining your own servers is very time consuming. Rackspace, etc. is inexpensive. Servers aren’t core to what you do. Go with Rackspace.

With recruiting and hiring, though, things get a little tricky. In the information age—at a time when the quality of your product is directly related to the competence and ability of your team—it’s really hard to argue that “people” isn’t a core activity. The problem, though, is that people often confuse core activity with core competence.

The decisions that are made around things that are core activities but not core competencies have a tendency to really make or break companies. The original Digg was built with outsourced development help, but so were countless failed startups who were run by “idea men” with no technical skills. The same kind of thing happens with design, sales, and recruiting. It rarely works out. Putting a core piece of your company into someone else’s hands is a huge risk.

So with recruiting, we outsource either because we don’t consider “people” a core activity, or because we don’t think it’s worth hiring for or learning ourselves.

Recruiting is still seen as something that happens only when it’s needed

Okay, so let’s assume that we run a company that doesn’t suffer from either of the two issues above. We’ve somehow figured out how to make employees more loyal, and we consider “people” a core activity and know it well. Do recruiters still exist? Are they still a necessary evil?

Probably.

Why? Because recruiting is seen by most as an “as needed” activity.

Companies are like cars. There are some things that need to be constantly maintained to keep things running smoothly—we need to change the oil to prevent breakdown, we need to keep gas in the car to keep the engine running, etc. Then, there are things we don’t worry about until they break, like the headlamps.

A lot of companies look at hiring like we look at our headlamps. There’s no reason to think about them until there’s a need. During the industrial revolution this probably wasn’t a bad analogy. If one headlamp burnt out, it didn’t render the company inoperable and the whole thing could get by for a little while until a replacement was found.

These days, though, an employee is more like a tire. She is imperative to the operation of the entire company. Without her or a similar replacement, the company grinds to a halt or, at the very least, limps around at a much reduced speed.

So here we are, all driving our cars out in the middle of nowhere, with bumpy roads and who knows what in front of us, and we’re not even carrying spares. And the guy with all the tires charges a shitload for them, and we pay, even if they aren’t great, because we need the tires to get home.

People have been preaching the concept of “building a bench” of qualified, enthusiastic potential employees for a long time. It’s the single best way I can think of to eradicate outside recruiters and all their associated bad will and cost once and for all. But it’s hard. It’s hard enough to think of recruiting as something that requires effort even (especially) when you’re not hiring. It’s even harder to actually put that effort in.

How to help - for developers and other job seekers

1) Determine the value of your loyalty.

Here’s a little secret. I would have taken less money to stay at the job I left than I was offered at the job I left for. I partly blame myself. I wasn’t as straightforward about expectations as I could have been. In hindsight, I realized that things like challenge, continual growth, and excitement were much more important than money anyway.

Easier to do in hindsight than it is right now, but try this. Decide where you want to be five years from now, and decide if your current employer is capable of getting you there. If they are, then tell them about the plan and let them help you. If they are not, then leave. Now.

2) Plan ahead - job search is not an as needed activity.

So the only time we really try to align our competence with our job is the day we graduate college or grad school. At that point it’s “I have a CS degree, I want to do entry level Python at some place where I can wear flip-flops to work, so let’s go.” From that point forward, job search is often reactionary. “I don’t like my job, so it’s time to find a new one. What skills do I have?”

Wouldn’t it be better if the college method was applied to mid-career job search? Wouldn’t it be awesome if you always had a few great “spares” that could be pulled out in the event of a layoff or company decline? Average turnover for a tech job these days is something like two years. If, one year into a new gig, you started planning for the next one, that would be a great thing to do. Discover the dream job (maybe even in your existing company), train for it, get to know the folks who do the hiring for it, and then, when you’re ready to jump, you’ll really be ready.   

How to help - for companies

1) Be a great company.

My advice almost always starts with this. Being a great place to work—one that challenges and empowers employees, that pays them well, that helps them achieve their career goals, and that values them and their experience more than anything—is the best way to improve loyalty. The math works out too. The cost of replacing an employee—recruiting, interviews, relocation, training, etc.—can run upwards of $100k or more depending on the level of employee. The cost of retaining an employee is less than this. Always.

Remember that oftentimes by the time an employee comes to tell you he’s leaving it’s too late to retain him. The reasons are both practical and psychological. The solution is an honest and open workplace that encourages even tough dialogue. Make sure that’s the kind of place you run.

2) Be a great recruiter

Recruiting is hard, but it’s not impossible. It requires some deep thought about the environment you’ve built and the environment you want to build, and it requires some strategy, but that kind of stuff isn’t rocket science. I wrote a guest piece for The Next Web with some tips. Start there and you’ll be ahead of most.

3) Build a bench. Recruit when you don’t have to.

The very best way to avoid hiring recruiters is to never need them. The best way to do that is to build a bench of recruits on your own. When you think about it, that’s what you’re paying for when you hire a recruiter. For your $20k or more, you expect him to produce a list of competent potential employees from which to hire. Build a list on your own, and you avoid that cost altogether.

Best way to start is to build a process. Every contact from a meetup or conference should get a follow-up email with details about the company. Every twitter follower and facebook friend should be researched to determine if they’re worth following up with. Build an internal open source project or two, and stay in touch with watchers, forkers, and pull requesters. Write an engineering blog and have an email capture associated with it. Do all the things!™

Seriously, it’s hard work, but it’s worth it. It’ll pay dividends when you’re actually ready to hire. Just remember to make sure that in eliminating the enemy you don’t become the enemy yourself. Respect folks’ privacy. It’s completely okay—for most developers—to hear more about a company or topic that interests them. But the gap between that and spam can sometimes be narrow. Don’t cross it.

Okay, hope that helps. If you’re reading this from the states, have a wonderful Thanksgiving!



My company is Work for Pie. We help companies do recruiting better (without the recruiters). Reach out to cliff@workforpie.com or go to workforpie.com for more information.