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The Recruiting Industry is Broken (Part 4)

July 26, 2017 by Kurt Wilkin

Reason #3: One Out of Six is Considered Good!

Ever had the feeling that the recruiter you engaged wasn’t listening to you? Have you ever noticed a flurry of activity early in a search as you are bombarded with resumes, only to have it slow to a trickle after a week or two? Why is that?

In this installment of my series on why the recruiting industry is broken (see parts one, two, and three to find out more), you’ll learn how contingent recruiters play the odds and how those odds impact the quality of candidates you receive.

The short answer is because they’re hoping one of the handfuls of spaghetti they’re throwing at the wall will stick. They’re hoping you’ll be desperate enough that you will “settle” for one of their candidates and they’ll get their commission. But if you’re discerning, too deliberate, and/or you make them work too hard, they’re going to move on to easier positions to fill.

One Out of Six

The longer answer is because contingent recruiters only get paid for the roles they fill. Statistically, they will only fill one out of every eight roles they have (one out of six if they’re fortunate!), they just don’t know which one. This is why their work seems haphazard. They simply can’t afford to spend quality time on one role. As a result, you’re getting scattered work across at least a half dozen other searches.

Real World Company Example

Brian is a good friend of mine and CEO of a $25M technology company in Austin. He has always been intrigued by my vision for HireBetter because his team struggled with hiring for years. Revenue was growing but his team was overwhelmed – the wheels were falling off. He agreed that there had to be a better way.

He was starting to see a consistent pattern with his departments. His team would open a job requisition and send it to several recruiters in town. Then there would be a flurry of activity early on as his hiring managers were bombarded with candidates. More often than not, however, the quality of the candidates left a lot to be desired. And the various contingent recruiters were often submitting the same candidates!

It’s hard to blame the contingent recruiters. They were simply playing the odds – playing the game. They knew they needed to move fast to send candidates to their client before their competition did in order to get paid. And if recruiters only make money on one out of every eight opportunities, it’s obvious why clients tend to receive sloppy service.

The Candidate Experience

As a candidate, have you ever felt like royalty one day and then discarded to the trash pile the next?

Chances are you have also been on the candidate side of the equation, contacted by a contingent recruiter about a “great opportunity”. As long as the contingent recruiter is working a job for which you may be a candidate, you receive a fair amount of attention.

But as soon as you don’t get the job or it goes away, you are of no use to that recruiter. They don’t have time to spend with you because they have to focus on the jobs and the candidates for whom they may still get paid!

It’s All About the Commission

On one hand, I guess I can’t blame them. If my livelihood was based solely on commissions, I’m sure I would figure out a way to make a living and I may even be tempted to cut corners in order to feed my family.

Thankfully, I don’t, nor does my team, work on commission. Our incentives are aligned with our clients’ incentives. Our professional approach allows us to take the time to not only understand deeply our clients’ business, their goals and their needs, but to identify, recruit, and woo top talent (talent that is not actively looking for a job – they’re too busy building someone else’s company!). It’s amazing how well things can work when incentives are aligned!

Next time, we’ll take a look at Reason #4: Because Quality Matters to You.

Previously in The Recruiting Industry is Broken:

Part One: Misaligned incentives inherent in the “contingent” recruiting model and their commission-only compensation models mean contingent recruiters are in direct competition with YOU, the client, for talent.

Part Two: The contingent recruiting industry is built on speed. Speed that is necessitated not by your desire to make a quick hire, but by their need to beat all the other recruiters (and you) to the punch!

Part Three: Your shrewd ability to negotiate your contingent recruiter’s fees usually means they focus their attention on higher dollar roles and you only get candidates rejected by those higher fee clients.

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