How recruiters work
An industry tour and what it means for you
I’ll start with some disclaimers and points for consideration:
My knowledge is principally in the UK. I’ve worked as an external recruiter, in-house recruiter, hiring manager, and I’ve looked for work in a downturn.
This post is aimed at giving a little insight into standard working practices, how we work with hiring processes, and why that leads to some of the experiences commonly talked about. It’s about expectation management.
I’ll use broad terms where applicable, and a steer on how others may use more obscure terminology to discuss the same
These are the areas I’ll cover today:
What a candidate is
Different agency recruitment models
Different types of agency recruiter
The internal recruiter
A few takeaways
What a candidate is
If you jump on any recruiter website, I’m pretty sure the vast majority will say something along these lines:
“We’re disrupting the market with better candidate experience.” As well as a lot of promises of being different in a way that looks much the same as everyone else.
And yet what your experience is will differ wildly.
Part of this may be marketing gumpf.
My belief, based on many discussions with fellow recruiters, is that the industry definition is different to a job seeker’s definition.
The vast majority of hiring processes see candidates as an employable person being considered for a job.
I use this terminology myself. For example, a job advert may have 99 applications, while only 5 are potential candidates - because they meet the criteria of the role, while the remaining applicants don’t.
The nuance of this definition is that the more cynical the process, the worse the memory retention of which candidates were considered.
By this I mean some companies may have seen you as a candidate at 2nd stage interview, then completely forget about you if they’ve discounted you from the process - because you are no longer a candidate.
Using this definition, many recruiters think they give a first class of candidate experience because they only relate it to the people they consider as candidates.
This is equally true of someone who treats everyone decently and those who only treat people they place into jobs decently.
On the other hand, pretty much everyone that considers employment sees themselves as a candidate for employment.
After all, assuming you are accountable, you wouldn’t apply for any job you didn’t see yourself as suitable for.
And even if you chose not to apply, it’s not necessarily because you didn’t see yourself as a candidate. It may be because though you are a great candidate for that vacancy, your experience of the process made you choose to step away. Which might be as simple as not liking the advert or email you read.
There’s another industry nuance to the candidate definition.
In the same way you may have heard about the hidden jobs market, so too do we talk about the passive candidate market:
“70% of candidates aren’t looking for a job, and these are the best candidates.”
Not my words, btw.
If you’re interested in reading more on the active vs passive candidate debate, I’ve written about it in my other newsletter: Your Mileage May Vary.
If you think it strange that I’ve started an article on ‘how recruiters work’ with a discussion on candidates, it’s simply because our relationship with our candidates is a sign of how we work with employers.
Without placing candidates in one form or another, most recruiters wouldn’t make any money, so it is deeply integrated into how we work.
Different agency recruitment models
Typically agencies earn their money through the successful placement of staff, irrespective of the nature of work.
The fee is often derived as a percentage of salary, and in most situations is budgeted for separately from the pay the new employee receives.
The overall steps any recruiter works to are these:
Receive job description from employer
Advertise job (either on a job board or through outreach like emails, calls)
Find and submit qualified candidates
Arrange interviews
Coordinate offer process
The differentiator is the quality of information at each step, and how rigorously they are executed.
For example, my requirement for recruiting a vacancy is a full consultation on the company, vacancy, context and culture, which I summarise in writing in a detailed candidate pack. Where there are issues, I advise the employer on how we can overcome them. This is a simplified version of the first bullet point for me.
There are nuances around this type of process.
Some agencies may rely more on a video presentation, others may ‘sell in’ candidates.
Some agencies will use psychometrics or other types of assessments.
Some will meet all candidates, some won't even talk to them.
But the general steps have a lot of crossover.
In a 100% transactional process, the steps are reliant on the quality of documentation- job description and CV- and leave the candidate and employer to do much of the rest.
Most recruitment processes are somewhere in between (I’m sure some are better than mine too, or do it differently, but this is for illustration).
You can tell a transactional process from public adverts - if an advert looks like a copypasta job description, it’s likely they haven’t qualified the vacancy in detail. Equally it shows in how the agency interacts with you.
How we are paid also has an impact in quality of service.
2.1 Contingency
This is the most popular recruitment model, akin to ‘no win, no fee’ where we only derive income from placements. This might be a percentage of salary or fixed fee.
In the UK it’s estimated that the average fill rate is between 20% and 33%. This is a range from several sources, but next to impossible to pinpoint clearly.
At the lower end, for ease of math, for every vacancy filled, that recruiter won’t fill four vacancies. Therefore their fee implicitly accounts for unfulfilled work.
The reason it’s so low is that most vacancies provided to recruiters are given on a ‘multi-agency’ basis and even in competition with the employer themselves.
A lot of contingency recruitment is ‘first past the post’ too, in that a submitted CV is seen to be owned by the agency that submitted them first.
As a small exercise - let’s say Joe Recruiter has to fill 3 vacancies a month to hit target. This means he has to work on 15 vacancies a month to achieve the goal. You can see how this might impact quality of service, especially if there are multiple different candidates for each role. And especially if the race is on to get CVs over as quickly as possible.
This can result in some of the bad experiences talked about in recruitment, from refusing to divulge company information (for fear of divulging competitor secrets), to trying to find out who you are interviewing with (which may be so they can use them as leads) to dropping contact if there is nothing they can do for you.
It isn’t necessarily the case, and there are some great contingency recruiters out there, especially those that work more closely with employers, often with exclusivity.
Fwiw, when I was a pure contingency recruiter, early in my career, my fill rate varied between 50 and 70%, annually. It’s higher, consistently, now.
2.2 Other models
The traditional counterpoint to contingency is ‘retained’ where we receive a portion of a fee up front to service a vacancy. This also requires exclusivity, and because employers have skin in the game, better access to hiring process information.
I don’t like this term personally, because it can be used to imply one approach is better than the other. That’s not true, neither is inherently better, each with their own issues and challenges, and it is just a fee model.
However, what it can mean, in how it can lead to mutual obligation from the employer while allowing a more qualitative approach to candidate work - this is what can lead to superior service. I.e. the philosophy is what’s important, and a fee model can reflect that.
A different approach is through RPO (recruitment process outsourcing) whereby, like any outsourced arrangement, a 3rd party can manage recruitment for the employer, to different service levels.
Over the past few years we’ve seen other models come through from subscription types (bizarrely called Recruitment As A Service), to embedded/insourced (acting as an in-house talent/recruitment function but as a 3rd party, similar in notion to RPO) to Uber-style apps.
Personally, my approach is try and find employers who benefit from a strategic partnership - any fee is just a consequence, and can take roughly the shape of any of those above.
I think two important points come from the paragraphs above:
a/ that candidate experience is really hard to deliver consistently when dealing with the volume of vacancies you see in a contingency model, and still takes intent in other models
b/ that agencies are paid to fill jobs, not to help find people jobs
That second point can cause so much frustration if you assume it’s the job of a recruiter to help you find a role, especially when our marketing talks about how we help candidates - which comes back to that definition above.
Recruitment is typically quite a short-term business, so it’s rare that you’ll see recruiters cultivate long-term relationships with job seekers, if they can’t help you directly.
Which is ironic, considering many jobseekers will reciprocate the help they’ve received, with people they’ve built trust with. Doubly ironic when it’s someone with hiring authority that gets radio silence from previous suppliers.
I don’t mind saying that while my goal is to help job seekers, a happy byproduct is the same job seekers occasionally ask for my help recruiting in future, with less of the need to sell my credibility.
Different types of agency recruiter
There’s around as many types of agency recruiter as there are recruitment agencies.
What complicates matters is that as an industry we sometimes try to hide what we do by clever names, some of which may have meaning, some of which are smoke and mirrors.
Am I a boutique headhunter or am I a recruiter? Or a Talent Ecosystem Intelligence Officer?
I’m proud to be a recruiter who wears my process on my sleeve.
Whatever we term ourselves there are broadly a limited number of types of agency:
2.1 Temps/interim Agency
This is where you sign up for temporary work, on an hourly/daily rate employed through a contract for service.
This is typically on-demand recruitment, where the agency will make money through a margin/markup related to your rate.
Interim recruitment is a little different technically, in that interim typically have a skills set a traditional employee wouldn’t have, and provide a service through their limited company that is held outside of IR35.
The agency here will likely have a margin on the daily rate.
2.2 Permanent agency
An agency that works mainly on permanent vacancy, typically paid on filling a job by the employer.
2.3 Specialist recruiter
These are typically recruitment agencies that specialise in a domain. This could be a broad industry like ‘industrial’ or a market vertical like ‘marketing’.
It doesn’t necessarily mean they have specialist knowledge of the roles they recruit, although this can be the case. It means more that they regularly recruit on a type of role.
2.4 Generalist recruiter
Typically they don’t have one specialty, but may work closer with certain employers across a variety of vacancies. They might be pure scattergun of course!
2.5 Headhunter
This can mean many things, principally as a marketing spiel.
The idea is that headhunters access candidates who don’t apply for jobs, typically passive. Although broadly they use many of the same tools other recruiters do.
The crux of the message for employers is that they have a capability beyond what the employer can achieve themselves, which can be true.
2.6 RPO / embedded / insourced
An approach which manages part or all of a recruitment function. I find RPOs often are pitched at the multinational end of the market, while embedded / insourced are geared more towards start-ups and scale-ups.
2.7 And many more
Ultimately it shouldn’t matter what a recruiter does, more how they can be a conduit to a job.
It’s quite common to hear of job seekers blacklisting agencies for poor service. I get it - so frustrating, demoralising and occasionally crushing to be on the end of bad experience.
However, a key message I always say is this
Don’t let a bad process get in the way of what might be good employment
This is as true at the employer end as with agencies.
With agencies, the onus is often on winning the next vacancy, rather than giving service to people who may or may not be candidates. And that employer may not know how those agencies work.
While with employers, many hiring managers have never been trained on recruitment or interview, while being very busy at work. It’s not an excuse, but can lead to a more polarised experience as a candidate, than what they would be like to work with.
The internal recruiter
These are recruiters employed directly by the employer to fulfil their recruitment. Often these are termed Talent Acquisition Managers, Internal Recruiter, Recruitment Manager.
They aren’t always about just filling vacancies, but also about managing the system of recruitment.
It’s a field that is overwhelmed due to a huge amount of layoffs, where internal recruiters are often overburdened, even in very large companies.
When working on vacancies, the mandate is to fill those vacancies, and again this can lead to frustration if you ask corporate recruiters “do you have any jobs I might be suitable for?”.
Whether or not there is an argument that they could help you, it’s more effective to do the work yourself and either research the business to what they are recruiting, or simply ask directly “could you tell me who is the best contact for <your field>”, “when are you likely to recruit for these roles” and help them help you.
Takeaways
There’s so much to talk about on this subject, and I’ve no doubt I’ve missed glaringly obvious topics. If I have, let me know and I’ll update this article.
Equally it’s easy to oversimplify what is a huge and complex industry - please treat this as an illustration rather than something to specifically rely on.
Some takeaways:
It’s worth learning the rules of the recruitment game when you can. Be curious and ask questions.
While we should be criticised for poor behaviour, if you don’t understand why a recruiter works in a certain way, please don’t assume it’s for bad reason.
Recruitment is a stressful job at the best of times, which can lead to thick skin and callous behaviour. It’s not an excuse, more a symptom of the system we all work in.
The next article will be on ‘principles of a good CV’.
Thanks for reading.
Greg