Technical IT Recruiter Los Angeles

November 24, 2009 • 7:37 pm 0

Contingency Search vs. Retained Search

On the surface, the difference between contingency and retained search appears to simply be an issue of how a search firm gets paid. A contingency recruiter earns a fee only when a company hires a candidate they send out. On the other hand, a retained search firm secures a percentage of the fee upfront before they even perform a search.

Why pay for something before you get it?

This question implies that what you are paying for is a new employee. But that’s a false notion. What you’re actually paying for is a quality candidate pool to choose that new employee from.

Your financial commitment upfront, or lack thereof, is precisely why the search process, level of dedication, and quality of the candidate pool you can expect are so different between the two search types.

Contingency Search

Without being paid in advance, a contingency recruiter has no assurance of being paid at all. Consequently, contingency recruiting is purely a numbers game where success depends largely on factors outside of the recruiter’s control. With these kinds of odds stacked against them, it’s no wonder contingency recruiters are notorious for poor service, unscrupulous tactics and an aggressive telesales mentality.

Since there’s no guarantee of getting paid, contingency recruiters can’t afford to commit to you as a client or dedicate much time to your important search. And because contingency recruiters don’t require a financial commitment upfront, they encourage you to engage multiple recruiters simultaneously. Yet, all this does is create fierce competition between all of your recruiters for the same “active” candidates. As a result, the focus is not on finding you the best possible candidates, but on being the first to send you the easiest to find “potential” candidates.

The constant fear of not being the first to discover and send you the easy to find candidates thwarts any efforts by contingency recruiters to dig deeper to find you less obvious but higher quality candidates. Therefore, contingency recruiters rarely reach beyond their own database and public job boards to find you candidates. Obviously, this approach leaves a vast pool of talented passive candidates untapped. That’s exactly why contingency recruiters rarely ever deliver “A” players.

To compound the problem, contingency recruiters don’t use a structured search process. This means no time is spent on need analysis which results in a superficial job understanding and therefore a severely misguided search. Consequently, the chance of a candidate mismatch is significantly increased. While good candidates are sometimes recruited by contingency recruiters, they’re often hired for the wrong reasons and quit or are terminated which translates into a costly hiring mistake.

At an estimated cost of 24 times an employee’s annual salary, hiring mistakes represent billions of dollars in financial loss to businesses. Some estimates put the percentages of hiring mistakes in the 50% range! Without doubt, contingency recruiting is largely responsible for the colossal hiring mistake rate and the exorbitant amount of wasted money associated with it.

Retained Search

Unlike a contingency search firm, a retained search firm has a true “client” relationship. A retained search firm works in a genuine consultancy capacity with you to upgrade your talent corps across the board and to formulate a winning talent acquisition strategy.

If you are serious about hiring right, the benefits of a retained search are tremendous. Your advance payment secures a high level of commitment from the search firm. This means they will dedicate a team of sourcing professionals to your search, set target dates for specified deliverables, use deep network sourcing, and give you the right of first refusal on every candidate they find.

This degree of effort is essential to perform the type of candidate research it takes to deliver high potential candidates. The reason being that top candidates are usually not active “job seekers” and therefore don’t have their resumes posted online where contingency recruiters can find them.

Like any true consulting relationship, the level of energy and resources that a retained search firm must invest in your business is simply not feasible without any assurance of ever being paid. Because of your financial commitment upfront, a retained search firm can safely invest the time and effort required to source high quality candidates for you. That’s because they know they will ultimately fill your openings and be compensated for their efforts.

Conclusion

Contingency recruiters merely fill jobs. Retained recruiters bring talent to the table. Contingency recruiters have tactical relationships with businesses. Retained recruiters have strategic partnerships with their clients.

Every company that puts a premium on quality hiring and is in the market for “A” players uses a retained search firm. Retained search is clearly the best option for filling positions of strategic importance. Obviously, that includes executive leadership and high level management positions; but it also includes high-skill IT positions such as software designers, developers, team leaders and architects. In short, retained search is the only sensible option if the person you are hiring can directly impact the performance of your organization.

If the fee is reasonable contingency search is practical for positions that require a commoditized skills set that is widely available and easy to replace. In other words, there are many qualified candidates on the market. Unfortunately, the fee is never reasonable and at 20% – 30% contingency recruiting is a big waste of money. If you’re willing to pay that much for finding job board candidates why not just pay one-third upfront and get topnotch full service provided by a retained recruiter for the same price?

Or consider using Job Board Recruiters. By offering a fee of 5.8% at least they’re savvy enough to know what contingency recruiting is actually worth.

Filed under: Recruiting , contingency recruiting, recruiting industry, retained search

October 6, 2009 • 7:05 pm 0

How The Recession Will Change The Landscape Of Professional Recruiting Services

You don’t need a crystal ball to see that a cataclysmic shift is happening within the recruiting space. The recruiting services landscape already looks starkly different than it did before the economic meltdown and is continuing to morph dramatically.

The primary value that a recruiter used to offer was finding candidates for their clients and selling candidates on their client’s opportunities. Everything else was added value. Fast forward to today, now finding candidates and selling them on their client’s opportunities is the added value part and everything else is the real value. The reality is that finding people today is very easy to do courtesy of web technology and the abundance of resources and tools available. Anybody can do it and companies have access to the same internet tools as recruiters do. Consequently, recruiters will need to redefine their value proposition to remain competitive in this rapidly changing industry.

I think there are several key areas where this new value will manifest itself. For all intents and purposes, recruiting as we once knew it, is obsolete. And the future looks bleak for recruiters who don’t augment their value proposition so that it includes some combination of the following benefits.

Niche recruiting.

The recruiting industry as a whole was becoming a commodity. What was once a very generalized and uniform industry is now starting to become more mosaic in response. This fragmentation is the result of a visible trend in high specialization recruiting. Recruiters will need to find a niche to stay competitive. It will be the recruiters who are subject matter experts with singular focus in a narrow space that will be the most valuable in the near future.

Why is having a niche so important? First, it creates a perception that the recruiter is a recognized industry expert. This status appeals to both prospective clients and candidates. Furthermore, it gives recruiters instant credibility with passive candidates which is important these days considering that candidate resistence to recruiters is at an all-time high. Clearly, the most effective way to pique the interest of a passive candidate is to speak their language and to be cognizant of their money skills. Niche recruiters can do this better than anybody else and that’s why they are so valuable.

Unfortunately, finding a niche is very difficult. If you choose the wrong one, it’s not easy to reestablish yourself in another. After all, the whole value of having a niche is long term exposure and staying power in a given area. Nonetheless, being identified with a niche is a necessity for any recruiter with an eye on succeeding in the business long term.

Network equity.

Tomorrow’s recruiters will need to have colossal networks to offer any realistic value to their clients. By virtue of their relationship with a recruiter, clients will expect to gain equity in a highly valuable network.

There are so many important reasons for this and it’s beyond the scope of this blog entry to cover them all. Suffice it to say, that recruiters with substantial networks can source better quality candidates and do so in a fraction of the time when compared to recruiters with negligible networks.

A large network will also bolster a recruiter’s image and repute. A large network instantly conveys the impression of good standing within the professional community. Unfortunately, due to years of declining sentiment toward recruiters in general, a good reputation must be quickly established in order to overcome general recruiter resistance on both the client and candidate side.

Web 2.0 expertise.

For most recruiters, the extent of their internet tools proficiency is running Boolean search queries on job boards. That simply won’t cut it anymore. The days of earning high fees for being the first in line to present low hanging fruit to clients is, thankfully, grinding to a halt.

Recruiters will need to master the use of web 2.0 tools to be able to offer any realistic value to their clients. They will need to be expert social networkers and cyber sleuths. Unfortunately, learning this technology is daunting and presents a steep learning curve for earlier generation recruiters. Sadly, I think web 2.0 is going to wipe this group out. But that’s the hard reality.

Job Marketing.

Without question, a job marketing strategy is an essential aspect of any recruiting initiative today. Amazingly enough, this basic and vital recruiting function is rarely ever provided by recruiters and search firms. Recruiters will need to be able to write compelling job ads for their clients that stand out from all the others online. This adds a creative aspect to recruiting that was never required before in a traditionally conservative sales oriented industry. Without question, new generation recruiters will need to have creative mojo in the area of job marketing to be truly valuable to a client. They will also need to be savvy enough with web 2.0 to choose the right marketing channels in order to ensure their job ads reach the right candidate audience.

Long gone are the days of dull requirements-intensive job descriptions that describe the person who will do the job. Job ads of the future will describe the job and the opportunity inherent in it. They will communicate the job value proposition in a creative and compelling way. Companies will expect their recruiters to provide this service. Recruiters who are not creative by nature and lack strong marketing skills will need to outsource this process in order to survive. Clearly, job marketing will be part and parcel of recruiting services in the future.

Hiring process support.

Fact is, managers have a full-plate supervising the people they already have. Needless to say, most aren’t enthusiastic about single-handedly managing the process of hiring new people as well. And for good reason. Considering that much of the hiring process is project management and documentation related, these activities lend themselves well to being delegated. Support in this area can provide tremendous value to a manager and I believe we will see some form of hiring process support commonly bundled with professional recruiting services in the future.

Some of these activities will include the consultation and documentation necessary to create a performance profile, writing the job ad, comprehensive candidate screening, interviewing technique coaching, assessment advice and tools, facilitating reference gathering and background checks, on-boarding support and a long-term performance evaluation roadmap.

Performance-based fee structure.

The Performance Payouts fee structure will become the industry norm. Performance Payouts means paying recruiting fees for a new hire’s success on the job, not for a recruiter’s success in finding the candidate. The key difference being that recruiting fees are paid for new hire results instead of candidate potential. Performance Payouts is a ‘try before you buy’ fee structure in which incremental payments representing a percentage of the total recruiting fee are spread out over a specified period of time and paid only as new hires reach calendar milestones. I think it is safe to say that the days of large lump sum fees payable 15 days after a candidate’s start date is coming to an abrupt end.

I believe those are several of the most dramatic changes that we can expect to see in the evolution of professional recruiting services. I look forward to hearing your thoughts!

Filed under: Recruiting , recession, Recruiting

September 22, 2009 • 4:45 pm 0

Take Network Equity Into Consideration When Choosing A Tech Recruiter

Clearly, one of a search firm’s greatest assets is the size of the network it brings to the table. When choosing a search firm to partner with, it’s important to ensure that by virtue of the relationship, you’ll be gaining equity in a highly valuable network.

This value is called Network Equity. To demonstrate such value, a search firm’s network must consist of hundreds of thousands of potential candidates that the firm can reach out to on behalf of your organization.

It’s not hard to conceive why a large, well managed network can offer tremendous value to a search firm’s clients. Fact is, search firms with massive networks can source better quality candidates and do so in a fraction of the time when compared to agencies with negligible networks.

Consequently, today’s best search firms are using web 2.0 tools to build potent networks that maximize the value of their recruiting services. To find out how extensive the network of a particular search firm is, simply ask the following questions about them…

How many results do I get if I Google the search firm’s name?
Do any of the firm’s recruiters write a blog? Is their content valuable? Is it frequently updated?
Do the firm’s recruiters have complete business profile on popular social networks?
Does the firm have groups on social media sites? How much activity do their groups have?
Does the firm send out frequent press releases?
How many first degree LinkedIn connections do the firm’s recruiters have?
How many people follow the firm’s recruiters on Twitter?
Does the firm have a high quality website? Does the site have features that enable visitors to interact?
How high does the firm’s website rank in search engines for keywords that describe its recruiting niche?
Does the firm have a professional, high quality corporate identity?

By answering these questions, you’ll find out how valuable a search firm’s network is. If the answers are marked by high numbers and multiple yeses, then the firm in question offers tremendous value and would clearly be an asset to your organization’s hiring initiatives.

Of course, we encourage you to ask these same questions about ITeego. We’re certain you will be impressed with the answers!

Filed under: Recruiting , tech recruiter

September 12, 2009 • 1:59 pm 1

ITeego Shares the Hiring Risk With Managers by Offering a ‘Try Before You Buy’ Recruiting Fee Structure

LOS ANGELES, CA–(Marketwire – September 2, 2009) – ITeego, a premier IT search agency based in Los Angeles, today announced a new Pay-for-Performance fee structure that eliminates the prohibitive costs and risks synonymous with third-party recruiting agencies. ITeego does so by offering clients a ‘try before you buy’ fee structure in which incremental payments representing a percentage of the total recruiting fee are spread out over the course of a year and paid only as new hires reach calendar day milestones.

“With Pay-for-Performance, we help managers mitigate the risk of hiring mistakes by sharing the risk with them. Pay-for-Performance means paying recruiting fees for a new hire’s success on the job, not for a recruiter’s success in finding the candidate. The key difference being that recruiting fees are paid for results instead of potential,” said Kevin Jenkins, IT Search Specialist at ITeego. “The logic is that if a new hire is worth keeping around at 30, 90, 180 and 365 days, then they’re worth the recruiting fee. The result is a better allocation of a manager’s HR budget and demonstrable value for their recruiting fee investment.”

Once a new hire has been on the job for a year, ITeego ultimately earns a total aggregate fee between 20% and 25%. When considering that traditional agencies charge anywhere from 20% to 35% and that amount must be paid in full usually within 10 days of a new hire’s start date, ITeego’s Pay-for-Performance fee structure should give hiring managers plenty to smile about.

“Not only is our Pay-for-Performance fee structure extremely cash flow friendly,” Mr. Jenkins adds, “but it also enables managers to easily correlate the recruiting cost of a new hire directly with the value of their performance on the job. Our clients know the value they’re getting for their recruiting fee investment before even paying it. With other agencies, the return on a recruiting fee investment is difficult to measure till much later, if ever. “

Low risk combined with minimal upfront costs, means ITeego’s Pay-for-Performance enables more businesses to procure and benefit from professional recruiting services than ever before. Incremental payments make it easier to green light new search assignments as well as recruit for multiple openings simultaneously. The clear advantage for managers is the ability to address on-going recruiting needs with minimal risk or financial impact.

ITeego is the first search agency in the world to offer a Pay-for-Performance fee structure.

About ITeego

ITeego specializes in IT recruiting exclusively for start-up and growth stage software and internet technology companies based in southern California. ITeego helps IT leaders maximize team performance through superior hiring. More information about ITeego and the Pay-for-Performance fee structure can be found at www.iteegosearch.com.

Filed under: Recruiting , recruiting fees

• 1:51 pm 0

Who Is The Hiring Manager? High Potential Candidates Want to Know!

This is one of the first questions every high potential candidate asks a recruiter. That’s why the hiring manager is so important to recruiting success, and why getting to know the hiring manager is such an essential part of Qualifying The Search.

The reality is that it is incredibly difficult, if not impossible, to interest a top candidate in a position that does not report to a highly competent, influential, and accessible manager.

Below are three key traits hiring managers must impress upon the candidates they interview to ensure these candidates choose in their favor when making a choice between multiple opportunities.

Is He/She Competent?

A competent manager knows the performance objectives of the job, not just the skills required to do the job. They see the big picture. They know what needs to be accomplished at 30, 90, 180 and 365 day milestones to be successful on the job. And they know how to communicate this with authority and flair to the candidates they interview.

Because they know the performance objectives, they’re are able to lead a focused interview that zeros in on job specific competencies. Top candidates respect this type of interview. What they don’t respect are superficial interviews that focus on hard skills and years experience. Competent managers feel the same way. They are most interested in a candidate’s past accomplishments and anchoring them with job specific performance objectives. They are most interested in conducting visualization exercises to determine how the candidate would solve actual problems inherent in the job.

Competent managers are highly objective and do not allow personal bias or first impressions to enter into the equation. Their singular focus is on hiring a person who can do the job, not get the job. As such, they look for doing the job traits such as drive, achievements, team skills and leadership. And they’re not overly impressed with getting the job traits like handshakes, charisma and assertiveness.

In a nutshell, a hiring manager’s competency shines through when they demonstrate that they know what needs to be accomplished, what competencies are required to accomplish it, and what questions to ask in order to find out if the person they’re interviewing can accomplish it.

Is He/She Influential?

High potential candidates don’t make career decisions based on tactical criteria such as salary, title or location. They base their career decisions on strategic reasons like the challenges and upward mobility inherent in an opportunity. This is why being an influential manager is essential to successfully recruiting top candidates. An influential hiring manager is plays a significant role in recruiting success when the candidates they want to hire have a choice between multiple opportunities. The presence of an influential hiring manager ensures the decision will almost invariably tilt in their favor.

Influential managers can always answer the question, Why would a top person want this job? They can always tie their position to a major company initiative and express how the role is critical to company success. Influential managers realize that top candidates always look at the big picture, so they take every opportunity possible during an interview to emphasize the importance of the job to the overall success of the company.

Finally, influential managers inspire others. They are passionate about their work, their team, their projects and they take immense pride in how their personal success translates into success for the company. An influential manager’s confidence and passion is infectious. High potential candidates are inspired by this type of leader and want to work for them.

Is He/She Accessible?

Top people take jobs because of what they will be doing, learning and becoming in a new position. The distance between what they will be doing initially, and what they will ultimately become, is bridged by the knowledge they gain along the way. This knowledge is derived from on the job experience learning new things in combination with insight offered by their hiring manager as a mentor. It goes without saying, that a manager who is distant, too busy or inaccessible cannot serve as a quality mentor.

Nothing accelerates a manager’s career faster than being recognized for their ability to successfully develop and promote others. Accessibility is the key here. These managers understand the importance of helping others to develop. A strong hiring manager realizes that their success, or failure, hinges on the performance of their group or team. So they make themselves readily accessible to everybody and anybody who can influence their success. This is includes recruiters and candidates as well during the recruiting process.

*****

A poor hiring manager is the biggest roadblock to successfully recruiting top people.

It’s important to understand that we are speaking specifically about high potential candidates here. Second-rate candidates are rarely interested in the quality of the manager. These people only have tactical concerns like salary, title and location on their mind. For the best however, it is amazing how flexible they can be on tactical issues when there’s a first-class manager in the picture.

Without a doubt, a great hiring manager is the ultimate ace up any recruiter’s sleeve. See The Core Competencies Of A Great Hiring Manager for further reading on the topic of hiring managers.

Filed under: Recruiting , hiring manager, interviewing