Dan Thompson on What Recruiters Do and How to Make it Work for You

For people who aren’t familiar, what exactly does a recruiter do?

There are a variety of kinds of recruiters. Some work inside a company, hiring directly for that company. And some are third-party recruiters, where the companies are their clients. 

Here at Vaco, we do 3 primary things: 

The biggest one is helping connect businesses with top talent. People may be most familiar with this in the context of headhunting where a company wants to fill a leadership or very senior role—Hey Dan, we’re looking for a new CTO for our organization—and they give us a very specific profile of what they’re looking for and we help find the right candidate.

But this sort of direct hire doesn’t just happen at the executive level, we help companies find candidates for all kinds of roles.

And since I know people are probably curious, we get a fee based on the first year salary. [Editor’s note: we’ll talk in more detail about the incentive structure and how recruiters get paid later in the interview.]

Then there’s staff augmentation or contract staffing. Sometimes companies need extra hands on deck but not permanently. Maybe someone is out because of FMLA (Family and Medical Leave Act) or the company is building a new application or doing a big system upgrade and they want a team of developers for 6-12 months, or a tax firm needs extra help for just a couple months during tax season.

And again recruiting firms are paid either through a mark-up on the candidate’s pay rate (and cost of employment) during a staff augmentation assignment, based on hours worked over the course of the contract, or as a percentage of the individual’s salary in a direct hire. It’s important to note that this is a business expenditure, not something that’s “taken” from the candidate’s salary. Recruitment firms are paid out of operating expenses, not payroll expenses. 

We also do project-based consulting work, helping companies through digital transformations, building data warehouses, data migration projects, that sort of thing.

If a recruiter reaches out to you about an opportunity, you don’t necessarily need to do the interview, but at least listen! Recruiters are a great ears-to-the-ground source for what’s happening in your local market, how your salary compares to the market, what companies are hiring, who is going through a big growth spurt etc. You can glean a lot of information and knowledge about your market or industry from a recruiter.

[Editor’s note: Whether the idea of recruiters reaching out to you is expected or surprising likely depends a lot on your job and level of experience. In tech, especially software engineering, it’s very common. It’s also very common for mid-level BigLaw associates and above. But in the early part of my career, I had no idea recruiters existed and had never been contacted by one.]

This sounds like a basic question, but why talk to a recruiter at all? How can they help people looking for new opportunities?

Recruiters read hundreds of resumes a day. They can give great feedback on how to improve your resume to make it more competitive. Ask any recruiter you talk with how can I improve my resume, how can I improve my interviewing.

They’re great at giving advice on salary expectations. With helping you understand, hey am I fairly paid? What does someone with my years of experience normally get on the market? And understanding trends in work expectations, are roles remote, hybrid, fully in office.

They have more access to market data than most candidates, but that doesn’t mean they always have good news for you. Still it’s a really helpful second opinion where they can say, if you’re on the higher end of the salary data, it might be a good idea to stay where you’re at because there might not be many opportunities or the opportunities might be slimmer/the process might take longer.

The recruiter can offer all kinds of insights you wouldn’t have otherwise: What’s the interview process like? What’s the company culture like? What’s the hiring manager like? What kind of experience do they have placing people at this company? How long do those people stay there? What do the benefits look like? Which can save you a bunch of time going through the full interview process for someplace that isn’t going to be a good fit.

People at small to mid-sized companies can get pigeonholed only using a certain tech stack and a recruiter can tell you what other tech companies are using and what skills or experience are most in demand. You can try and look up national data, maybe even local data, but it’s pretty limited. A recruiter can share with you what the market is saying for your specific skill set/location/years of experience. They will tell you clients in this industry are looking for XYZ. And armed with that knowledge you can figure out if you can build those skills in your current role or do outside education or what.

What career mistakes do you see people making? What advice do you give your clients that you want more people to hear?

I recommend people try to connect with a recruiter within their first 2-3 years of work experience. It doesn't mean you have to switch jobs, but this information helps you level set against the competition. A lot of people don’t do this enough and end up staying too long at jobs where they’re underpaid, or they aren’t aware of what’s happening in the market and so don’t know there are opportunities available that might be better career investment or might offer better work life balance or whatever your priorities are.

Recruiters can help you understand what skills you need to make the leap to the next level. If I’m in a senior role, what skill set do I need to be a team lead or a manager or a director?

What would you say for folks shy about reaching out to a recruiter? Or worried the recruiter will have no interest in talking to them?

A lot of recruiters, especially at third-party companies, have metrics about how many people they have to meet in a week. If you’re a good candidate that’s interested in exploring more, I would try to connect with them on LinkedIn. In most cases, they’ll be excited to hear from you! Just say, “Hey, I’m interested in exploring the market” and if the recruiter sees potential, they’re going to want to work with you.

How do you find a recruiter?

A combination of doing your research and going to the places the recruiters are.

 For example, if you’re in accounting or finance, research what recruiting firms in your area work in these areas. And then try to get on their radar. Recruiters often go to user groups and meet-up. Ask other people in your network in your field (maybe not your coworkers so they don’t sound any alarms internally haha) if they’ve worked with recruiters or know of any.

The job market is tough right now. There are a lot of folks searching, especially in tech, people coming from the federal workforce. What mistakes or mis-assumptions do people make? What do you wish people knew about job searching?

My number one tip is to stay in touch with people in your network. The best way to get a job is through an internal connection at a company. Talk to your peers. Connect with people on LinkedIn. Go to networking events.

It doesn’t have to be the largest user groups in the area, but go places where there are people who do the same thing you do. The same way talking to a recruiter is valuable, talk to your peers. Ask people how they got into their current company.

A lot of times people get so focused on “I’ve got to apply to a bunch of jobs” and you do need to do that, but you also need to talk to people.

Referrals work because the company has already vetted that person and if they’re willing to put their name behind you, not only from a skill set perspective, but from a personality, a team fit/company culture perspective, those are really valuable. It saves the company money if they can hire faster or candidates that work out better.

I feel like there’s more you want to say on applying.

Yes! Avoid the easy apply button on LinkedIn and Indeed. Go to the company’s website. Read the job description.

Remember, for LinkedIn and Indeed the client is the job poster, not you, the job seeker. They can charge more for posts the more people they can say are applying. So they’re incentivized to get 1000 people to apply for a post rather than the 400 people who are actually a good fit for the role. This also means the number of people they say have applied may not be fully accurate.

[Editor’s note: One thing I think Dan is particularly insightful about is always seeking to understand the business model and the incentives created. I think he does a great job demystifying that for recruiting and also here. If you understand how the money flows, it helps you understand where the incentives are aligned with yours and where they might diverge.]

Companies are getting spammed by bots and fake resumes, so they’re putting in little tests. Like the job description might say, “don’t put in this phrase in your application,” knowing if you’re using ChatGPT/AI it’s easily confused and might add that phrase instead.

Take the extra step and go to the company website and apply that way. I know it’s frustrating filling out a bunch of different job applications. And then try to find the internal recruiter and just say, hey I just wanted to let you know I applied. And then maybe 2-3 sentences about why you’re a good fit.

How do you find the recruiter for a specific job?

Sometimes the affiliated recruiter is listed on the application. You can try LinkedIn. At smaller companies, you might even be able to figure out who the hiring manager is for a given role. 

Submitting a job application is the start of your interaction with the company. You certainly need to do that to be considered. If you have any path to have someone on the inside advocate for you, it won’t get you the job, but it can increase the chances that out of the 1000 resumes, yours at least gets looked at by a human.

Let’s just talk about how recruiters get paid. I suspect this is not super well understood and folks may wonder how well their incentives are aligned with the recruiter or what questions they need to be thinking about here.

Recruiting fees for third-party recruiters are built in as operating costs for the organization, they don’t come out of anyone’s salary. The recruiter’s fee is based on the candidate’s take home salary so the recruiter is incentivized to advocate for you there. 

Now, there are some nuances depending on the circumstances. Sometimes it’s not beneficial to be at the higher end of the salary range if you’re not quite at that level. So for example, I would rather advocate a candidate getting $120,000 where I know they’re going to excel than trying to push the company to $140k knowing the candidate doesn’t have quite the seniority or experience to justify it yet. 

Recruiters are also interested in ensuring the candidate works out long term. Most recruiters only get paid after someone has worked in the role for 90 days. And this is a long-term relationship business, so we’re really looking to make sure the company is happy because we’ll work with them again, and the candidate is happy because we might end up placing them multiple times during their career.

Should you talk to multiple recruiters, like you’d get multiple quotes to paint your house or get a medical second opinion?

Not every recruiter will have access to every opportunity. A recruiter might be new to the industry or the city. Also, I won’t work with someone leaving a company that is a current client, for example. Find someone you click with, ask for recommendations from people in your network, all the standard advice.

These can be fruitful long-term relationships—I just placed someone I’ve known for 11 years. I’ve never placed him once, but we’ve just kept in touch and I’ve followed his career. I met him when he was a junior developer and now he’s a senior data architect.

That’s amazing. I love stories of how networking pays off in unexpected ways. It’s not a one-time transactional thing. It’s just building relationships with other humans.

Final advice on working with recruiters?

At the end of the day, recruiters are there to work on behalf of clients. Recruiters aren’t your friend or advocate. But they’re a skilled professional who brings insight and perspective you might not have otherwise. They should tell you stuff that you don’t want to hear sometimes. And they’re also a sherpa, an expert, to guide you along your journey.___________________________________________

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Dan’s Recommendations

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▶ https://www.vaco.com/