Everyone knows that recruiters play a big part of the hiring process. I dig more into the relationship between the recruiter, candidate (you!), and the client (hiring company) in my article here. Ultimately, the recruiter does not work for you. The recruiter is hired by the client to fill job openings with qualified candidates.
Third-party means that the recruiters don’t work directly for the client. Companies hire these recruiters to go into the market, screen candidates, and present them to the hiring managers. Third-party recruiters are brought on as needed but are not a permanent cost to the client. This is why companies (the client) like to use them so much.
Think about it like if you hired someone to clean your house. Maybe they came once a month so you only paid them for when they worked. But you had a few months that your house wasn’t so dirty so you skipped the cleaning service. Then it was holidays and you’re too busy to clean. So you bring the cleaners in twice that month. But it’s not like the cleaners lived at your house and you paid them no matter what. Third-party recruiters are used the same way. Companies bring them on when they need and drop them off when they don’t.
One type of third-party recruiters is transactional. That means they simply connect the candidate and company and that’s all. These recruiters may get paid a small fee for bringing a candidate initially. Then if the candidate stays for a certain period of time (maybe 6 months or a year?), then the recruiter gets a final payout. These recruiters tended to be very specialized in certain industries. Depending on the jobs you’re searching, you may not run into this type recruiter. The transactional recruiter is motivated to find candidates with long-term potential so they’ll get their final payout.
The other type of third-party recruiter is a staffing agency. I mostly coach clients looking for IT jobs in the agile space (think scrum master, agile coach, analyst, developer, product owner) working at Fortune 500 or 1000 companies. In that world, I’ve found that staffing agencies are quite common. Popular IT staffing companies include:
Apex Systems (ASGN Incorporated)
With staffing agencies, you actually become an employee of their firm. Just like the armies of recruiters they have working for them, you’ll become eligible for the same benefits like medical insurance, 401k match, etc. This concept initially blew my mind. I was so confused as to why I was going to be working at a recruiting firm? Some staffing agencies call their recruiters and account manager as staff where are the candidates out working at clients are called consultants or contractors. It’s a word salad. Yum. Not really. It’s super confusing which is why I’m trying to help you understand.
For example, I was working as a Business Analyst working at Bank of America but each week, my paycheck would come from Apex Recruiting. Technically, I was “consulting” but essentially, I was working as a Business Analyst on a short-term limited engagement contract. Most of my bank colleagues called me a “contractor” since I was working on contract.
People who worked directly for the bank were referred to as FTE (Full-Time Employee) or permanent. It’s confusing because technically, I was also working full-time but I was full-time for Apex Recruiting, not the bank. So even though I’m FTE, I’m not FTE directly for the bank. I’m a contractor. I’d have to submit a weekly time card to Apex. Apex would pay me directly and in turn Apex would bill Bank of America for the time I worked. If Apex paid me x dollars an hour, the bank would pay Apex x + margin an hour. The margin is how Apex makes their money.
The staffing agency recruiters are motivated by you being happy and working out the duration of the contract. Each time you get paid, the staffing agency gets paid.
Most people are used to recruiters in the job search. The recruiter’s job is to go out in the market to find and screen for qualified candidates. If you’ve got a nice targeted resume and you post it on job boards like Indeed or Career Builder, you’ll find yourself inundated with calls and emails from recruiters. Recruiters have access to lots of job openings and they’re scouring the market to find candidates. They often have elevated paid accounts on LinkedIn that allow them to see your profile and contact with InMail even if you’re not officially connected. You can enable the LinkedIn setting to Let recruiters know you’re open to opportunities.
Remember how I kept emphasizing that in the job search, we have three major players?
Candidate – you
Recruiter – looks for candidates like you
Client – company that is hiring people like you
At staffing agencies, the recruiters finds the candidates (that part you know!) and then they have account managers that look after the clients. Just like the name implies, account managers manage the client accounts. They build relationships with hiring manager in hopes that when there is a job opening, that hiring manager will call that account manager with the opportunity.
When I worked at Wells Fargo, my boss was a hiring manager so he was constantly being “courted” by account managers. They’d offer to bring him breakfast and buy his lunch. They wanted to carry favor with him. The account managers hoped that when he needed to grow his team, he would remember those tasty meals and call them.
When I made my first transition to banking, I hunted down a recruiter named Julie at Apex Recruiting. Eventually, she agreed to meet with me for a few minutes. Back then, I was an unpolished porcupine. I couldn’t share my story for squat but I guess I impressed Julie with my assertiveness in tracking her down. Feel free to DM me on Social Media if you want to hear the whole story!
Less than a week later, Julie the recruiter called me and shared that her account manager, Ali, had an opportunity at the bank. They said the opening was moving fast (it’s always moving fast!). The hiring manager at Bank of America wanted a candidate with a fresh perspective. He didn’t want someone with the traditional banking background. Ding ding ding ding ding!
I found myself on a phone screen the next morning (just one week after having met Julie) at 9:30am with the Bank of America hiring manager. By 2:30pm that afternoon, I had a job offer.
On my first day on the job, Ali, the account manager met me in the lobby. At first, I thought this was just so nice for her to offer. In hindsight, I realized that she wanted to double-check that I actually showed up. Plus she wanted another chance to talk to the hiring manager. I later learned that my boss, the hiring manager, considered Ali a go-to account manager for his hiring needs. See how that all works?
>> Names were not changed to protect the innocent. <<
These recruiters work directly for the company. This model is more straightforward but there’s still a subtle difference worth noting. This is the model most people think about when you’re applying for work directly at a company.
For example, when I applied for my role at Wells Fargo, I was interacting with an in-house recruiter. He was a direct employee of Wells Fargo with an @wellsfargo.com email address. His job was to function as the go between me and the hiring manager (who would become my boss). This recruiter handled all of the negotiating, presented me with my offer letter, and ushered me through the background checking process.
A general recruiter works directly for the Human Resources (HR) group and will work with all types of roles. They know general HR processes but they usually don’t know much about the specific hiring managers and roles. General in-house recruiters are motivated to close the immediate deal and move on to the next one. They are more transactional.
A department specific recruiter will also likely for HR but they will be assigned to work with specific departments or business groups. These recruiters tend to have a better understanding of the business. Since they’re working the same hiring managers repeatedly, they’ll have deeper relationships and have a better feel for what the hiring manager wants. A department specific recruiter will have a lot more insight to share about the job, the role, and most importantly, what this department wants in a candidate. When working with a department specific recruiter, it’s worth spending extra time on the initial screening interview to ask questions and gain insight for the final interview.
These in-house recruiters are motivated to bring high quality talent to the hiring manager. Since they’ll continue to work with the same team(s), it benefits them to understand the ideal candidate profile. When working with in-house recruiters, there are a few ways to identify if they are general or department specific.
1. The easiest most straightforward is just to ask. This will open up the conversation and help you gain insight on what to discuss.
2. If you know someone that works at the company, you can ask them to look in their org chart. Sometimes you can tell based on what department the recruiter is in or the job title. A general recruiter may work directly in HR whereas a department specific recruiter may have a title like Technology Recruiter vs. HR.
A recruiter is a key player in the job search. When you take the time to understand who they work for and what motivates them, you’ll better understand how to interact to improve your chances during the job search.
* Third-party transactional recruiter – Works in niche fields. Gets paid after candidate work an extended period of time like six months or longer. They are motivated to find candidates who are reliable and long-term so they can get their big payout.
* Third-party staffing agency – In this model, you become an employee of the agency. These recruiters are motivated to close deals fast since the contracts are often short-term. They want you to keep working the duration of the contract so they can get paid.
* In-house general recruiters – Work directly for the client. They don’t align with a specific department. They are motivated to complete the transaction and move on.
* Department specific recruiters – They also work directly for the client but they are aligned to a specific department or business group. They have the most insight about the teams and job openings. They are motivated to bring the best talent so they can keep a good relationship with the hiring manager and team.