After getting a bunch of great publicity (thanks Techcrunch, SMH and many others) over the last few days following our funding announcement, I’ve been inundated by recruiters reaching out to let me know about the great candidates they have.
The reply to all of them is the same: we don’t work with recruiters.
I’ve got a bunch of friends who work in the HR and recruiting sector so this isn’t a professional slight, but more a wake up call for the many bottom feeders out there trying to professionally pimp.
There’s two reasons for this: candidate motivation and agency conflict.
Firstly, if someone really wants to work with us and be part of an ambitious startup revolutionizing how the millions of small and medium professionals out there manage their client work and businesses, there is a very easy way to tell us – email firstname.lastname@example.org. We also have a great Careers page listing lots of positions and we’re always looking for great people.
If someone would truly like to join a company like ours, the channel really couldn’t be easier. In this context, a recruiter isn’t adding any value on this end and so we don’t think it is right to spend 15%-25% on top of that person’s salary feeding the recruiter for holding back a candidate like they own them and only making introductions to those that want to pay the pimp fee. We’re a startup, cash is our survival lifeblood to achieve our mission, and I’m sure candidates would rather have that money spent on perks they’ll will appreciate and enjoy.
There’s a concept I learned in business school called Agency Conflict that’s a really big issue that is at the rotting heart of many industries. Also known as the Agency Problem or the Principal-Agent Problem, the short version is that someone (or some group) charge another person (or group), known as the agent to be responsible for safeguarding their interests. Agency conflict occurs where the agent has a different incentive or motivation than the person who’s trusting them to look after their interests – whether it be the CEO who says no to a great take-over offer because they want to protect their job at the expense of the shareholders, or the financial planner who recommends an investment over another because it pays a better commission (which has regularly ended in tears).
In the case of a recruiter who’s emailing someone like me telling me they’ve got some great people who would love to work for our company, this is a really big deal and presents a moral conflict I’m not prepared to enable. If you’re *really* working for a person, then you should be obliged to do what’s best for that person. Holding people back (either by not telling them about a position, or by mentioning “people” but refusing to then make an introduction or sending redacted resumes until you get a commitment to make a cut on their first year salary) is classic agency conflict – the recruiter is putting their own financial interest over the interests of the people who are trusting them to be helped.
Now, of course, the recruiters emailing prolifically offering “their people” over the last week might indeed be going back to their clients and saying “hey, these guys don’t work with recruiters, but they’d probably be a good fit, but you’re on your own if you want to apply” – I really hope they are, so they can sleep well at night.
Some folks will understandably be thinking “well, hang on, how are recruiters supposed to make money then?” I don’t know what the answer is. Since they’re working as an agent of the person looking for a job, then perhaps the candidate should be paying them for their services – or at least telling them they’ll come across dozens of great jobs they won’t be passing back to the candidate or making introductions on because the agent is looking after themselves first. Or perhaps the answer is to have a general “finders fee” whether it be paid to a recruiter who makes the connection or an internal team member who recommends a successful candidate. I don’t know – I just know our response to recruiters offering “their people” is going to be the same – we don’t work with recruiters who put their own interests ahead of their client’s.
Nice blog and thinking. After I worked for 6 years in Sydney, I am aware how Agencies work and how great candidates almost never make it through recruiting agencies 🙂 Good luck with your hiring
Absolutely spot on. Excellent.