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The Hidden Cost of Using an Executive Recruiter

Two things likely happened when you read the title of this blog:

  1. Recruiters – You immediately got defensive and starting formulating a scathing response to discredit any information I might share.
  2. Everyone else – You thought “Ah ha! I knew it!”

This is one of the most overlooked aspects I have to deal with on (what feels like) a daily basis. Here are two scenarios:

  • If you’re a HR professional or hiring manager, you hate it when recruiters bring you a candidate that’s above the top of the compensation range.
  • If you’re a recruiter, you can probably count on one hand the number of times a company’s target compensation has exceeded your expectations.

This comes on the heels of a recent conversation I had with a hiring manager while we were discussing their need for a Director of Demand Generation. After doing a full intake on the company, organizational culture, KPI’s of the role, etc. we started discussing salary.

I asked the hiring manager about the target compensation range, and they actually referenced the Demand Generation Salary Guide I recently published for the Bay Area.

“You tell me,” they said. “Based on the Salary Guide you came up with, I should expect to pay someone about $135K/year…that sounds about right to me.”

Here’s the thing – we profile thousands of candidates each year and the salary guides are great tools for people to make sure they’re being compensated fairly compared to their peers.  The salary guides we publish are a depiction of what individuals are currently making, not necessarily what you can expect to pay them.

I explained to the hiring manager, “A majority of the individuals I represent are not actively looking for jobs, and it’s very possible that the people you want me to target are already making $135K/year. Would you go any higher than that to entice them to make a move?”

Too often I feel clients think recruiters only submit the most expensive candidates in order to get a bigger fee, when in reality we submit the best candidates because that’s what the client wants – the best candidates are just typically the most expensive.

The best thing that recruiters and hiring managers can do to smooth out the process is communicate. Hiring managers need to be open with their salary expectations just as recruiters have to share what they see in the market. If communication stalls or expectations aren’t aligned, nobody wins.

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