gpmorron@watsol.waterloo.edu (Gary P. Morrison) (02/28/90)
I was not planning to submit this posting to can.jobs, but since headhunters are a hot topic here these days, it may be useful and appropriate. ------------------------------------------------------------------------------- General Information about EMPLOYMENT AGENCIES ============================================= Two months ago I sent out an SOS to ont.jobs about employment agencies (and the PJ Ward agency in particular). I was interested in typical commissions charged by agencies for full-time as well as contract positions. The following posting summerizes the information I received, supplies info from an article called "Selecting a Good Headhunter" and anonymously quotes some of the advice I was given. First, I would like to thank all those people that offered information/opinions/advice. Starting a career is a difficult task and many of your comments helped me make decisions more confidently. Twelve people responded to my original posting offering information, another seven requested this summary of responses. Summary ======= In general, CONTRACT commissions vary between 10-50% of the hourly rate charged to the employer with 30% being about par. Commissions charged for finding FULL-TIME positions vary with the salary of the position; a good heuristic to follow is 1% of the annual salary for each $1000 of that salary, with a ceiling of 30%. A $40,000 job would generate a finders fee of $12,000! Finders fees for full-time positions are paid by the employer. Agencies act as middle-men for contract jobs; the agency buys your time while you work for the employer and sells it to the employer at some premium. As far as PJ Ward is concerned, I did not recieve a single negative response about them in particular, but there were some hostile repsonses about employment agencies in general. A great deal of care must be taken when dealing with employment agencies Employers seem to be willing to pay an additional $10,000+ to an agency in return for not having to train the new employee and to avoid some of the hassles of hiring. It is expected that the employees existing skill set completely fulfills the requirements of the job. Agencies also relieve the employer of the hassles and expense of advertizing, sifting through hundreds of applications, and sometimes not finding an appropriate candidate. Despite this, there seems to be some lingering resentment toward employment agencies - they're considered a necsessary evil. Of all the responses about PJ Ward I received, only one was negative. Contract Positions ================== Smallest % Mentioned: 10% Largest % Mentioned: 50% (!!!) Common percentages charged seem to vary between 25-35%. It is illegal for a third party to "skim" a percentage of income paid to an employee by an employer. To get around this, agencies act as "employers" when filling contract positions. The agency will in effect hire you and sell your services to the "real" employer at some premium. Therefore when it is time for billing, the employee bills the agency, the agency pays the employee at the agreed rate and then the agency bills the real employer at the premium rate. A good agency will pay the contractor in advance before billing the employer, a poor one will not pay the employee until payment has been received from the employer. Note that the fees apply to all income earned while working -- regardless of the length of the contract. Thus the total commission paid to the agency can be enormous. I guess that's how agencies can afford all those huge advertizements in the Toronto Star Career Section! Full-Time Positions =================== Smallest % Mentioned: 15% Largest % Mentioned: 30% The above heuristic (1% for each $1000 of salary with a 30% ceiling) appeared to be representative of responses. It is the employer that pays the agency to find people that have qualifications to fill a position. Thus the headhunter is working for the employer and NOT YOU. PJ Ward ======= In my original posting, I requested information about PJ Ward in particular. A PJ Ward representative replied to my questions via ont.jobs. To summerize that response, PJ Ward charges 25-30% commission on the annual salary for full-time positions (25% if the employer uses PJ Ward exclusively, 30% if other agencies are used besides PJ Ward to recruit people). Note this payment does not come out of the employees salary, it is paid by the employer to the agency once someone has been hired. Similar percentages apply to contract positions. PJ Ward will negotiate a lessening of contract fees up front if the contract is long (>1 year?). I only received one negative comment about PJ Ward. Overall, I think one strike in their business isn't too bad. The negative comment related to their style of headhunting people not wishing to deal with them. The incident happened a couple of years ago. (By headhunting I mean calling someone who is already happy with their existing job and attempting to entice them away to another position.) My representative assured me that headhunting is no longer practiced by PJ Ward. PJ Ward are apparently regarded as one of the more ethical agencies operating in this area. They are positioning themselves at the higher end of the market which means they don't have many positions for recent bachelor level graduates. I was not sure how PJ Ward would react once they discovered I'd turned to The Net for information about their operation. My posting did indeed get me some notoriety within PJ Ward; even their receptionist knew who I was when I called in for an update from them. I figured they would either drop me like a hot potatoe or have me a great job within a week. Luckily for me it was (or ALMOST was more precisely) the latter. I had an interview for a great job very quickly. Unfortunately, the company was looking for someone with a little more experience than I had -- possibly confirming the "high end" comment above. This was the only interview they arranged for me before I found MYSELF a job. The irony: After being a bit hard on PJ Ward/agencies/commissions, I've taken a job in sales (but NOT headhunting!) where the income is based almost entirely upon commission earned. If you can't beat 'em, join 'em. Selecting a Good Headhunter =========================== In the PJ Ward response to my posting, an article entitled "Selecting a Good Headhunter" was mentioned (written by Janet Ruhl and published in the November 6th, 1989 issue of Computer World, page 123). I had the PJ Ward rep send me a copy of the article and I've noted some of the more interesting points it makes below. - high fees in the recruiting business have attracted some incompetent and unethical people into the business. Solution: Get to know your recruiter before agreeing to work with one. - Only use agencies that specialize in the placement of IS professionals. Don't use agencies that offer jobs for "Cobalt programmers" and "DB too" specialists! Check for other ads by the same company seeking secretarial personnel and temporary labour. - Ask the recruiter about his/her experience in IS. How else can they understand and evaluate your credentials? - Be suspicious of recruiters who appear to be pumping you for the names of managers in your current organization, or those that ask for a long list of references. The recruiter should be trying to determine your level of skills and experience during an interview, not building prospect lists. - Be suspicious of recruiters that offer increases in salary alone as the reason for taking a new job, they may not know about other IS benefits and more importantly, IS problems. - Companies pay recruiters to find employees who do not require expensive, time-consuming training. Therefore a recruiter will be unlikely to find you a job that does not feature the same type of work you currently do. It is unlikely a headhunter can get you into a position in a new company that is higher up in the organizational hierarchy than the job you currently have. (Recent university grads are better off finding a job on their own). - Headhunters are not councellors but salespeople. Let them use their powers of persuasion to convince employers to give you an interview, not to encourage you to take a job you do not really want. Quotes and Advice from Responses to my Original Posting ======================================================= "A candidate looking for employment should exercise his/her own contacts extensively first, and give the Headhunter a written list of those companies [already unsuccessfully applied to]. This avoids conflict and embarrasment later [by eliminating duplicate applications]." "All good [agencies] will require nothing from you and alot from your future employer. Use good judgement and don't sign anything except the offer from your new employer. Good luck!" "Headhunters...serve a useful purpose to employers and employees alike... An effective Headhunter can help a company ramp up quickly, as well as strip off a company's staff, if the company is not treating it's staff well." "My advice to you is to worry about getting the rate you want, and forget what the parasites are skimming off ... otherwise, you just get upset." "Let's call a Headhunter a Headhunter. It's the term most 'Placement Consultants' use themselves anyway." "Lead, follow, or get out of the way." "If you want a job immediately the best thing I can suggest is to look through the Careers section of the Toronto Star (Tuesday's, Thursday's and Saturday's). They always have the best jobs outside the consulting agencies, ..." "Want to get rich? Create another alternative to finding good employees." I discovered that someone HAS created an alternative in the U.S., and it can be expanded into Canada. This info appeared in the biz.comp.services news group last September. >A company called LPI Publishing of Los Angeles has announced they are >compliling a catalog of consultants in several different technical fields >to be published in book form. > >The categories include: > - Market Research > - Public Relations/Marketing > - Facilities Planning and Maintenance > - Training > - Hardware (Buying/Selling/Maintenance & Repair etc.) > - Software > - Specific OS Environment Specialists > - Programming Services (Design/Porting/"Special") > - Quality Assurance & Testing > - Documentation > >Further information is available from: > > LPI Publishing -- Mailstop U > 6394 Smoke Tree Avenue > Agoura, CA 91301 > > phone 1 (818) 889-2349 PST/PDT > > email LPI@limbo.intuitive.com (slow: phone preferred) It sounds like it has potential. In conclusion, I hope both employers and employees find the info in this article as helpful as I did. I'd like to see the use of this forum expanded beyond simple job postings into an exchange of information regarding jobs (past problems, current opportunities and future trends). This news group has alot of potential to provide useful information and it is being under-utilized in my opinion. Sorry it took so long for me to get back to you but I've been busy completing one job, starting another and moving from Toronto to Waterloo AND BACK AGAIN in between! - Gary Morrison ___________________________________________________________________________ ! Everton F.C. -- The Pride of Merseyside! ! !_________________________________________________________________________!
gpmorron@watsol.waterloo.edu (Gary P. Morrison) (02/28/90)
In article <21375@watdragon.waterloo.edu> gpmorron@watsol.waterloo.edu (Gary P. Morrison) writes: > >General Information about EMPLOYMENT AGENCIES >============================================= > > ... > >As far as PJ Ward is concerned, I did not recieve a single negative >response about them in particular, ... Oops...I did receive one negative response after writing this, it was mentioned later in the article. - Gary M. ___________________________________________________________________________ ! Everton F.C. -- The Pride of Merseyside! ! !_________________________________________________________________________!
bob@perle.UUCP (Bob Pickles) (03/01/90)
I would like to offer my experiences on letting in
employment agencies into this newsgroup:
1) Agency posting may not be a real job.
2) They may give a general posting to get many
names of people who have certain skills so
they can be ready for when a real job comes in.
3) Posting may be for a job that is already filled
and they want to get your name.
4) Agencies like to compile lists of people and
sell the lists. Just look at your junk mail.
All of the above items has occured to me. I have
dealt with over a dozen agancies and often been
left waiting months for them to respond with any
interviews after reading about jobs in their
newspaper ads.
I would like to suggest that if the net should
decide to let them in to use this newsgroup their
be some rules that they are FORCED to adhere to.
For example all postings must be real jobs or
companies that have positions opened and not
already filled.
The last thing I would like to say is that not
all employment agencies do these things.
--
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