LPM Staff

Headhunters: rip-off or payoff?

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In September, the unemployment rate in Arizona was at 9.1 percent, just below the national rate of 9.8, which has since risen to 10.2 percent – the highest it’s been since April 1983 – according to the U.S. Bureau of Labor statistics. Unemployment among Hispanics in the U.S. held steady over the last few months at 13.1 percent, significantly higher than the overall national rate.

With joblessness at a record high, employment websites are busier than ever, as are the thousands of employment agencies scattered across the state (more than 750,000 locations pop up on the Internet). Agencies run the gamut of providing job placement in a variety of industries at all levels or concentrate on an executive-level niche in the job market. Some offer permanent, temp, or temp-to-hire services, or all three, like AppleOne or Renaissance Personnel Group in Scottsdale. Other employment firms focus on a certain sector and/or region, like Marks & Cobb Legal Search, which specializes in placing attorneys, paralegals and legal support staff in Las Vegas and the Southwest.

Privately owned employment agencies far outnumber the nonprofit agencies, but it’s good to know they’re out there. Arizonans can look for jobs or employees via the Department of Commerce’s Arizona Workforce Connection, or by county at Maricopa Workforce Connection. The City of Phoenix offers employment services through Phoenix Workforce Connection (PWC), a nonprofit that works with job seekers as well as for-profit businesses at no cost to either.

Headhunters, placement agencies, temp agencies – what’s the difference between them all? Do you really need a headhunter?

If you’re looking for a job in sales and marketing at a medium-sized business, a headhunter is likely overkill, but a placement agency could be helpful. And just as recruiters look for the best match for employers and employees, we suggest you look for the best employment service match for you. Before you hit the pavement looking for a recruiter – a nicer term than “headhunter” – learn the difference between a placement, temp, and recruitment agency to make sure you’re searching out the service best suited for your employment needs.

Placement agencies do just that: place permanent employees. A good one will take time to get to know you and not assume your skills and experience based on your last job title. Esther Atempa, site supervisor of Phoenix Workforce Connection says, “You should look for an agency that will take the time to assess all your skills, experience and education; these skills could match a job in another field you had no idea existed.” Many agencies offer candidates help with their résumés and how to conduct a job interview. Placement agencies are generally paid by the companies looking to fill positions, not the candidates looking to be placed. Clarify up front if you are expected to pay a fee for their services.

Temporary staffing agencies provide employees to companies on a contract basis and for a limited period, usually to supplement the existing workforce. Temporary employment may cover employee absences, skill shortages, or seasonal workloads. Temporary staff is employed and paid by the temp agency itself, and contracted out to a client for a prearranged fee or an agreed hourly wage. Some companies choose to use temporary workers full time rather than employ permanent staff, who typically would receive greater salaries and benefits. To make up for this, some temp agencies actually offer benefits to workers who qualify. Before registering with a temp agency, see what they offer you, and conduct a little research yourself on the current average pay for the job you’re seeking to make sure you’re being offered a fair wage.

Recruitment agencies, or headhunters, vary in their services, but know this: Recruiters get paid by the client/employer, not by you, the candidate. Recruiting firms do either “retained” or “delimited” searches for a senior executive position that typically pays more than $100,000 a year. Firms that do retainer searches are paid an upfront fee, which equals one-third of 33 percent of the annual compensation of the recruited executive, with the rest paid out later. Retained recruiters are generally involved from start to finish with the employment process. Recruiters who do a “delimited” search also get paid an upfront fee, but it’s refundable if he or she doesn’t find a suitable candidate within a certain time frame. If the delimited recruiter does find a good candidate, the final placement fee of 30 to 35 percent of the candidate’s compensation is paid, minus the upfront fee.

Employers hire recruiters because the process is more efficient, plus they have broader access to potential candidates. Headhunters may specialize in a particular industry or type of employee, such as medical specialists or senior-level executives; some focus on a geographical region or recruit worldwide. If your job skills are more specialized, you may want to go with a recruiter with experience or knowledge of the specific geographic market and specific industry for you. Make sure the recruiter has your best interests at heart. A good recruiter will strive for a win-win situation for both the client and the candidate, and will keep in mind other good companies and not pigeonhole his candidates. Jared Marks, managing director of law firm mergers and attorney placement at Marks & Cobb, advises, “Make sure the recruiter directly involved with your hiring process is experienced. Just because the agency has a good reputation, doesn’t mean the recruiter has the same level of experience. The key is to get someone who knows the market, so don’t hesitate to ask for credentials.” Esther Atempa adds, “A good recruiter should [also] be knowledgeable about current and future hiring trends, and job growth.” Also beware of a recruiter who doesn’t ask permission to send your résumé out. A good recruiter will respect your choices and your privacy. If a headhunter has papered companies with your résumé, the company you apply with could be obligated to pay the headhunter a commission if the company signed a “contingency agreement.”

As the unemployment rate goes up, employment agencies are being sought out more than ever. It’s up to you to determine if you really need the help of an agency to find a job. If you decide to look into a nonprofit like Phoenix Workforce Connection, keep in mind that demand for their services are higher than ever, so it may take awhile to get an appointment to speak with a career advisor. You can always seek out private employment agencies; just take time to find the right one for you. And if you choose to be your own recruiter, garner job-market savvy so you can align your skills and experience with the ideal profession for you.

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