Asking 3rd-party recruiters about their cut

Question

My understanding is that a company might use a recruiter because their in-house talent scouts have had trouble finding good candidates. Because they're using a service, there is an extra cost. However, rather than employers incurring that extra cost, I feel like the recruiters are passing that off to me, by putting me in at a lower rate. And, that seems dishonest.

There are two placement models here. One is for full-time, salaried placements, and the other is for contract, hourly placements. For salary, the salary offered comes directly from the company. For hourly placements, the paycheck comes from the staffing agency. Typically the rate offered through a recruiting company is less than what that person would ask for if they dealt directly with the company.

Is it unprofessional to ask recruiters what their cut is, or what the total cost is that they're submitting me at?

Answer 1

Is it unprofessional to ask recruiters what their cut is, or what the total cost is that they're submitting me at?

Yes, because it's no business of yours. Your belief that recruiters are somehow passing the cost of their services off to you is simply wrong. You also have the wrong idea about how recruiter fees actually work. While there are many models, typically they are paid a one-time signing fee. Your yearly salary doesn't factor into their "cut" except that it usually determines how high their fee is. Often I see the fee represented as "X months of the hired person's salary." I assume that's based off an initially determine salary range and not the final negotiations, but if it is, it's actually in your recruiter's best interest to get you as high of a salary as he can.

Don't ask for this information. You'll come across as unprofessional, out-of-touch with workplace norms and, quite simply, rude. If you even hint at your reason for asking, you'll be considered strangely paranoid.

Besides, even if you got that information, how would that help you to confirm your suspicions? If you really want to know how this works, politely ask this neutral question that doesn't inquire about someone's finances instead:

Could you tell me how your fees typically work?

Any recruiter will be happy to explain the basics to you. I imagine it's a question they get regularly.

Answer 2

Well, you can always ask for anything you want. Don't expect an answer on this one, though. I don't think it's particularly unprofessional to ask, though it would demonstrate a level of inexperience on your part - everyone who's been around even a little has a general idea of what recruiters charge or bill at, relative to what their placements make.

For what it's worth, you also have how this works backwards. Recruiters for permanent placement take a percentage cut of the salary their placement makes, and/or get a set placement fee, which is also (usually) based on the placement's salary. For contract work, recruiters generally bill a rate determined on the position, and pay the contractor less than that. It's highly unlikely you're being put in at a lower rate, because that would be money out of the recruiter's pocket, for no good reason.

It's possible you didn't negotiate a high enough rate for yourself with the recruiter, but that's on you, and has nothing to do with the relationship or billing between the recruiter and the client company. There's also usually a pretty standard rate for what you do that doesn't deviate much, though... recruiters generally make their money through volume, rather custom-tailored matches, so they generally don't negotiate a lot with potential placements.

The rate is the rate; take it, or we'll offer it to someone else who will.

Answer 3

Is it unprofessional to ask recruiters what their cut is, or what the total cost is that they're submitting me at?

Not at all.

If you choose to work with a middleman (3rd party recruiter), then you can feel free to ask how much they are charging the company. Since you know how much you'll be getting, it will be simple to to calculate their cut. I've done this myself recently.

In my experience, most recruiters will give you this information if you ask for it. And if they don't, you can decide to walk away from the job if you prefer.

If you feel that the recruiter is getting paid too much for their efforts, or if you feel that you aren't being paid enough (for whatever reason), you can always make a counter-offer, or simply walk away.

Recruiters earn their pay by finding and vetting candidates, so that the company doesn't have to. Many companies feel this is money well spent. And they find jobs for you that you would otherwise not have found on your own. Many potential employees find that going through such a recruiter is worthwhile.

If you would rather avoid the middleman, you can. Simply search for jobs on your own - through your own professional network, internet searches, or by walking around looking for Help Wanted signs. You can charge whatever rate you can get a company to agree to, without the need to pay any 3rd-party recruiter overhead. It may get you more pay, or it may not. It may take you longer to find a job (sometimes a lot longer).

It's your choice.

Answer 4

There is no substitute for knowing your own value.

You're assuming your low-ball salary has something to do with his cut. In all likelihood, he's getting a percentage, and gets more when you get more. Not always, but it's beside the point.

You are being placed in at a low rate because (a) it makes the recruiter look good to the company, because he finds A-level talent a B-level prices, and (b) he's likely to close the deal quickly. He's also probably told the company to expect to pay more than average, so when you come in low, you look like a steal, and you're working asap. This is a sales job. You are a product. If I can get a 10% commission on phones regardless of the price, I'd be selling iPhones for $20. Sure, I make very little per phone, but I'd be selling 100x more phones, and I'd come out way ahead.

There is no substitute for knowing your own value.

Answer 5

Sure you can ask the recruiter whatever you want. They only get paid if you take the job. You have a right to know how a transaction involving you is taking place - this is not the company buying deli meat.

Will the recruiter get upset? Maybe. If you are worried about this, then don't ask.

But you have every right to ask and in my opinion every right to know.

If you find some intel on how the deal went down and they are outside of industry norms you may have more bargaining power. I for one have noticed that people who I interview through a recruiter are much more likely to negotiate their salary more.

The recruiter's equation is he gets a percentage of your salary or a flat rate. If you want too much company may lower percentage or may just not hire you. If you come in under he could make more. How much the recruiter works with you is directly related to their ability to find another person with little/no work.

Also if the recruiter knows how much you are going to make you are privy to the same info. Total nonsense if anyone tells you different.