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I contacted a recruitment agency in regard to a job position, and the employing company is interested. We will begin the interview process next week. This is the first time I am involved with a recruitment agency, and I am wondering how this is going to affect salary negotiations. In short, is the agency friend or foe?

Of course the agency takes a fee for a successful referral. I see three ways how this could work:

  1. The recruitment agency takes a percentage of the salary that the client pays. In this case employee and agency share the same interest.
  2. The recruitment agency takes a fixed fee for a referral (neutral position)
  3. The recruitment agency will hire me, and contract me to the the client at a higher price. In this case the agency opposes the employee's interest - the lower my salary and the higher the clients, the better for them.

In the normative case, will the agency benefit more if I negotiate a higher salary for myself, or if I negotiate a lower salary, or will it make no difference? The answer may also be conditional based on common scenarios if there is no such thing as a "normal" scenario.

The recruitment agency knows the client well, and has referred previous candidates. My thinking is, that if they share my interests salary-wise, then they could give me valuable guidance for salary negotiation based on their knowledge and experience.

  • Is this for a contract job or full-time employment? Usually, this is mentioned in the job posting. If nothing is mentioned, it's definitely possible that the agency will be subcontracting you out. If it says direct hire or full time position, it's unlikely to happen. – Stephan Branczyk Jan 22 at 10:52
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Whether you take the job or not makes a huge difference to the recruitement agency. They get paid, or they get not paid. The payment may be dependent on the salary, but that is a very minor amount to them. So the motivation of the recruitement agency is to do anything to make the company offer you the job and to make you accept the job.

So if the recruitement agent thinks that the company's offer is less than you want and you might not take the job because of that, they will do two things: They will try to convince the company to increase their offer, and they will try to convince you to reduce your demands. Because both increase they chance that you take the job and the recruitement agency gets paid.

In general, they will try to convince the company that you are a good employee, and convince you that it is a good job. So they are both friend and foe at the same time.

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All in all, the first and foremost target for the recruitment agency is to get you a job, because then they will get their commission. If you don't get (or accept) the job, there's no incentive for them. So they will try to convince both the parties:

  • The applicant: that the job is good, and should accept the payment offered.
  • The organization: that the applicant is a good fit, and should match their expectation

to find a middle ground and secure the job.

With that in mind, let's analyze all the three cases you're thinking of:

1. The recruitment agency takes a percentage of the salary that the client pays. In this case employee and agency share the same interest.

Well, in this case, they will help you to negotiate the best salary possible for you.

2. The recruitment agency takes a fixed fee for a referral (neutral position)

Even in this case, helping you to get the best salary possible is the likely thing, as they have nothing to lose by doing that, but can earn a good name, where you share there reference to others.

3. The recruitment agency will hire me, and contract me to the the client at a higher price. In this case the agency opposes the employee's interest - the lower my salary and the higher the clients, the better for them.

This would be bad, but that's not what a recruiter or a recruitment agency normally does, that's the scope of a contracting firm or staffing agency. However, if the recruitment agency is doing the sub-contracting, you can surely refuse the offer for the current position as a sub-contractor and ask for the openings where you will directly be an employee for the organization. That way, the negotiation would be falling in either of the above two categories, where your interest will be aligned with that of the recruitment agency.

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  • "This would be bad, but that's not what a recruiter does." I agree. That's not what a recruiter does, but yet, that's what some temp agencies and some placement agencies do in the US. – Stephan Branczyk Jan 22 at 10:50
  • @StephanBranczyk Yeah, just modified the wordings to make it clear. – Sourav Ghosh Jan 22 at 10:54
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You asked,

In short, is the agency friend or foe?

Neither - they're more like lawful neutral.

They will generally follow whatever path has the best outcome for them. Sometimes, in a perfect world, that path also has a good outcome for the employer and the candidate. But in other situations, the three parties' objectives may not perfectly align, and some recruiters will take advantage of those situations in whatever way benefits them.

Of course, some (good) recruiters realize that their reputation is at stake, and they may be willing to have an okay outcome from one deal (instead of a great outcome if they had been more selfish) if it means it helps them build a better reputation with clients or candidates. Ultimately, recruiters are just connection-makers. They have no tangible work product. They depend on working with other parties to have an income.

With that in mind, you need to be the one who looks out for your own best interests. Follow standard negotiating technique, and don't allow anyone to pressure you into something that you don't like. When you're interviewing, make sure you take the time to evaluate the employer yourself, instead of just taking the recruiter's word about how they just know deep in their heart that this employer is an awesome once in a lifetime opportunity that's just perfect for you in every way. This cannot be over-emphasized - take the time to prepare your own questions for your potential employer, based on the things that are important to you, and make sure you ask the employer those questions during the interview.

Further, if you're being courted by several recruiters, or a recruiter contacts you out of the blue, you can ask the recruiter some questions to get an idea for how reliable they are:

  • How long have you been working with this employer?
  • How many candidates have you placed with this employer?
  • How flexible is this employer on salary? What is their negotiating process like?
  • Do you know anything about my competition for this position?
  • Can you describe why you think this opportunity would be a good fit for me?

Other than the first two questions, the actual content of the recruiter's answers are somewhat unimportant - again, you should make up your own mind about how good of a fit the company is, and you should be your own advocate when negotiating. But, you can judge the recruiter's relationship with the employer based on how they answer - if they give you a generic answer with a lot of buzzwords, they might not have a good relationship with the employer and might be making things up on the spot. But if they can go into specific detail they might be able to show that they actually know the employer well (which is a good thing, of course).

In short, a recruiter might be friend or foe depending on the circumstances, and their own personal business approach. But, you can put some effort in and do a little research to help you frame up how the relationship will work (or not) for you as a candidate, rather than just blindly proceeding.

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  1. The recruitment agency takes a percentage of the salary that the client pays. In this case employee and agency share the same interest.

No, the potential employee and the recruiting agency may share an interest, but it's not necessarily the same exact interest.

Let's say a competing candidate (without an agency) is willing to work for $100,000 a year. And you (of similar skills and experience) are also willing to work for $100,000 a year.

The agency may do everything to convince you that you're only worth $70,000 since it will still cost the potential employer $100,000 to hire you since the employer will still need to pay the ~$30,000 commission to the agency.

Furthermore, a particular employer usually has multiple vacancies to fill each year. So if an agency is looking to get repeat business, it will usually take the side of the potential employer, not the side of the potential employee.

And finally, the mindset of an agency is also completely different than the mindset of a candidate. The agent is just looking to close the sale quickly, so he can move on to the next one. He cares about little else. The final compensation package does matter to him, but it may not matter as much to him as it does to the candidate.

He just knows that if the process takes too long, the employer will find a better or cheaper candidate (that didn't come through his agency), or that the candidate finds a better or more lucrative position elsewhere (that he didn't find through his agency).

My thinking is, that if they share my interests salary-wise, then they could give me valuable guidance for salary negotiation based on their knowledge and experience.

I would be careful. A recruiter's interest is only partially aligned to your interest.

If you're looking for good advice on salary negotiations.

Read this instead, and this.

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  • This makes no sense - if the candidate not using the agency is hired the agency gets nothing at all so they have a vested interest in you getting the job! Depending on how their compensation structure works they may or may not have an incentive to get you as much money as possible, in my current role the agency negotiated a higher rate than I indicated as they felt I was under selling myself. – Alan Dev Jan 22 at 13:02
  • @AlanDev - in Stephan's defense, it's really hard to compare anecdotal scenarios. Your recruiter may have known something that changed their behavior. Maybe they had an exclusive deal to fill that position (and hence no competition to undercut them on price). Or they knew the employer was going to hire you no matter what, and figured they might as well max out their commission by maxing out the employer's salary bracket. Or anything else we don't know. The point is, the recruiter's best interests don't always align perfectly with the candidate's best interests, in all situations. – dwizum Jan 22 at 16:19
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    @AlanDev, I've toned down my language a little bit. My language was a bit too categorical, but I still believe you can't fully trust 3rd party recruiters. – Stephan Branczyk Jan 22 at 21:47
  • I certainly agree you can't fully trust recruiters and are wise to be sceptical, my point is your interests can sometimes be aligned. In my case they were getting a fixed fee I later discovered so I can only guess their motivation was making sure I was selling myself properly and was happy because they make money every day I was on the assignment. – Alan Dev Jan 23 at 8:10

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