Candidates often let their recruiters lead the negotiation, but that’s about as wise as a cow following a Judas goat. You must learn to lead the negotiation yourself.
If you’re in certain fields, chances are you find jobs through a recruiter. Not only will the recruiter connect you to the job, but she’ll help steer the process and even negotiate your pay. Be very, very careful when it comes to compensation. Do NOT let your recruiter negotiate your compensation. By this I mean, you must own and drive the negotiations yourself (but she can, and should, work as the messenger).
Consider the following scenario. You have a job offer for $100,000. A contingency recruiter is typically paid 25%, or $25,000. But often that fee is split between the actual recruiter and the company employees that recruiter, so the recruiter would make $12,500 in commission. Suppose you wanted $105,000, which is $5,000 more. The additional value to the recruiter is $625 (half of 25% of $5,000). If the recruiter can get the extra money for you (and consequently for her), that’s great. But if she can’t, then she’s looking at $12,500 if you take the job and $0 if you don’t take the job. She really wants you to take the job. She’s more incentivized to get the deal done at any price, than to aim high and risk the deal not working out.
Moreover, she’s not going to be working with you again for a few years (until you’re back on the market), but she will likely be placing more people with the company. She is much more interested in having a good, long-term relationship with them because that will be more profitable to her. Remember as well, the companies are the ones actually paying the fee; they are the customer, you are the product. (This is not unlike social media where the advertisers are the true clients of social media companies, and the social media users like you and I are just the product.)
Think I’m being overly paranoid? Consider a similar field, that of real estate agents. They also get a commission based on sales price. The Freakonomics team did some analysis on this, and found that real estate agents work harder for their own homes than for their clients. They want to close the deal sooner at any price, than to get the best price. (Again, the marginal benefit of a little extra money wasn’t worth the time or risk when they were representing a seller, but when it came to their own houses, and they would keep 100% of the additional price, they did take the risk and put in the effort.) Likewise, your recruiter wants to close the job as fast as possible and get commission, rather than try to get more money for you, and marginally more for her, risking that the deal could not work out. The company may balk at the higher price, or could consider other candidates for the lower price, or even new candidates can show up. It’s even more perilous if you’re asking not for more base, but more bonus, stock options, time off, signing, bonus, or some other aspect. This is because the recruiters commission in many fields is typically based only on the base salary, so there is zero upside for her if you get that, but risk just by asking for it.
What’s even worse is the recruiter has likely had absolutely zero training in negotiations. The next time you work with a recruiter, ask him what classes he’s taken on it, or even books he’s read. (Ask the same of your real estate agent or lawyer.) We expect them to be experts, but many are not.
This isn’t to say you cut them out of the negotiations. They do work quite well as a go-between. In Hollywood, TV actors regularly renegotiate with the show's producers. Sometimes they have to play hardball, and that can be hard to do with someone you’ve been working with collegially and will be doing so with again after the contract is settled. For this reason, their agents do the negotiations. The agent can be the jerk and any tension during the negotiations can be blamed on the agent, not the actor. Absolutely use your recruiter to send the message and have them talk directly to the company. If things get tense, both sides can blame it on the messenger not communicating it well. Also get the recruiter’s advice, especially since she probably knows the market, but you still need to drive the process.
I learned this the hard way when I was applying to a job a number of years ago. The job was listed with a base salary of $100,000 a year; I wanted $120,000 a year but would settle for $110,000. (These are not the actual numbers, but they make the same point.) I expected her to submit me at $120,000 and then have the company try to negotiate me down, likely offering more stock options as they did so. Instead, she submitted me at $100,000. The company was excited to hire me but now I had to go back and tell her that is not what I wanted. The company felt misled, thinking I had agreed to a price and then reneged. Furthermore, I now had to negotiate up, instead of negotiating down. She put me in a bad position. It may have been because she just didn’t know how to negotiate or maybe because she thought I’d just settle for $100,000; either way, she didn’t serve my interests. After that experience I was always explicit with how I wanted the recruiter to express my desired compensation.
(If a recruiter doesn’t follow my directions, I literally fire the recruiter and tell the company the recruiter no longer represents me and does not speak for me. Technically they don’t work for me, they work for the company. But still, I email all parties and make it clear they can negotiate with me directly at that point. The company will still pay the recruiter as per their contract, but the recruiter just won’t be part of the negotiations.)
I suspect most recruiters are well meaning and not malicious. They also typically have zero training in negotiations. (Actually, may have zero training in recruiting in general. I know people hired off the street with no experience who become recruiters, and many recruiting companies that just spam candidates and churn through recruiters thinking high volume compensates for poor quality.) If you’re reading this article, and likely my other articles on negotiation, then you probably already have more training than they do. (I’d also recommend reading the negotiation chapter of The Career Toolkit: Essential Skills for Success That No One Taught You or reading any of the negotiation books recommended at https://www.thecareertoolkitbook.com/resources to get even better at it, since it will pay off handsomely over your career. Just remember, no one is more committed to your career than you, and so you need to own and drive this negotiation.
It’s critical to learn about corporate culture before you accept a job offer but it can be awkward to raise such questions. Learn what to ask and how to ask it to avoid landing yourself in a bad situation.
Investing just a few hours per year will help you focus and advance in your career.
Groups with a high barrier to entry and high trust are often the most valuable groups to join.
