6 Reasons to Use a Career Management Firm Over a Recruiter

6 Reasons to Use a Career Management Firm Over a Recruiter

Professionals of a certain age may remember how jobs were sourced once upon a time. Way back in the Dark Ages, before the internet existed, everyone got hired through newspaper ads, personal referrals, or third-party recruiters. The job market was a shadow of what it is today because once employed, you didn’t move. People were crazy to change jobs if they weren’t forced to.

Today, the job market is a whole different ball game. It’s perfectly acceptable for professionals to change jobs periodically. In fact, employees of some industries are crazy if they don’t change jobs every few years. And now, with the internet and platforms like LinkedIn, job seekers can access opportunities all over the world.

Third-party executive recruiters, sometimes called headhunters, continue to play a role in connecting top-tier talent with employers. But career management firms have emerged as a strong new player in this arena. Their services are meeting a growing need in the employment market as the job market evolves.

The essential difference between the two is this: Whereas recruiters are hired by companies to find candidates that are perfect fits for a role at their organization, career management firms are hired by executives to help them find and land positions that are perfect for them. While executives may think recruiters’ services align with their best interests, that’s not usually the case. Leveraging the services of a career management firm provides a distinct advantage to executives during a career change.

To better explain how, we solicited the perspectives of Dan Resendes, chief consulting officer emeritus at The Barrett Group, a 20-year veteran of the career management industry as well as a former executive recruiter, and Alyssa Powers, senior career consultant at The Barrett Group, also a former recruiter. Here are their thoughts, summarized in six reasons, on why executives should use career management services over recruiters.

1. Recruiters Are Paid to Help Companies, Not Job Seekers

A common misconception among job seekers is that recruiters exist to help them get a job. They do not. Recruiters are paid by an employer to find a perfect fit for a role with a predetermined set of criteria. Their client is the hiring company, not the job seeker. Recruiters will not try to persuade their client to consider job seekers whose experience doesn’t match the acquisition agreement. They can’t afford to. Producing a candidate that is short of anything their client wants puts the recruiter at risk of getting fired.

“Job seekers I dealt with as an executive recruiter were really unhappy because they expected to get service from third-party firms,” said Resendes. “But job seekers are more of an afterthought for recruiters. The focus for recruiters is, first, getting talent acquisition agreements, then finding a perfect candidate match for the agreement. They don’t service individual job seekers. That’s the way the business model works.”

Job seeker frustration with recruiters and a need for personalized support in an unforgiving job market has spurred the development of the career management industry. Its mission is to ascertain what a client wants, assess the obstacles, and assist in achieving the desired goals. The most comprehensive programs provide everything from personality assessments, personal branding, resume building, market access knowledge, interview and negotiation preparation, to onboarding to help clients navigate every aspect of a job search and professional development.

2. Career Management Services Are an Investment in One’s Career

People commonly hire physical trainers to stay fit or financial advisors to optimize their finances. But they don’t always recognize the prudence of investing in professional help when transitioning their careers.

“I see executives lead important initiatives for their organizations, hiring the best talent, training people, buying new tools and software, and investing millions of dollars to make sure that their initiatives are launched perfectly. But then, when it comes to their careers, they wing it. They try to write their own resume and figure out the job market on their own. They don’t think of hiring a career expert. It amazes me and I’ve wondered why?” said Resendes. “It’s like refusing to ask for directions when you’re lost.”

“Sometimes there is a cultural reason. A lot of executives don’t know what they don’t know. But, if you get them to take a step back to think about it, they soon realize how shortsighted it is not to handle their careers with the same tenacity they do in leading projects at work. By not doing so, they are putting at risk their family, their financial security, their reputation, and their legacy of all they’ve accomplished.”

Resendes notes that executives often don’t realize that they’ve outgrown the hiring processes that they relied on earlier in their careers. When professionals are trying to establish themselves in their careers, recruiters aren’t a bad choice. But at the executive level, hiring a career professional can unlock opportunities they couldn’t on their own and see their situation from a fresh perspective.

“I’d like to point out that I’ve been in the career management industry for 20 years, and I’ve personally assisted hundreds of clients to transition careers. I know how to do it,” said Resendes. “But if I wanted to quit and find a new job, I’d engage a career management firm, myself. I would NOT do it on my own. Changing careers is too close and personal. You need help from someone outside your paradigm to enhance whatever you’re trying to do.”

3. Career Management Firms Customize Their Services for the Individual

Professionals looking for any sort of change in their career – a promotion, new title, a new challenge – need to showcase the value they bring to the table to convince employers to hire them. Career management firms are expert in customizing strategies to do just that.

“Some people have rich backgrounds, want a challenge or try different things. They want to be stimulated and grow in their career,” said Powers. “Recruiting doesn’t allow those unique birds to get through. But career management is a good approach that says, hey, it’s not about fitting you into a box; it’s about having a company loving you for you!”

Recruiters, by contrast, are a poor resource for clients who want to do anything different from what they’ve always done.

“If you ever tell an executive recruiter that you want to reinvent yourself, they’ll hang up the phone on you – if not literally, mentally,” said Resendes. “Their clients pay them $30,000-$60,000 to find a perfect fit. So, they can’t just offer up someone who doesn’t have the right title or hasn’t worked in the industry.”

4. Dwindling Market Share of Recruiters

Another reason not to prioritize recruiters is their dwindling market share. A generation ago, recruiters were a go-to resource for career changing executives. But various pressures have shrunk their share of the job market dramatically since then. The rise of LinkedIn’s professional networking platform in the wake of the Great Recession caused the most profound change. The recruiting industry has never recovered.

“LinkedIn threw a nuclear bomb on the recruiter job market,” said Resendes. “When the economy took a dive, LinkedIn took advantage by turning what had been a networking forum into a platform where companies can easily post job ads and search for top talent without having to hire a third-party recruiter. To lower costs, many companies stopped paying third-party recruiters and took their recruiting work in-house. The situation was so bad that a lot of recruiters went out of business.”

Resendes estimates that the third-party recruiter share of the job market has dropped from about 30% in the 1980s to about 10% today.

“Given that recruiters now hold only 10% of the executive job market,” he says, “It doesn’t make sense for job seekers to spend more than 10% of their time on recruiters in their job search.”

5. Career Professionals Drive Proactive Job Searches

Recruiters must wait for job openings before they can place a candidate. Career management firms, however, actively help you seek out opportunities, identify potential employers, and market yourself effectively to land the best roles. They also show you how to leverage the unpublished market, where 75% of executives land jobs. This approach bypasses the gatekeepers in the human resources department and the many competitors you’d face in the published market.

What’s more, in the unpublished market, roles are often not fully defined. They might exist simply as a concept in the minds of employers. It is here that savvy executives have the greatest leverage to mold a role to their own specifications.

“Most clients are part of the creation process of jobs they find in the unpublished market. If a company has an unmet need and sees how much value you offer, they’ll want to bring you onboard. And they’ll be willing to make compromises,” said Powers. “That gives you freedom to shape the responsibilities of the role and ask for things you want, for example, to work remotely or have a different title. Outside the unpublished market, it’s challenging to make special requests because there might be 500 other applicants in the recruiter database who won’t request changes.”

6. Recruiters Are Not Actually Free for Job Seekers

Another common misconception about recruiters is that their services are free for job seekers. In fact, there are costs. They range from financial to opportunity costs. They may not be obvious, but they’re baked into the business model.

Recruiters would argue that they are incentivized to help job candidates negotiate up their compensation. That is true. Recruiting agencies are paid a percentage of an employee’s first year salary – typically 15-35%. So, the higher the candidate’s starting salary, the better for the recruiter. However, their commission comes off the back end of whatever the hiring company has budgeted for that role.

“Many people tell me that recruiters are low-balling them during compensation discussions. That the recruiter doesn’t recognize their value. I tell them it’s not personal. The employer simply has a budget for the position and the recruiter’s commission is cutting into that,” said Powers.

“Let’s say the initial salary base is $120,000 and the commission fee is 20% of that,” Powers continues. “The employer has to set aside $24,000 of that budget to pay the recruiter, which means less money to offer the candidate. When a job candidate doesn’t use a recruiter, however, the entire budget is now fair game during offer negotiations. The Barrett Group coaches clients to ask for bonuses and ways to boost compensation because we won’t take anything off the backend!”

It’s worth noting, says Resendes, that working with a contingency recruiter can sometimes put a candidate at a disadvantage if they are competing with a candidate who isn’t.

“If you have two equally qualified candidates for a position where one is working with a recruiter and the other isn’t, the company might opt for the unattached person. For the company, it’s more financially attractive to hire the person without a recruiter,” said Resendes.

A Tipping Point

There are countless compelling reasons to engage a career management firm. Some clients appreciate the periodic reset and attention to long-term career planning that every professional should undertake. Some value the confidence boost from honing their presentation skills and ensuring they are well-prepared. Many enjoy the ongoing support even after securing a job, which helps them maintain momentum in their professional journey. The reasons are as varied as the clients who use the services.

So, is there a place for third-party recruiters in an executive’s career change?

“If, over the course of your career, you’ve been head of operations, VP of operations, and chief of operations and the next job you want has any of those titles, dealing with recruiters makes sense because they deal with perfect fits only. If, however, you want to do anything other than operations, you don’t stand a chance working with recruiters because that isn’t a recruiter’s business model,” said Resendes.

What is clear is that we’ve passed a tipping point. As the job market continues to evolve, it makes increasingly less sense for talented executives to prioritize recruiters in a career change. Engaging a career management firm is a strategic move, especially if you are not getting the traction in your job search you deserve.

Dan Resendes and Alyssa Powers, both veterans of the career management and the recruiting industries, are passionate advocates for career management. Their passion is fueled not just by their extensive experience, but also by the feedback they receive from clients.

“I wish more people knew about career management because it’s extremely beneficial,” said Powers. “I can’t tell you how many times someone said to me, ‘I wish I could have found The Barrett Group six months ago.’”

In reality, though, for executives ready to elevate their careers, any time is the right time for career management.

Written by Julie Norwell
Julie Norwell is senior writer & content manager at The Barrett Group.
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