hired by head hunter versus internal HR

[thomas silver]

Hello,

I know some companies have internal HR department and also enlist assistance from head hunter. I was just wondering how the employers normally deal with those hired by their internal HR dept and those hired by head hunters. Do they give higher compensation to those hired by internal HR for the same position as passed-over savings from not using head hunters? Is there some rule about equality in pay that they have to give same compensation for similar positions so that let say there are a number of similar positions opened and if the head hunter already placed a candidate, the internal HR dept cannot hire another with higher salary? Could someone in the know shed some light on this? Thank you

[Rambo Prasad]

There exist a secret nexus between HR's and the job consultants.The head hunter's pay around 50% of whatever they get as kick backs to the HR..Given the vested benefits for a HR you can expect the HR's to be more flexible during salary negotiation when you get recruited via a head hunter rather than via a internal employee referal.

Sometimes even if the internal HR picks a resume directly from a job site.he/she would prefer to send it to a head hunter rather than calling the candidate directly..

[Manish Hatwalne]

Rambo Prasad wrote:There exist a secret nexus between HR's and the job consultants.The head hunter's pay around 50% of whatever they get as kick backs to the HR..Given the vested benefits for a HR you can expect the HR's to be more flexible during salary negotiation when you get recruited via a head hunter rather than via a internal employee referal.

Sometimes even if the internal HR picks a resume directly from a job site.he/she would prefer to send it to a head hunter rather than calling the candidate directly..

I suspected that but I didn't know it was so prevalent. That explains why HR people were persuasive about some of the candidates I interviewed few years ago whereas they were not so keen on few above-average candidates that came through internal references! One more reason for me to hate "typical" HR, they seem to become more & more useless with such nexuses and their own weird prejudices!

BTW, when we are now looking for candidates in our organization, consultants are asking 8.5% charges, is that normal & acceptable? We don't have any HR department as of now, so no such nexus and exchange of money!

[Rambo Prasad]

8.5% is a little too much for the work they are doing..All they do is pull the resume from the job site and make a few phone calls..

Instead I would suggest you to open a account with monster, naukri etc and search for the candidates directly..That would be much better

[Ulf Dittmer]

Such a discussion does not make sense without mentioning the job market being talked about, due to wildly different practices between countries. For example, my experiences are rather different than the one posted by Rambo Prasad, but they don't merit mention here because we don't know which market Thomas is asking about. Let's just say that much of what has been said up to now in this topic is -in its stated generality- flat out wrong.

[Kj Reddy]

Rambo Prasad wrote:There exist a secret nexus between HR's and the job consultants.The head hunter's pay around 50% of whatever they get as kick backs to the HR..Given the vested benefits for a HR you can expect the HR's to be more flexible during salary negotiation when you get recruited via a head hunter rather than via a internal employee referal.

Sometimes even if the internal HR picks a resume directly from a job site.he/she would prefer to send it to a head hunter rather than calling the candidate directly..

I heard this earlier too, I am not sure if this is always true. The HR people may not prefer employee referral scheme at all. My views are based on Indian IT job situation.

[Kj Reddy]

Manish Hatwalne wrote:
BTW, when we are now looking for candidates in our organization, consultants are asking 8.5% charges, is that normal & acceptable? We don't have any HR department as of now, so no such nexus and exchange of money!

Few years back we paid one month salary to the job consultant.

[Manish Hatwalne]

I should also mention that I am referring to Indian job market.
KJ - 1 month sounds equivalent to 8.5% of annual CTC.

[thomas silver]

Sorry for not mentioning it earlier that I was referring to US market. I think I am missing something as I do not understand how the company HR likes to use head hunters even if it receive %50 back from them for landing a candidate, as Rambo Prasad indicated. The company still has to pay the other %50 to the head hunters (on top of paying salary for internal HR), am I right?

[Ulf Dittmer]

I think I am missing something as I do not understand how the company HR likes to use head hunters even if it receive %50 back from them for landing a candidate

As I understand it, the term "kickback" implies something illegal going on here; I don't think there's much of that going on where you work. Common figures for the US and Europe are around 3 months salary being paid to the recruiting agency upon a successful hire (for varying definitions of "successful").

I don't think you'll see substantially different treatment (in regards to salary or otherwise) for hires coming in through agencies or not. But there's no rule about that (as you mentioned in your first post), either. The salary in particular will differ more due to your negotiating skills than to how the company came to know about you. But companies are oftentimes more amenable to allow people more expenses (like technical books, cell phone bills, gasoline bills or public transportation costs) than a higher base salary, since those expenses are tax-deductible for the company.

[Mark Herschberg]

thomas silver wrote:Sorry for not mentioning it earlier that I was referring to US market. I think I am missing something as I do not understand how the company HR likes to use head hunters even if it receive %50 back from them for landing a candidate, as Rambo Prasad indicated. The company still has to pay the other %50 to the head hunters (on top of paying salary for internal HR), am I right?

In the US the standard rate for employees is 25% of base salary. (Caveat: in recessions or overheated markets it can vary from about 15-33%; executive recruiters--and I mean real executives of Fortune 500 type companies, just just people who use the term "executive recruiter" have different standards.) This means the recruiter receives 25% of your annual salary only. If you receive $100k in salary, and a 20% bonus, and lots of stock options, and they paid for some classes and sent you to conferences as part of your contract, the recruiter (or recruiting firm) will receives a fee of $25k.

Now if the recruiter (or firm) does a kickback to the company, it probably violates the employee code of conduct (and certainly is unethical) and would be grounds for dismissal.

Remember that in a large company benefits (SS, medical benefits, 401k matching, overhead) can run 20-30% on top of salary. For a firm, a 25% recruiting fee isn't necessarily that costly.

--Mark