New York City is a lively place. Part of the heart of New York is the financial business. Stocks and bonds, mortgages and loans, mergers and acquisitions, yada yada yada...money investing in money. Professionals such as MBA's, Accountants, and Financial Analysts have been flocking to jobs on Wall Street to support the enormous and complicated financial system that runs our economy. With the invention of computers and the propagation of huge electronic networks, there has been a tremendous demand for the information technologist. That's right: the developer, the programmer, the techno-geek. And with the demand for increased transaction flow, the programmer himself is also in demand. Recruiters from all over the city (and even outside the city) are on the hunt for qualified people who can make these infrastructures come to life so that the traders, brokers, salesman, actuaries, accountants, analysts, and wall street money movers can reap great profits through the power of technology. The savvy recruiter is a salesman, a negotiator, and alas, also a shark, so if you don't want to get bitten you may want to read on.
What the Recruiter Wants
Most recruiters paint themselves as altruistic angels who take you under their wing, devote themselves to you, and place you in the perfect job where they've negotiated the best possible salary on your behalf. In truth, it's rarely like that. To most recruiters, you are a tasty piece of meat. The more marketable you are, the more tasty a morsel you are. The veteran recruiter will hunt you down, place you in a job, and take a big bite out of your salary (or rate), then spit you out into the job hoping never to hear from you again. If you are a consultant, the recruiter will negotiate on both sides of the fence. They will negotiate with the prospective employer on the rate, and they will also negotiate with you. Their ultimate goal is to get as much from the employer and pay you as little as possible. The discrepancy between what is obtained from the employer and what is actually paid to the consultant is known as the spread. The spread is what puts food on the table for the recruiter. In the case of obtaining a full time salaried employee, the recruiter gets a percentage of the salary. In this case the recruiter will negotiate with the employer to get you as much as possible. In some cases the recruiter will bill you out to the client as a consultant and pay you a full time salary. This can be very lucrative for the recruiter, although the recruiter often has to offer benefits, such as health insurance, vacation, and H1 Visas in order to go this route.
Initially the recruiter will hunt you down like a dog. Often a recruiter will go to resume sources such as Dice or Monster and look for certain resume attributes that match jobs they have to fill. Once they get in touch with you,--if they are any good--they will act extremely friendly, attempt to ascertain your situation, and then move in for the kill. If you are currently unemployed, they will try to determine if you are worthy candidate for the employer they are representing. If you are employed, they may try to woo you away from your job with the promise of money, benefits and technical challenges. Either way, it's a facade, so don't fall for it. You are still a big piece of meat. They just need to determine if you are cube steak or filet mignon.
The truth is most recruiters are technical enough to tie their shoe laces, but that's as far as it goes. They aren't going to know anything about what you do. Often they will ask you something like "Do you know C#". Then you'll ask them as a joke, "Are you sure you don't mean C-Flat?" and they will take you very seriously. Their only goal is to match a with b successfully. I often think to myself that someone technical doing the recruiting would be much more successful, because they would understand whether someone was well suited for a job or not, but that's not how the world of recruiting works. After all, most technical people go into technical jobs and not recruiting. There are a few firms in NY that have extremely technical people recruiting, but these firms are more like companies that send their consultants together out on high fee projects in an organized fashioned and pay them as full time employees. Most recruiting firms don't provide a team of individuals to solve a problem. Once they place you, the deal is done, and they wash their hands of you, except to handle your billing.
If they have a requirement to fill, most recruiters will start the negotiating process in an e-mail before they've had any communication with you. They will dangle some bait such as a salary or a rate range that will entice you to starting a dialog with them. Often they will fully describe the jobs and perks as well. They will ask for a recent copy of your resume, and if they have any interest in you, they will call you immediately(and perhaps often). The recruiter's job is to get as many potential candidates in front of the employer as they can. NY employers can be very picky, so the recruiter needs to provide a few strong matches to the employer, or the employer will move on to the next recruiter.
When recruiters contact you, they will discuss the job and gauge your interest. Even if you don't seem interested, they may push hard to get you to interview if they feel you are a good match. Often they will discuss salary or rate at the beginning of the conversation. If they are good negotiators, they will ask you first what salary or rate you are interested in accepting.
Rule 1: Always let the recruiter suggest the rate and /or salary. It may be a lot higher than you expected.
If you are negotiating a consulting rate, a recruiter will often try to knock you down to get a larger spread. One question that is commonly asked is, "Are you flexible on the rate?" or "What is your bottom line?"
Rule 2: Always answer no to this question, once you've decided on a rate. There is no reason for you to give the recruiter more than he deserves.
How do I know how much to negotiate for?
This is a question many consultants struggle with. The question you want to ask yourself is, "What is the market rate/salary?" This can often be found by checking out salary surveys or by interviewing with several companies to get a feel for the going rate. Unfortunately rates and salaries vary greatly depending upon the financial position. The important thing is to settle on a rate or salary that makes you comfortable. As you will see later in the article, you can always go back and renegotiate the terms. The recruiter will try to earn as large a spread as possible on a consulting rate. Recruiters will tell you that this spread should be somewhere around 20%-30%. As a consultant, you should realize that this is a big myth and that you should negotiate well to get the smallest spread you can. A recruiter will be perfectly happy taking 5% if the alternative is 0%.
A Shark's Tale
A friend of mine, (let's call him George) was hired by a recruiter as a consultant making about $70/hr. He worked merrily along for a year, and later wanted to negotiate for more money. He asked for an additional $15/hr to bring it to $85/hr. The recruiting firm promised him the increase, but delayed on actually paying it to him. George managed to get a hold of payroll and found out the recruiter was billing him out at $125/hr to the employer. This means the recruiter was taking about $55/hr (a spread of about 44%). Of course George was furious because of the ridiculous spread and demanded they pay him $100/hr. The recruiter went back to the employer and asked them for more money in order to increase the consultant's fee. The final numbers have not yet been resolved, but the recruiter's games have been exposed, so my friend will now see a much larger chunk of the money.
You might be saying to yourself, $70/hr is not bad, so why is George complaining? George was not so upset about the rate; he was angrier about being taken advantage of by the recruiting firm.
The beauty about dealing with recruiters is that you can always renegotiate the terms if you are not happy. The truth is that most programmers are afraid to renegotiate. Why? Because most programmers are not businessmen. They are very comfortable around the computer, but very uncomfortable around confrontational negotiations. Recruiters bank on this fact. They don't want to renegotiate because it means giving up more of their spread to the employer. On the other hand, they may be happy to renegotiate for you if they feel they can squeeze some more money out of the employer. As a consultant there are a few things you can do to aid you in your task:
1. Ask your employer how much you are being billed out for. There is no law protecting this information. If the manager feels uncomfortable giving it to you, then:
2. Go to payroll and ask them how much the company is billing you for. If they are friendly enough in this department, they will tell you. After all, you are a consultant hired by the recruiter. You may have a right to know how much the company has to spend to keep you.
3. Go on an interview or two. This will give you leverage in negotiating with your employer. If your employer likes you and you are valuable to the company, they will try to keep you. (Especially if you have entrenched yourself in the infrastructure with some complex application that the businessmen have grown to depend upon).
Whether you are seeking full time employment or looking to be a financial developer, if you want to find the available C# and .NET jobs in Manhattan, you often need to deal with a recruiter. If you are careful, a recruiter can be a useful tool in getting a job that suits your interest and your financial comfort level, however, if you are not careful, you can get eaten alive.
If you are interested in .NET jobs in and around the city, you can email or submit resumes to us here on C# Corner and we will try to get your resume in the right hands.