The $20,000 Email

I'm a studious reader of sites like ERE.net, SourceCon, TLNT, and RecruitingBlogs. I've read the debate over the demise of agency recruiting. A debate which is filled with emotion, and where sentiments are strong.

Reading the commentary and online debate provides perspective, but to me it's not enough. That's why a recent conversation with a Director of Talent Acquisition [let's call her Jane] stood out. Her story typified the angst employers feel with recruiting agencies. Jane feels like the value recruiting agencies provide is something her organization should be able to do on its own. In her mind it's not typically about the expertise of the agency. More often, it's about sheer volume of effort and a sales transaction.

The conversation was high-level, so I asked Jane to provide more context as to why she feels this way. She detailed how she has been with the company for six months, and that she is evaluating all areas of recruitment. During her evaluation, she has found that one-third of the company's hires have come from agencies over the last year. This amounts to 40 agency hires, and a gold mine for agency recruiters. To the tune of over $800,000 in fees.

During the conversation, Jane's emotion was highest when telling me a story from a chat she had with a new hire that came from a recruiting agency. It was the absolute definition of why employers are frustrated with agency recruiters.

Jane's frustration is driven by "The $20,000 Email".

The $20,000 Email


Like it or not, corporate recruiters view agency recruiters as transactional.

Jane told me she's been asking new hires about their experience being recruited. She asks each of the new hires about their experience so that they can improve the hiring process. She does this across all departments of the company. Her conversation with a recent hire in sales [let's call him Steve] immediately caught her attention.

Steve told Jane that he received a LinkedIn InMail from a recruiter he had not talked to before. The agency recruiter gave high-level details about the opportunity, but Steve had never talked to this recruiter before. This concerned Jane. She decided to dig further.

Jane quickly learned that Steve had little vetting by the agency. The agency recruiter had one conversation with Steve, and did not meet him in-person as part of the process. He also told Jane that, to his knowledge, the agency did not check any references. In fact, they never even asked for his references.

Steve was told that he was going to be "submitted" to the company, and that they expected feedback within a couple of days.

In most cases, agency recruiters base their value on the networks and the influence they have with top candidates. In this case, the perceived value of the agency recruiter was identification of the candidate, the time to write an email, and effort of submitting the candidate.

Search LinkedIn. Send InMail. Conduct quick phone screen. Submit candidate. Stay in touch. Charge $20,000.

That's the narrative running through Jane's mind. Right or wrong, she's one of many Talent Acquisition Directors I talk with who are trying to bring agency spend down.

Obstacles for corporate recruiters

We learned a lot in our recent research for the Top 5 frustrations of corporate recruiters blog piece. Two of the main frustrations we learned about are directly linked to this article: corporate recruiters are managing too many reqs, and their online systems suck. Let's examine.

Corporate recruiters should be selling the company in-person.

Recruiters who are managing an average of 25 open requirements need help. As an experienced recruiter, I estimate that I can effectively "recruit" on 2-3 positions at a time. This includes sourcing, parsing, qualifying, submitting, etc. It's not possible for me to do a quality job from start to finish on more positions than this at a time.

Corporate recruiters have to offset the load, and recruiting agencies are one of the options they have. While there are a handful of corporate recruiters who have a dedicated sourcing team, most do not. Sourcing for 25 open requirements at a time, conducting phone screens, coordinating schedules, etc. is way too much to handle with any level of quality.

The second issue is that most corporate recruiters we talk to don't like their online recruiting systems. This includes the ATS, careers page, email, and various other online tools. The fact that these systems are not efficient adds to the problem. Now the recruiter responsible for all of those reqs wastes time trying to navigate poor systems.

This also impedes the ability to generate inbound leads from the web. Inbound leads which can make the hiring process way more efficient.

The two strikes on corporate recruiters can make utilizing agency recruiters essential to hitting hiring goals.

Finding balance

Great recruiters need to be great salespeople, just in a different context. Just as top sales closers have the best leads funneled to them, top recruiters should do the same.

In-house recruiters need to spend their time selling the company to top candidates. Your best recruiters need to be closers. They should be fully invested in the company, and closely connected with company leadership. This can increase their influence with the top candidates they are working to close.


There's always a lineup at In-n-Out. That's good inbound lead flow.

The lesson to be learned in "The $20,000 Email" is that inbound lead generation is critical. Jane's perception is that she essentially paid $20,000 for a good candidate lead. Her team had to do the rest of the work.

Jane agrees that paying for good candidate leads is the right thing to do. However, she doesn't believe that $20,000 should be spent on sourcing a single candidate for a role they hire for consistently.

The problem most companies experience is that they do not take a systematic approach to sourcing candidates. In-house recruiters struggle to find time for identifying good candidates, connecting with them on a personalized basis, and tracking them for future hiring needs. This creates the $20,000 opportunity for the agency recruiter.

The angst I hear from employers about recruiting agencies is frequent. The question is...is the angst more about the recruiting agency or a product of their frustration with their own recruiting department?

The answer lies in having a balanced approach. Even the best in-house recruiting departments will need the support of agency recruiters for certain searches. They may also need agency support when utilizing contract labor.

The key is to set up an inbound talent lead engine. This can reduce sourcing costs, and allows in-house recruiters to spend more time selling top candidates on the company.

Of course, that's not an easy thing for recruiting leaders like Jane to achieve. But the fact is that in-house recruiting leaders are looking for ways to reduce their agency spend. There's no debate about that.

[From Ongig.com]

Comment by Steve Myers on August 13, 2013 at 2:08pm: Excellent article Jason. This is exactly why Talent Leaders are looking to reduce agency spend. While I'm sure all of the commenters here are top notch recruiters who have deep personal relationships with their candidates, many that I encounter (I'm corporate) work just as you describe: search linkedin, send inmail...charge $20,000. They do not 'stay in touch', offer resignation consulting, or negotiate offers. I do that. In 15 years, I've never had a client who would let an agency anywhere near an offer negotiation.

Whether agency recruiters like it or not, there is a real drive for companies to cut costs, and agency fees are a very visible and large cost which can be easily eliminated with a little effort. Agencies don't do anything that good corporate recruiters don't do. Setting up a sourcing engine is the first thing I do when I join a new client, and it saves the client lots of $$ (over $400K in 9 months on my current contract).

As more companies seek to reduce costs, niche agencies will be the ones left standing. If a company doesn't hire for a certain skillset on a regular basis, there's no need to build a network in that area; best to hire an agency to fill those 1-2 Java Developer positions a year.

Comment by Ellen Clark on August 13, 2013 at 3:03pm: I have been recruiting for 20 years and this subject always comes up regardless whether it is about LinkedIn , voicemail, fax, or whatever new technology is leading to a "perceived" easy find of candidates. Yes I have had some searches where I find a match for a client very quickly( once just a day). But normallyI spend a month or more calling, emailing, interviewing hundreds of people to find the right 3 or 4 candidates to send to my client. I think sometimes if I divided time spent by the hour, I am not making much for long involved searches. Clients have to understand that the easy searches balance the difficult ones they throw us ( when they can't find anyone on their own). Besides, even in the case mentioned above, no one elaborates on how many calls the agency recruiter made before sending that 20k email. I sincerely doubt it was just one. Maybe the recruiter spent many days until he found Steve. We are not paid on the amount of time we spend on a search, but the results of a great candidate. If Tom the recruiter can do this in a week, but it takes Joe a month, then Tom should make more money because he is more efficient or a better sales person. And I agree with the person above who said the terms of what the agency does for a search( interview in person, do references) should be decided before hand. IF the agency does not follow the agreed upon process , then Jane has a bit of a reason to complain.

Comment by Sandra McCartt on August 13, 2013 at 5:58pm: Jane's problem is that she doesn't understand what headhunters do. And she is simply pissed because she thinks we make too much money. Jane needs to spend about six months in a third party recruiting firm then she will shut up and quit thinking that a recruiter who talked to 29 people before they found the one she hired didn't do anything but search, send and bill. If Jane thinks it's that easy then by all means put her team on it and call us when the heat is on because her boss thinks all her team is doing is searching, talking on the phone once and sending dorky candidates to the hiring managers.

Comment by Mitch Sullivan on August 14, 2013 at 5:08am: Jane's problem (as expressed here anyway) would be solved by her selecting one external recruiter per vacancy and giving them complete ownership of that vacancy.

That external recruiter could then reasonably be expected to source via all of the available channels, sell, screen, assess and deliver. Then submit a report on completion of what they did to fill the role.

If Jane wants agency recruiters to fill a vacancy as well as she might do it herself, then she is going to need to give that agency recruiter the tools to be able to do that.

The door swings both ways.

The difference between a retained recruiter and a contingency recruiter is like a plate of ham and eggs. The chicken is involved, but the pig is committed.

Comment by Adam Krueger on August 15, 2013 at 12:11pm: My response was pretty long so I wrote my own blogpost about it - here it is: http://sunrecruiting.com/value-of-a-recruiter/

Comment by pam claughton on August 18, 2013 at 2:02pm: Jane is forgetting or maybe doesn't realize that for every Steve, there are often hundreds of other candidates that are targeted, contacted, assessed and rejected. What she's paying for in addition to finding a great candidate, is the time factor...the time it takes to weed through all the maybe candidates to find the needle in the haystack that is the perfect fit. It's unlikely that the recruiter made one phone call or email and filled the job....though it may appear that way to Jane.

Comment by Barbara Goldman on August 19, 2013 at 6:44pm: Jane needs to stop interrogating candidates about their relationship to the recruiter. This is hostile, and truly unacceptable. Jane is ignorant as to what recruiting really is. Jane needs to use her time interviewing the candidate more wisely, or she is just getting in the way and wasting everyone's time.

Comment by Jason Webster on August 19, 2013 at 6:53pm: @Barbara Interesting comment. Why exactly is it hostile to interview new hires? She's asking a (now) co-worker about their experience being recruited to the company. It sounds like she is trying to not be ignorant, by knowing how her company is perceived by candidates. What methods do you suggest she takes to get this info that are not hostile?