One of the first questions a recruiter might ask you is what salary are you targeting. It’s an important topic that can really make a break a position for you, or the recruiter, so how you handle this will make a big impact on your future interactions with that specific recruiter. Negotiating rate is something that involves honesty, on your part, and on the recruiters part. If one or both of the parties approaches the relationship with an un-honest approach, it will severely complicate further relations and the possibility that you can attain a job through this specific recruiter. Keep in mind with this that some recruiters (the uneducated, ill informed, or just plain bad at their job recruiters) may not be completely honest with you to negotiate a salary, but it’s up to you and me to decifer those individuals and not work with them!
Salary negotiation with a recruiter is a complex subject that can have a major impact on your life! I’m sure that’s quite obvious to you, as the benefits of a successful negotiation will show up every two weeks on your paycheck, but the ways to negotiate a salary with a recruiter might not be so obvious. There is a psychology aspect behind the recruiter negotiation and a few factors that we must take into consideration. So let’s get into it below.
The more you make, the more agency recruiters make
Yes, you heard that correctly. The higher salary you receive for a position that a permanent position that a recruiter places you in, the higher commission that recruiter will likely receive. This is because, for permanent positions, recruiting companies bill their clients a percentage of your starting salary (typically 10-25%), which is then payed out in smaller commission rates to the placing recruiter.
A recruiter places you at a salary of $90,000 per year. The recruiting company charges your new employer 20% of your salary. So the recruiting company generates $18,000 in revenue, which the recruiter will then receive commission on.
Or… A recruiter places you at a salary of $100,000 per year. The recruiting company charges your new employer 20% of your salary. So the recruiting company generates $20,000 in revenue, which the recruiter will then receive commission on.
So in the mindset of the recruiter, which position would you rather place someone at? A position that generates $18,000 in revenue or a position that generates $20,000 in revenue. Obvious answer! But, wait…
Your Salary must be competitive in the marketplace
From the topic we previously spoke about, you might think that recruiters would want to get you excessively high salaries to maximize their commission potential and make you more likely to accept a job offer. But that’s a mindset a good recruiter cannot take and neither should you. As a job applicant, you have to keep in mind that their are other candidates that are likely a good fit for the position, coming in at various starting salaries.
If a company can have two equal employees, one at $90,000 or one at $100,000, they’re most likely going to chose the cheaper one every single time. Companies like saving money and if they can receive the same output from an individual for a lesser price, they’re going to do that. So you need to keep that in mind before shooting for an excessively high salary.
Let’s talk about some different ways of negotiating your salary with a recruiter, to maximize the money that you make while still staying competitive in the marketplace and for the position.
Choose a salary you’re comfortable with off the bat
Going through a counter-offer negotiation is a difficult process, trust me, I’ve done it for my consultants on a number of occasions. Sometimes it’s worked to receive a higher salary and sometimes the potential employer has walked away from a job offer with a bad taste in their mouth. It’s a big risk to take, so, like most risks in life, it’s better off minimized or eliminated.
How do you eliminate the risk of a counter-off negotiation? Start the process initially at a salary YOU KNOW YOU’LL BE COMFORTABLE WITH. That way, when the offer comes, there should be a full expectation that you’ll be receiving an offer letter with the salary you requested.
There you have it, a few of the psychological points of reference to keep in mind when you negotiate salary with a recruiter. If you have any questions on how you should handle your negotiation with a recruiter, please don’t hesitate to reach out to me!