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I find this topic truly fascinating and the purpose of this is absolutely not to criticise other recruiters (many in this market are genuinely brilliant), job-seekers or strategies in seeking a new role but to simply lift the curtain on how things work from someone who often sits between two negotiating parties.
I had recently seen an article that takes the standpoint that salary information is private and is not to be shared with anyone (heavens forbid, a recruiter!) It is rare, but someone might withhold their salary information or provide a 'salary bracket' to be vague as to the specific nature of their earnings and this is usually for one of two reasons: 1) that they would not want their salary 'capped' by the company if they were to be successful in securing a new role or 2) They simply do not trust the recruiter that they are dealing with.
Let me deal with point 1 first. When a company recruits an individual, they would want to do this on the most sensible budget possible and therefore I understand the initial concern that job-seekers have on this topic. However, companies also have to balance this with long-term staff retention, motivating their employees and battling an increasingly competitive market which is full of companies that are also looking for excellent employees. Technology is making finding a new role ever easier and many companies are aware of this.
Companies that offer a 5% uplift in salary on the basis that you are already underpaid in comparison to the market rate, and that you will accept their offer on this basis, will always struggle to develop talent within their business and probably not somewhere you will want to consider working for your long-term career development. Moreover, the sheer cost of investment for a business hiring someone is rather large (training, equipment, recruitment fees, visa if needed), and therefore ensuring an employee's compensation is accurate is especially important, so much so that many companies have whole units of people that looking to understand compensation and benefits on behalf of its employees!
Trusting your recruiter
Now on to point 2 - trusting your recruiter. Like most, I have heard about a number of worrying stories in the market and understand that people have had to navigate challenging circumstances. I have also heard the famed line used: 'it is in my best interests to get you the highest possible salary because the more you earn, the more I earn'. As soon as I hear this line my mind wanders straight to Danny DeVito selling cars in Matilda.
Very few actually go on to explain exactly how our fees actually work. In short, before a process begins, we negotiate a set fee, or fee percentage of the new employees first-year salary/total compensation with our clients. This will be paid on the completion of a successful instruction, e.g. you securing a new role with them. Our clients will then pay us this fee, after an agreed amount of time, once you join the business and are settling in.
The reason I hate that quote in the above paragraph is that it is simply not true. Yes, in theory, someone could hold their client ransom at the end of a process for the highest possible salary for you. This salary could break all salary bands that exist in the market but I'd be willing to bet that would be the first and last time that person would work with that client! Let's not forget that if that is the case, you will also have no salary uplifts for a couple of years until you come back in line with your peers in the market.
What is really in our best interests is to ensure your interests are balanced delicately with our clients. This would probably mean that your salary is in the upper percentiles in terms of the market rate. That way you will feel valued by the business you are joining, motivated to improve and safe in the knowledge that you will still have room to be rewarded for your hard work and professional progression. You will be happy long-term working for the business and long-term we will maintain a strong relationship with both you and our client.
Our team acts as a preferred supplier for a vast number of private equity and venture capital funds. We’re regularly requested to provide clients with market salary rates and it’s the trust from our clients that ensures we’re best placed to help secure you the job you want with the best salary possible, under any circumstances.
Article written by Liam Digan, Private Equity and Venture Capital Recruiter at Cobalt Recruitment
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