The dirty secrets of the IT Staffing industry

Read Time:12 Minute, 57 Second

In 2013 during a relative low point of both my life and career, I got a job that I had no idea would alter the course of my entire life. It was an entry-level recruiting role paying $13 an hour with paltry benefits at a now-defunct IT Staffing firm in a small, nothing town in Maryland.

I know many tech people hate recruiters, and if you are one of them, I will tell you the exact people you hate most are the kind created by this type of staffing agency.

I was inspired to write this post after hearing a junior developer lament the unpredictable and confusing behavior of recruiters hounding her, then going silent. For anyone else new to the industry who may not be familiar with how these shops work, I’d like to pull back the curtain on how (some, many) IT staffing firms work and why I avoid them.

The basics

Some of you may know this, but it is worth spelling out why staffing agencies exist and how they function. I’m going to be pretty critical in this post, so it may surprise you that I don’t think all staffing agencies are necessarily evil or that they don’t have a purpose.

Some of the things I will criticize about staffing agencies are also more accurately laid at the feet of the companies that use staffing agencies to keep a perpetual underclass of lesser-paid contractors alongside their cushy salaried workers (looking at you FAANG). Staffing agencies react to what their customers profess to want, so in some ways their behavior is just a reflection of the state of the IT industry at large.

But let’s back up and take a 10000 foot view for a minute.

In the most simple terms possible, staffing agencies exist to complement traditional in-house recruiters. If a business’s own recruiting department is understaffed, sometimes they’ll need help finding and vetting candidates and in theory a staffing agency is a great way to fill these fluid hiring demands. A company may not want to keep 10 in-house recruiters on staff if their demand is seasonal and half of them wouldn’t have much work in non-peak season. Using that logic, it makes sense to partner with a staffing firm who can handle the more fluid and unpredictable surges in demand that a business may encounter in their hiring.

In some cases, hiring IT talent is so hard that companies have indefinite agreements to work with a staffing agency. Again, on paper, it makes sense. An in-house recruiter may have to cover roles from HR, accounting, engineering, marketing, on and on. If you use an IT staffing firm where all the recruiters specialize in tech talent, you ought to get better results, right? (Often no, but more on that later).

In general, staffing agencies invest a lot of up-front work into calling candidates, vetting them, and then getting resumes to the business to review. The staffing agency will coach the candidate and confirm their interviews, and if the candidate does well they typically will be hired as a contractor under the staffing firm and receive any benefits the staffing firm offers.

Usually, this work is structured as a contract or contract to hire vs permanent opportunity. Staffing agencies generally make their money in “billable hours”, where they charge a surplus on top of whatever hourly rate the hired worker earns that goes to the staffing agency. It is sometimes called the burden rate, the formula to determine how much the staffing agency has to charge on top of the hourly rate going back to the worker for that placement to be profitable to the staffing company.

Adding a middleman between employee <> employer and giving someone else a cut of the budget for a certain job can have the effect of depressing the wages the worker/contractor receives. If you’ve ever noticed spammy recruiters talking about contract work at abysmal rates, eyyo. That’s how that happens.

Beyond the basics: System integrators

It will sound ridiculous to say this, but on top of contract workers losing out on some wages because of the staffing agency middleman, there is often a SECOND middleman in the mix. If you have seen jobs from KForce, TEKsystems, Robert Half, etc etc – in general all the big guys like that as well as smaller staffing firms partner with something called System Integrators.

The hugely popular one I dealt with in my staffing job was called Atos, and their volume of business in the US was enormous. They covered Coca-Cola, Siemens (Atos used to be Siemens IT Services if I remember correctly), Nike, JP Morgan Chase, on and on. I have limited insight since I got out of agency recruiting as soon as I could, but they may be the big dog of all system integrators in the US, they seemed that large.

How the flow of activity worked at my staffing agency (and many others) was that we actually did not deal directly with any company and instead were one of many dogs waiting for table scraps from Atos. Atos would receive a ‘req’ for the various businesses they served (Coca Cola, Nike) and redistribute those out to numerous staffing agencies simultaneously.

If you have ever annoyingly gotten four different voicemails from recruiters for what sounds like the same job, guess what! It probably was. Recruiters would mad dash to call all the best candidates after receiving a req, since only the first company to submit a certain candidate could get credit for them. Atos would also give us a slap on the wrist if we ever accidentally submitted someone another agency had already sent. Sometimes candidates would get so inundated with recruiter phone calls that they’d legitimately not be able to keep track of what they were submitted for. Some agencies try to scare candidates by saying if they don’t reveal if they were already submitted they will get put on a do not hire blocklist. In my experience, that is entirely made up and was not something I ever saw done. Maybe it happens elsewhere, but I never saw it. Candidates are the staffing agency’s meal ticket, so you can see why they wouldn’t want to “bite the hand that feeds”, blocklist someone and miss out on future earnings.

The last thing I’ll say about Atos that leaves me with a very bad taste in my mouth about them is that the quality of their job descriptions was absolutely laughable. They were so bad that people would cuss me out for sending them something so useless. I remember it so vividly I was able to find what I’m confident is an Atos-related listing in about a second by searching “IT Support Specialist hardware software peripherals”. I got this gem of a job listing:

Its a thumbs down, from me, on Atos.

Other foolishness within the agency day-to-day

Moving away from Atos and back to life in the staffing agency, there are a number of things that I think result in the relatively poor candidate experience we see with agencies.

Early into this role I asked my boss how to handle it when IT guys would be angry that I sent them our Atos job description that was little more than two lines about “support computer hardware, software and peripherals. Troubleshoot and debug end user issues”. My boss confidently told me that it wasn’t important, that our job was just sales. 90% of people were going to tell you to go to hell and that it just is what it is.

I (of course) ignored him and set about learning more about technology so I could be a better recruiter.

Other troubling things we were asked or forced to do included using a massive, primitive web scraping resume harvesting service called JobDiva. We could set up harvesting jobs to run overnight using various keywords and search terms. When asked what to search, my boss told me hardware AND software. I later went on to be certified in advanced boolean techniques but even without that background yet, it was obvious to me that those search terms were childishly inadequate.

Job Diva would dutifully send “email merges” to the million, jillion, trillion people identified each night unlucky enough to have the words hardware and software in their resume, and each morning myself and the other recruiters would sift through the mountain of angry emails about how off base our outreach efforts were.

Staffing agencies also have some of the most inane, useless metrics of any type of business I’ve ever seen. Recruiters are commonly judged on metrics for number of phone calls placed, number of candidates submitted, in addition to more meaningful metrics like number of interviews per week, time to fill a role, and number of placements made within a month. My staffing agency didn’t have this but some have “lunch quotas”, where recruiters have goals to take out a certain amount of candidates for lunch each month. A lot of it is utter nonsense.

The incentives are aligned in such a way that you are so busy you can’t follow up with candidates. The focus on placements means that staffing agency recruiters are really not incentivized to spend their time doing things like, updating candidates who weren’t hired. The submittal metrics daily meant that we’d take half-qualified candidates and lob them over the fence just to hit our numbers, a waste of time for everyone involved. Alternately, we would have to edit and heavily wordsmith resumes for people, disguising gaps between jobs, generalizing titles, making people add keywords lest Atos reject the submission as “not qualified”.

All in all, I would describe staffing as a vehicle of enormous churn. Sure, it can generate a bunch of resumes for a company but when I think about all the waste involved in the process, it is hard to see it as a good investment.

Other miscellaneous bad behavior

I know I’ve said a lot at this point bad about agencies, and I know there are some out there that are more boutique and don’t do the things I describe. But for me honestly, it was clear very quickly that staffing was not the place for me. I was critiqued for caring too much about the technology, spending too much time doing research, spending too much time on the phone with each candidate. Basically, acting like a human being who cared about my job.

The prevailing attitude was definitely in the vein of “it’s all just sales, these people are all just numbers. Keep it brief and focus on throwing bodies at Atos”. Although I generally met my metrics and wasn’t under-performing, I was an office oddity for caring about candidate experience and trying to learn the technology to do better for the people I talked to.

There ARE some things from this time that I am glad to have learned.

Seeing how agencies work was enough for me to steer clear of them, for starters. I saw that agency recruiters had no pull or influence to get an excellent but slightly nontraditional candidate anywhere, so I realized me, without a degree was never going to have success getting jobs through staffing firms.

I do stand by some of the resume edits I learned there, dropping months off resumes to disguise any gaps (you don’t need to know that I took a month of funemployment in 2021 because I felt burnt out, Random Hiring Manager). Genericizing my title is something I’ve done and will continue to do if it serves me. But other than that?

I left staffing as soon as I could, and entered the world of boutique, white-glove internal recruiting. I know a lot of y’all hate recruiters and have only encountered ones that are more of the staffing agency caliber, but I was different. My candidates used to compliment me with astonishment on how much technology I knew. I had printouts all over my office like an FBI agent on a manhunt except it was cross diagrams of programming languages and network engineering terms. I took tech certs, I started coding in my free time, I got certified in advanced boolean searches so I could find people more effectively, I wanted to be as surgical as a scalpel.

Aaaaaand here I find myself, almost ten years since my stint in staffing, as a Senior Software Engineer. My quest to be a better recruiter took me too far over to the dark side, it seems. C’est la vie.

Filtering out the noise

If you didn’t already do this, it is possible to largely live out your tech career ignoring staffing agencies. I use a separate email while jobhunting and dutifully unsubscribe from all of the staffing agencies who find me. Their emails are normally:

  • contract for a client who won’t be named (Atos won’t allow it)
  • extremely generic description
  • pay, if listed, is bad
  • despite offering little to no info, recruiter asks for your resume and has a heavy bias towards getting you on the phone
  • (potentially) you get a string of similar emails at one time that all have identical bodies as all the various staffing firms scurry to submit people first

If you are a somewhat traditional candidate and for whatever reason in a tough spot and need a job, no judgment of course if you take a contract through companies like these.

If you have a LESS traditional background, I will tell you that your odds of getting anything meaningful from a staffing agency encounter are very low.

If you are a person who gets one of these jobs, I would also focus on trying to get away from contract work as soon as you can. With great hypocrisy, Atos has a noted bias against serial contract workers. They were seen as inferior, the subtext being “why hasn’t anyone wanted to bring you on full time?” What’s worse is that in addition to the lower pay, lower level of security than a salaried employee, etc is that on the job contractors may be siloed and kept at arm’s length from interesting work. In recessions, contractors are often the first let go. So in exchange for making it through the wringer that is staff agency hiring, it isn’t like you get much in return.

My advice if you really need a job and get what you suspect is a staffing agency email is to try to reverse engineer the role from the location/description and apply to the job directly on the company website. It certainly won’t hurt your chances and if you succeed, you’re going to be getting a lot of benefits a contractor wouldn’t.

In conclusion

So that’s it! That is the deep, dark, hidden dysfunction that goes on in staffing agencies and the reason I have never gotten a job through one since my own experience recruiting for that type of business.

I was (luckily) able to get away from staffing fairly fast, and loved that in subsequent recruiting roles all the behaviors I got mocked for were appreciated. Learning the technology, being responsive to candidates, giving them a good experience: this stuff matters in my opinion, even if staffing agencies act like it doesn’t.

If you have any questions I didn’t address or your own experience with staffing agencies, feel free to share in the comments!

Source: https://dev.to/heyjtk/the-dirty-secrets-of-the-it-staffing-industry-19na

WP Ad Inserter plugin for WordPress