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Job market & Pay - WTF?

Now this just plain pissed me off.
Got a call from a recruiter - says he's looking for someone with a skillset that I match. The company has "scoured the net and can't find anyone"

So I tell him to go ahead and submit my resume (always keeping my options open) and give him a salary. He sounds hesitant about forwarding it, floats some babble about W2 vs. 1099. I point out that my W2 rate is 2/3 of my 1099 rate, which is more than fair. He agrees, but still sounds edgy.

"I know," I say "you're going to tell me that with the job market that pay rates are down, right?"
"Yes," he replies, his voice brightening.
"Okay, listen - you've already said they've looked and can't find anyone. If the job market is so bad that I should be grateful for any job offer, how come I'm employed and they can't find any job candidates?"

So he's sending me in with my salary request and a justification.

I'm not denying that there are job market issues, but once again we see management not understanding how it works - when you have a dozen candidates for a job, then you get to lowball. But when you can't find *anyone* to fill a position, then you have to evaluate what they're asking against your budget and need, not some wishful "but the job market says I don't have to pay you that" whine.

Needless to say, this may be a good indicator that I'm wasting my time with them... [grin]

Philo

Philo
Wednesday, August 27, 2003

How ironic: the very managers do not understand the basic concept of "supply and demand".

Yet, still, I am not at all surprised.

Mickey Petersen
Wednesday, August 27, 2003

Never worked for any company where salaries were not determined by emotional or psychological parameters. Perhaps that can be exemplified with Apple's pricing strategy: displays are quite cheap ("it's just a display to draw pretty pictures"), while components' like RAM sticks' prices are hefty ("those are high-tech chips"). When so many newspapers are whining about the recession, even experts MUST be cheap.

Johnny Bravo
Wednesday, August 27, 2003

Philo, when recruiters talk about the market being down, they're trying to get YOU to accept low pay rates, while they charge normal rates to the employer.

In fact, if your skill is in short supply, they're possibly even charging a premium.

All this gives them a bigger profit, at your expense.

If you have your own customer base, you would be stupid to accept an arrangement through a third party that will try to control you out of the loop.

JM
Wednesday, August 27, 2003

"If you have your own customer base, you would be stupid to accept an arrangement through a third party that will try to control you out of the loop. "

..and therein lies the rub, huh?

That advice sounds wonderful and all, but the fact of the matter is most techies don't have their own customer base, and even if they do using recruiters is just a necessary evil if you want to maximize the potential to land a job.

Not me
Wednesday, August 27, 2003

Not me, Philo has already told us he DOES have a business base.

Second, the thrust of my comments was that, no, recruiters are not the best way to maximise the chances of good jobs.

Not me, you're clearly not a developer.

JM
Wednesday, August 27, 2003

<quote>
Not me, you're clearly not a developer.
</quote>

I for one agree with Not me's comments on this issue.

Seeya

Matthew
Wednesday, August 27, 2003

If you don't mind me asking, Philo, what are the rates (or ballpark if you don't want to quote exact numbers) you quoted, and in what part of the country are you located?

I'm just trying to get an idea of what the rates are like these days for highly skilled individuals.

Dave
Thursday, August 28, 2003

(Needless to say, if you'd prefer not to provide that information, that's not a big deal at all. Just curious.)

Dave
Thursday, August 28, 2003

Most managers seem to have emotional issues about paying higher rates, even when the labor market supports them. I've seen a number of situations where Highly-skilled Programmer A quit because he was refused a raise, but then management had to turn right around and hire Highly-skilled Programmer B for the salary that A was requesting....

Rob VH
Thursday, August 28, 2003

First of all to JM: Recruiters charge a percentage of your salary to the hiring company. Thus, they should want you to make as much as possible. You've obviously had little experience with this job search method.

Second, the job market is currently "nuts" (that's the technical term for it). When everything was "hot" at least you could count on everything being uniformly nuts. Now, I don't know what to expect from anyone.

Earlier this year, I was offered three jobs in the Midwest.

Company #1 (medium-tech, growing fast, couldn't find the right person)
Director-level job = $75K

Company #2 (medium/high-tech, not growing at all, could find lots of people)
Senior engineer = $80K

Company #3 (medium/high-tech, growing slowly, large, bureaucratic, could find some people)
Lead engineer = 6 figures.

All I can say is WTF.

As for rates, I've seen directors in the midwest going for $75-125K when they used to be $100-150K (depending on size of company and what field). I've seen seasoned developers going for $65-90K when they used to be $75-100K. I've seen entry-level going for $40-65K when they used to get %50-70K.

Contract rates are all over the place. I've made $50-100/hour for the same basic boring work. I see people continue to make $150-200/hour because they have skills that people need. For less-than-critical consultants, I see anywhere from $30-125/hour. It's NUTS I tell you!

StickyWicket
Thursday, August 28, 2003

JM,

I never said that recruiters were your "best chance". No idea how you came to that conclusion...

I did say that unless you are an established consultant with a proven track history with a number of companies, then recruiters are a necessary evil if you are looking for a contract position. They have the contacts, they have the leads.

As far as me not being a developer....You arrived at that conclusion based on a single paragraph about recruiters, that happened to be oppposed to your ideas? Wow. That's amazing. Amazingly daft, but amazing in it's own right...

Not me
Thursday, August 28, 2003

I believe there is a minimal rate, which immideately gives indication about  good developer and manager. If recruiters ask for a lower rate, it only indicates, that their business is in the trouble.

Evgeny Gesin /Javadesk/
Thursday, August 28, 2003

It sounds to me like the recruiter is the one lowballing you, not the management.  If he can get you to accept a lower salary before you even say word one to his client, then his client is more likely to hire you, and thus he is more likely to get his commission than some other recruiter.  Even if he can't get everyone to buy the "current market conditions" line, what's the harm in trying?  He still got you to agree to let him send your resume in anyway, right??

Foolish Jordan
Thursday, August 28, 2003

For contract work, recruiters and consultants are paid out of the same pocket; thus, there will always be a certain amount of friction between them.

Typically, rates are NOT open, and sometimes only the broker knows the cut: the client knows what s/he is being charged, and the consultant knows what s/he is getting. Clients with more pull often demand open billing, and sometimes even limit the agency fee to a specifed percentage. It's much more rare for the consultant to know in advance what the billing is (although of course you may discover it during the course of the project ;)

Recruiters these days are only too happy to talk about how low rates are, with the obvious subtext: "so lower your rate". However, if your skills are good, and there are multiple recruiters competing to fill the open positions, then you are typically in not too bad a spot, since it's better for the recruiter to get SOME money than NO money.

"even if they do using recruiters is just a necessary evil if you want to maximize the potential to land a job."

I thoroughly agree with this too: when you use recruiters it's in THEIR interest to get you a job. It's not that you can't find a job directly; it's just a lot more difficult to do so.

Peter Breton
Thursday, August 28, 2003

It clearly is not always advantageous to the recruter to have you "earn as much as possible".

For example, they would likely be much happier to place you at a lower salary than not to place you for a higher one.

A splended 20% increase for you would not work out to much more for the recruter. Thus, he would not necessarily work very hard to get it for you.

njkayaker
Thursday, August 28, 2003

Your point is missing the point. A recruiter who is placing you should know what the range is and will try to get people in the top end of that range because they make more money. If you are good enough, the recruiter will market you such that they maximize their cut. In some cases, the recruiter may get you in higher, but there are risks if multiple recruiters are competing or if the relationship with the client is tenuous.

However, if the recruiter is placing you as a contract worker and pays you out of their fixed cut, then of course they will pay you lower. However, this is atypical IMO.

StickyWicket
Thursday, August 28, 2003

> Recruiters charge a percentage of your salary to the hiring company. Thus, they should want you to make as much as possible. You've obviously had little experience with this job search method.

Stickywicket, Philo has told us the position is contract. In that situation, recruiters actively minimise the amount they have to pay the employee, to an extent you could not start to imagine. I actually have a lot of knowledge of this for reasons I won't go into here.

Second, even for salaried positions, it's not necessarily true that they maximise the salary for the employee. Many recruiters have bulk placement deals with large employers such as Microsoft, and the recruiters win those deals by undertaking to provide low-cost workers. For example, they undertake to provide 50 C++ programmers at average salaries less than $60,000, or whatever.

JM
Thursday, August 28, 2003

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