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Why does it seem that so many employment agencies/recruiting firms have dodgy reputations?

Most agencies and outside recruiters are short-term, transactional focused. They have armies of sourcers that comb the various online channels to uncover candidates, then hammer them with emails, Inmails and calls to unlock someone willing to explore a new position*. And when they find that person, they spam them out to every client company in the hopes that one bites. This shotgun approach is effective for the agencies — many are multi-million dollar operations — but only nominally successful for the company and candidate. Most candidates receive no response from most companies, and the ‘successful’ ones end up with the result of a randomly executed job search (which, chances are, was not the best next step for them).

* Many agencies don’t even do this. They spam the candidate profile to companies first, without permission. Once they hear of an interested company, they approach the candidate, telling them that one of their clients is “very interested in meeting you”. If the candidate doesn’t respond or says ‘no’, they’ll just tell the company that he/she is off the market. If the candidate says yes, then it’s off to the races and neither party ever knows of the unethical beginning.

A bit more explanation via a case study from Kabam, a social gaming company:

My team has spent the last 4 years in-house, building two successful startups. In the process, we hired almost a thousand people (mostly engineers) and worked with dozens of agencies. And while there are some solid agencies out there, most offered no real value — to their client (us), and by extension, to the candidates.

From 2010 to 2011, Kabam grew from 20 employees to over 500, and built a sophisticated recruiting operation to drive that growth. We had five primary sources of hires: internal referrals, our own sourcing/recruiting efforts, our Kabam.com career site, our job posting network, and a number of contingent recruiting agencies. Over the course of two years, we engaged dozens of agencies, and those agencies submitted thousands of candidates. The results were mixed at best, and poor overall.

Our expectation for agencies were minimal — we anticipated that they would a) screen candidates against our requirements, matching those that were optically good fits, b) vet them further by introducing them to the company and making sure they were interested and c) prep them — give them the basics on the company and role so they entered the process reasonably informed. Then, and only then, would they make an introduction.

We expected that agency candidates would minimally ‘do better’ than random ones (e.g. they would perform better in interviews and be hired more often) and actually do better than internally-generated candidates. After all, theoretically they were pre-screened, and are already informed and sold on the company. And an agency has the benefit of focus; they work on one type of position all day, every day, where the internal team is pulled in multiple directions.

The reality was starkly different.
- Most agencies did a poor job matching candidates with our stated requirements
- Many candidates had no idea how we had received their resume, and some had never heard of their supposed agency recruiter
- Some candidates expressed an active disinterest in gaming and therefore it wasn’t a good fit (for either side).
- Most candidates started the process with little to no information on the company and our role

The statistics underline the problem:
- 90% of agencies scored worse than submittals from our career site. This merits repeating: almost every agency had a worse submittal-to-hire ratio than random resumes sent to us via our job board. Kabam hired 1-2% of candidates from its career site. Most agencies were batting well under that mark.
- There were multiple agencies that had submitted hundreds of candidates before their first hire; most had no hires.
- Only 10% of the agencies beat the low bar of ‘random submittals’ and even the best agency under-performed our internal team.

What should we make of this?

Most agencies are playing a numbers of game — the more candidates spammed out, the higher the likelihood that someone will stick somewhere (and a fee will be triggered). As a result, they care little about the important pieces of the recruiting puzzle: understanding their candidates and their goals and interests, developing a long-term relationship, setting their candidates up for success, etc. All that takes time – time they could be spending sourcing new candidates and spamming them out to their clients.