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Some time ago I worked in construction building new homes for first time home buyers. I worked alongside one exceptionally surly superintendent who had made the rounds in the industry for decades. He had stops at a minimum of six homebuilders that I could count, and didn’t make it to Wednesday without threatening to walk out. One day I looked down the block where we were both building homes and saw my co-worker in a yelling match with one of his homeowners. At least twenty of our trades had stopped their work to enjoy the show. Later that day back in the office he had cleared out his desk and written some colorful language on the company whiteboard. Apparently he thought all of his team members, including me, were a special kind of number one.

When my friend first approached me about jumping into the recruiting world with him, I balked. At the time, I worked for a large company and was moving quickly up the ranks. Any experiences I had had with recruiters were mostly negative. Headhunters? They’re like real estate agents, only worse! Nearly four years later, as the primary owner of a recruiting firm, I’d have to say my original opinions about the industry are still the same.

My wife encouraged me to take a closer look at what my friend was proposing. It didn’t take long to realize he had identified a market inefficiency and needed someone to drive the opportunity. What I didn’t know at the time is that usually, when a company hires a headhunter to help them fill a position, they end up paying out a fee between 20-30% of the new hires’ annual first-year salary. Ouch. This is closer to 40% for c-suite placements. Yikes. I remember the first time I sold a home and realized we would be paying out 6% in commissions to realtors for opening a few doors and taking some pictures. I felt sick. There is a reason that companies like Trelora, Redfin, and others are charging 1%. There is a market inefficiency.