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What to ask when being recruited?

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oilythrowaway
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4:04p, 10/10/16
Using a sock here to remain anonymous, but I received a call from a recruiter and spoke with him for a few minutes and am scheduled to speak more with him again tomorrow about my background. I'm a fairly early career O&G professional and the subject company is very small (would be employee #7 according to the recruiter) private equity backed E&P.

I've never been recruited like this before and am not really sure what to ask or say. I work for a top notch company right now and would be scared to leave the relative security, benefits, and pay, but am at the right time in my life to take risks and who knows what might happen if the company is bought out.

So for those who have been recruited before, how does it usually go? I feel pretty excited right now but keep reminding myself that there are probably dozens of people going through this same process with them right now. How do I stand out and how aggressive can I be if they ask me what it takes to leave? For those who do recruiting, is there any way to guess how many people I'm going up against?
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Petrino1
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4:59p, 10/10/16
Youre in a perfect position of power. You work for a great company with pay/benefits, and you'd be leaving for a start-up of sorts, with some degree of risk. Make sure you let the recruiter know that, and let him know it would take a pretty big bump in pay for you to leave (think 30-40%). If you're happy at your current job, theres no reason to switch companies (especially in this oil price environment) unless its for a crazy offer you couldn't refuse.
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In4TheHuddle
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6:22p, 10/10/16
AG
I've been recruited by several startup tech companies in my career. Aside from technical copmetence here are the top 3 things that i think got me hired on many occasions:

1. Culture: I always asked a lot about culture and really do see if you are a good fit. Startups can be quite chaotic @ times and shared values within a team are what bring you through diversity. Its actually good for both parties to get this right, especially in startups. Ask about things like conflict resolution, incentive based performance, work life balance, have them speak more than you, this is actually your part of the interview, listen to what they have to say for most part and process it later.
2. Initiative: It is important to highlight how you have taken initiative in various positions you've held and how you've added value in that regard. They will most likely ask you this question at some point so be prepared with some good examples where you've taken on things outside of your normal job and added value to the company. All startups need people with initiative because you will be required to wear many hats.
3. Horizontal skills: All startup need a variety of skills. Highlight your horizontal specialized skills. If you are good at public speaking, networking, research, communication or anything that you think is valuable outside of your actual domain or job description, mention it.


Congrats on the opportunity, hope this helps.

BTW, i agree with the post above as well. You are in a great position be somewhat aggressive in negotiations. I typical got anywhere from a 25-35% bump in base pay with quarterly bonuses around 10-25% of base depending on quarterly performance. Also, typically had some sort of equity position as well usually in the 10-20k shares range, of course look at their otstanding shares and what the strike would be if their options and what they think its currently valued at.
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aggiesq
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6:30p, 10/10/16
AG
a recruiter or a hired gun head hunter?
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oilythrowaway
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In reply to aggiesq • 7:28a, 10/11/16
I'm not 100% sure I know the difference, but maybe a headhunter? The man who reached out founded and operates a search firm that looks fairly reputable based on their website. He said the client was actually a mutual friend so they knew the team a little better than most of their other clients.
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oilythrowaway
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7:32a, 10/11/16
As far as comp goes, all I've heard so far is competitive base, 50-100% annual bonus, and ownership units that would "pay multiples of salary if monetized".

Only thing that's a little confusing is that he said they were recently funded ($160 MM, which doesn't seem like that much for O&G but I'm new to this) but according to linkedin and the company's website, it looks like they've been around since 2011 so I will definitely need to inquire about their history.

At what point do I start to negotiate salary? I guess that wouldn't really happen until I get an offer? Or should I save everyone time and make it clear from the get go that a solid package is going to be necessary to pull me away? I really have no reason to leave my current company, it's a great place to work.

Additionally, the recruiter acknowledged that most people they'd be looking to hire would have bonuses coming up early next year. I have that and additional long term incentives that will be paid in Q1 next year if I stay. Is it OK to bring those up and try to negotiate a signing bonus or something similar?
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The Original AG 76
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In reply to oilythrowaway • 7:42a, 10/11/16
AG
oilythrowaway said:
I'm not 100% sure I know the difference, but maybe a headhunter? The man who reached out founded and operates a search firm that looks fairly reputable based on their website. He said the client was actually a mutual friend so they knew the team a little better than most of their other clients.
Thats a head hunter. I think that a lot of companies now have employees within the HR dept who are labeled as recruiters. A head hunter does not work for the company and simply receives commission.
In the " old days" it was normal for a lot of non-entry level positions to be handled by a head hunter. Companies did not really have HR depts so good head hunters would establish relationship with managers and executives. Whenever a guy would need someone he would contact " his" headhunter who knew a lot about the company, its culture and the do's and font's that a particular manager had.
It was always a good idea to befriend a few of these types. I got a job via one and had quite a few opps thanks to them. One of the best features of using a headhunter whom you had a relationship with was that you could get a lot of insight about the particular manager and the company. The headhunter actually helped weed out the not so good fits and conversely helped a prospect from wasting his time with someone whom he really had no chance.
Hired some of my best guys via headhunters BUT I think that this has largely gone away due to the growth of internal recruiters and all of the interference that has developed within the hiring process due to these large internal " helpers".
It was an interesting dynamic back then and kinda fun.
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Petrino1
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11:08a, 10/11/16
Oilythroaway, yes bring up everything (compensation details, future bonuses, benefits etc) with the recruiter before you interview so everyone is on the same page. if you wait until after the interview to talk salary you may find out that they cant afford you, thus wasting everyones time.

Tell the recruiter now that you would be expecting a pretty big bump in pay to switch companies and see what theyd be willing to offer. Also, Im assuming you have a pretty solid benefits/retirement package at your current company, keep in mind that the benefits at the newer company probably wont be as good since they are smaller/start-up. Negotiate that into more compensation for you as well.
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oilythrowaway
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In reply to Petrino1 • 12:53p, 10/11/16
Thank you!

Had another phone call with the recruiter where we went over my resume, goals, expectations, etc. I laid out my current compensation and tried to be clear that I have plenty of reasons to stay and that it would have to be worth my while. It sounds like a pretty good opportunity with a bump in base comp and a large bump in potential bonus and described the compensation is being structured somewhat like banking.

I asked a few questions about benefits and company history that he wasn't fully informed on but hopefully he will get some more info for me or I can ask them when I interview in person. He said he would make the introduction today and I guess we'll set up an in person interview in the near future. He mentioned that they will probably talk to 5-6 people so hopefully I can put my best foot forward.
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TxAg20
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5:41p, 10/11/16
AG
It's likely that this is the 2nd or 3rd iteration of this company if they've been around since 2011 but just got funded. $160 mm is a little small for PE backed oil companies these days, but it's a lot more than Energy Transfer or Concho started with, so I wouldn't worry too much about it. I would say they like you if they make you an offer. You could hold out for 10-20% more than their original offer and likely get it. I'd suggest you bargain hard on the b-shares as it's kind of like Monopoly money today, but can become a really nice bonus when monetized.

I've never worked for a PE backed company, but one has been trying to hire my Controller for over a year. They've gone up 30% from their original offer.
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oilythrowaway
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9:33p, 10/11/16
What is the typical time frame for the life cycle of these sorts of companies? Obviously the PE firm that backs them is looking for the monetization event, not just decent cash in cash returns. At what point is it a red flag if they haven't sold out yet?
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TxAg20
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In reply to oilythrowaway • 8:37a, 10/12/16
AG
In my experience, the PE sponsor raises funds with a 10 year life-cycle that can be extended 1 or 2 years if needed. This means the PE company has 10 years to invest the money and return it to limited partners, but can extend a year or two if necessary.

The PE backed companies typically have a 3 to 5 year plan. Sometimes they get in and out in a year, sometimes 7 years, but most shoot for the 3-5 year timeline. If the company has just been spending G&A for a few years with no acquisitions, the PE sponsor will typically pull their funding. Also, if the PE sponsor feels like the portfolio company is under-performing with their asset base, they can pull the assets or replace management.

PE backed oil and gas is a good way to leverage other people's money and make a quick return. The drawbacks are whipsawing work load and starting over every few years. It's a really good way to build wealth quick if you don't have a lot of capital to start with.

I'm not sure what point would be a red flag. Crownquest (Midland-based Permian player) is something like 10 years and several hundred million dollars into their $75 million, 3-5 year commitment from Limerock and everyone seems to be happy with the arrangement. They're an exception to the typical model, but there is no set red flag timeline. It's going to depend on the circumstances around each PE sponsor and portfolio company.
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oilythrowaway
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8:01a, 12/15/16
Wanted to come back and update this thread.

I had a phone interview with the firm last week and it sounded pretty positive to me. They recently created their third fund using PE money, first two were backed by LPs. The first two funds are in payout and just waiting for the right deal to exit.

The job itself seems to align very well with my skillset, although they focus on a basin I don't have first hand experience with. I'm excited by the prospect but honestly nervous about the negotiation from this point forward. They stated that they were wanting to put a team together to do this for the next 20+ years (they are all in their early 30s it sounds like).

They want to set up an in-house interview in January. If they offer me the job, how do I decide whether to stay or go? I work for a top notch operator right now and have been told I have a "bright future" here (although I don't put a ton of stock into that because I think they tell a lot of people that). What sort of analysis would you wise folks do when deciding whether or not to leave? Cultural issues aside (I realize I have to get along with the new team etc), at what point is it "too good to turn down"?

I'm mid 20s, soon to be wed, and don't have any kids.
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Corps_Ag12
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8:43a, 12/15/16
AG
Take a legal pad, make two columns (one labeled Pro's & the other Con's), and list everything out that you can think of. It may take you a week or so to do this as items will randomly pop up in your head.

And yes, they tell everyone they have a bright future with the company. It's to try & get them to stick around longer without a huge salary bump that a hire in your position with experience would ask for.
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Aggielandma12
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9:19a, 12/15/16
AG
Quote:
What sort of analysis would you wise folks do when deciding whether or not to leave?

If I were you I would go with the PE company if you are offered the position. You have potential to make millions in the next 3 to 5 years. Keep in mind it will be a very fast paced work environment, especially compared to working for one of the Big 4's. If you like being able to use all your vacation and leave work at 5pm everyday then I think you would be pretty miserable at a PE company.
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FarmerJohn
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10:00a, 12/15/16
AG
Quote:
Hired some of my best guys via headhunters BUT I think that this has largely gone away due to the growth of internal recruiters and all of the interference that has developed within the hiring process due to these large internal " helpers".

BEGIN HIJACKING

I work in the same industry that you used to and caught the tail end of the professional headhunter era. I was lucky. We had an open position a couple years ago and were limited to using the internal recruiters. It took 9 months to find someone for this entry-ish level role and even then it was a minor miracle as they sat on the offer letter for a couple months. (The eventual hire had been ill and so while they thought we weren't interested because of the lack of feedback, they also hadn't been able to aggressively pursue the job hunt.) We had to constantly remind the internal recruiters what type of work we did and what skills were needed. "Yes, we are an engineering department. Yes, the requirement in the requisition for an engineering degree is a hard requirement."

The funny thing was that every single member of management had been placed at that company by a professional headhunter.

END HIJACKING
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Zemira
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10:12p, 12/16/16
AG
I don't know much about PE backed Oil and Gas firms but at smaller firms back in the 90's it used to be common on new fields to negotiate a small <0.5% NRI on new wells/fields.

There are old guys making bank now off the NRIs. I would jump at the chance if I could negotiate one of those on a new field. I'm fairly sure it doesn't happen anymore but every time I had to do a calculation/payment for one I always wished I would be the recipient.

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lew09
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2:39p, 12/18/16
AG
Just a couple of thoughts from a headhunter (I work in agriculture, so some of the issues are a bit different):

1. The biggest benefit I can see for a company and a candidate to work with contingency, third party recruiters (headhunters) like me is that our livelihood depends on commission. If we don't make a placement, we don't get paid. Now, that might seem like a negative to some; I've heard a lot of people claim that headhunters throw as much against the wall as they can and see what sticks. This does occur frequently, and it's a terrible way to do business. I NEVER try to make a ridiculous amount of phone calls in a day. I do my research, find a few potentially qualified candidates, and spend half an hour on the phone with each one during an initial conversation. Client companies will not hire a headhunter again if he cannot deliver quality candidates from which to choose. Based on how well your qualifications fit the job, it sounds like you may have a headhunter who understands this.

2. The money question: when do I negotiate salary? This is a great question, and one that tends to ruffle a lot of feathers. I posted on a forum a while back on the job board concerning this question. I almost always ask a candidate what he is making during the first conversation, and I then ask about the rock bottom salary required to make a change. This is not to begin salary negotiations, but merely to determine whether everyone's ducks are on the same page. In fact, I tell clients and candidates not to discuss salary during initial interviews, but to focus on cultural fit, etc. If they are in the same ballpark, then salary negotiations come further down the line. Be honest about this, and it will pay off. I've had situations were an employer gave a specific hiring range, but I showed them a candidate above that level anyway because he was so strong. Nobody has anything to lose in that situation but me.

3. It seems like your head and heart are in the right place on this. You appear to be asking the right questions. When I talk with seemingly talented candidates but they get hung up on salary and nothing else (opportunity, culture, meaningful work, etc.) I tend to let them slide back into the pool and keep searching. Likewise, if candidates say they are willing to take pay cuts and/or make lateral moves, that is a red flag as well. Sometimes they are sincere and have good reasons, but often not. My point is, choosing employees AND choosing employers are balancing acts.

4. I'm sure you've thought hard about this, but your industry is in a state of upheaval now, even though some think that will change soon. I get questions all the time from folks in O&G who want to work in agriculture. I've also had candidates who were promised the moon to work for a smaller company and were sorely disappointed. That being said, I am personally a huge believer in small and/or startup companies. That's my niche as a recruiter, and it's a personal mantra that I've employed throughout my career. It's just important to understand the risks, so ask as many questions as you can. A good recruiter will defer to the hiring manager on many of the important questions instead of trying to guess.

Good luck!
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oilythrowaway
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In reply to lew09 • 12:01p, 12/21/16
Great points all around, thanks so much for the feedback. Have a lot of thinking to do between now and Mid-January!
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oilythrowaway
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9:10a, 1/26/17
Got the offer!

Very excited about this opportunity. Yearly cash comp isn't as much of a bump as I was hoping, but the long term incentive/equity is really tempting. Will be hard to leave relative security of my job, and coworkers I really enjoy working with. Ultimately, I'm in a position where I believe I should take risks and I think that's what I'll do.

Does anyone have advice about counter-offering? Tried hinting to the headhunter but didn't get much out of him. I expect to get a raise at my current job in a month or so that would probably put my salary at or above the offer, and I'd at least like them to match/slightly exceed it. In the long term the new deal could be lucrative but I don't want to take a pay cut along the way really.
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BTHOB
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10:44a, 1/26/17
AG
I would definitely communicate your impending salary increase with your current organization and express your concerns about taking a pay cut to change jobs. I would require them to, at a minimum, match your upcoming 'increased' salary.
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lew09
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In reply to oilythrowaway • 11:00a, 1/26/17
AG
oilythrowaway said:
Got the offer!

Very excited about this opportunity. Yearly cash comp isn't as much of a bump as I was hoping, but the long term incentive/equity is really tempting. Will be hard to leave relative security of my job, and coworkers I really enjoy working with. Ultimately, I'm in a position where I believe I should take risks and I think that's what I'll do.

Does anyone have advice about counter-offering? Tried hinting to the headhunter but didn't get much out of him. I expect to get a raise at my current job in a month or so that would probably put my salary at or above the offer, and I'd at least like them to match/slightly exceed it. In the long term the new deal could be lucrative but I don't want to take a pay cut along the way really.

I always caution folks about counter offers. If you've already made the mental commitment to take the new gig (and maybe you haven't yet, but if you do), and your current employer offers more to keep you on, you end up in a potentially damaging situation down the road. The things you don't like about your current gig won't change with an increased salary, and then when you do decide to make a move in the future you might be pricing yourself out of the market. In other words, it would take an even larger jump in compensation in the future to take on a great opportunity. And if you do convince your current employer to give you a raise to keep you around, you run the risk of them resenting you for it. Of course, these things are always on a case-by-case basis dependent on multiple factors, but just something to consider.
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oilythrowaway
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In reply to lew09 • 11:07a, 1/26/17
lew09 said:
oilythrowaway said:
Got the offer!

Very excited about this opportunity. Yearly cash comp isn't as much of a bump as I was hoping, but the long term incentive/equity is really tempting. Will be hard to leave relative security of my job, and coworkers I really enjoy working with. Ultimately, I'm in a position where I believe I should take risks and I think that's what I'll do.

Does anyone have advice about counter-offering? Tried hinting to the headhunter but didn't get much out of him. I expect to get a raise at my current job in a month or so that would probably put my salary at or above the offer, and I'd at least like them to match/slightly exceed it. In the long term the new deal could be lucrative but I don't want to take a pay cut along the way really.

I always caution folks about counter offers. If you've already made the mental commitment to take the new gig (and maybe you haven't yet, but if you do), and your current employer offers more to keep you on, you end up in a potentially damaging situation down the road. The things you don't like about your current gig won't change with an increased salary, and then when you do decide to make a move in the future you might be pricing yourself out of the market. In other words, it would take an even larger jump in compensation in the future to take on a great opportunity. And if you do convince your current employer to give you a raise to keep you around, you run the risk of them resenting you for it. Of course, these things are always on a case-by-case basis dependent on multiple factors, but just something to consider.
Hmm I think I must have been unclear. I do not plan to bring the offer to my employer and ask them to match or beat it. We have a yearly review process that includes raises which will be coming up in about a month.

What I would like to do is make the new employer aware of this and counter offer them with a higher base salary.
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BTHOB
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In reply to oilythrowaway • 12:37p, 1/26/17
AG
oilythrowaway said:
lew09 said:
oilythrowaway said:
Got the offer!

Very excited about this opportunity. Yearly cash comp isn't as much of a bump as I was hoping, but the long term incentive/equity is really tempting. Will be hard to leave relative security of my job, and coworkers I really enjoy working with. Ultimately, I'm in a position where I believe I should take risks and I think that's what I'll do.

Does anyone have advice about counter-offering? Tried hinting to the headhunter but didn't get much out of him. I expect to get a raise at my current job in a month or so that would probably put my salary at or above the offer, and I'd at least like them to match/slightly exceed it. In the long term the new deal could be lucrative but I don't want to take a pay cut along the way really.

I always caution folks about counter offers. If you've already made the mental commitment to take the new gig (and maybe you haven't yet, but if you do), and your current employer offers more to keep you on, you end up in a potentially damaging situation down the road. The things you don't like about your current gig won't change with an increased salary, and then when you do decide to make a move in the future you might be pricing yourself out of the market. In other words, it would take an even larger jump in compensation in the future to take on a great opportunity. And if you do convince your current employer to give you a raise to keep you around, you run the risk of them resenting you for it. Of course, these things are always on a case-by-case basis dependent on multiple factors, but just something to consider.
Hmm I think I must have been unclear. I do not plan to bring the offer to my employer and ask them to match or beat it. We have a yearly review process that includes raises which will be coming up in about a month.

What I would like to do is make the new employer aware of this and counter offer them with a higher base salary.
Yeah, that's what I meant...
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aggie028
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12:58p, 1/26/17
I would make sure you understand exactly what your payout will look like if a sale happens. And yes, that is where I would negotiate for more.

Also, if they have existing funds, I would be negotiating for B shares in those entities if I was going to do any work on them.

Also seems strange to me that they have two entities that aren't in shape to sell. The market has been very hot last 12 months. That's the only red flag to me. I'd try to learn about the management team's background. If they are on their third fund and it's by the same backer, that probably tells you that the first two will work out. If not, might dig in a little more.
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oilythrowaway
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8:08a, 1/30/17
I decided to counter offer with an increase in base salary only. I felt the units are already pretty generous and just wanted a little more of a raise to jump ship. Hope to hear back from them today or tomorrow. Very nerve wracking but exciting.
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sockerton
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In reply to oilythrowaway • 10:35a, 11/28/18
Any update? Did you take he offer, do you like the job or did you stay??
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