Recruiting Like an Underwriter: How Headhunters Evaluate Candidates

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In this issue:

• Intro to recruiting like an underwriter

• The story of how I had two declined offers in one week back in 2015, which prompted me to seek advice from a top billing mentor. That mentor coined this phrase and stuck with me since.

• The logic & how process on recruiting like an underwriter

Intro: Let’s Get Real About Recruiting

Here’s a truth most people don’t realize about recruiters: we’re not just talent matchmakers; we’re risk managers.

Yes, finding the right candidate is important. But equally crucial—if not more so—is evaluating the risk that comes with every potential hire.

It’s not as simple as “do they have the skills?” We have to ask deeper questions:

• Will they accept the offer?

• Will they stay long enough to make a meaningful impact?

• Are there red flags that could turn into costly mistakes later?

That’s why I’ve started thinking of recruiting like underwriting. Underwriters in the finance world don’t just say “yes” or “no” to an application. They assess risk, calculate the cost of failure, and ensure their decisions protect the company’s bottom line.

Recruiting isn’t so different. And adopting this mindset? It can completely change how you approach your craft.

Why “Underwriter Thinking” Changes the Game

In the traditional recruiting playbook, it’s all about finding the right skills, the right experience, and the right culture fit. But here’s the kicker: even the “perfect” candidate can turn out to be the wrong hire if you don’t think ahead.

What underwriters do brilliantly is balance potential against risk. They know that one bad decision can lead to massive losses, so they take a 360-degree view of every applicant. As recruiters, we need to do the same.

Here’s why this mindset matters:

1. It’s Not Just About Today
   Like underwriters think about loan repayment over years, we need to think about how a candidate will perform over the long haul. Are they just chasing a paycheck? Or are they genuinely aligned with the role and company vision?

2. Risk is Expensive
   A bad hire isn’t just a “whoops”—it’s a six-figure mistake. Between training costs, lost productivity, and the cost of finding a replacement, the wrong candidate can set your client back for months (or years).

3. It Builds Trust With Clients
   When you position yourself as a risk manager, you’re no longer just a recruiter filling seats. You’re a strategic partner helping clients avoid costly missteps. That’s how you build trust—and keep clients coming back.

Breaking Down Candidate Risk

So, what does risk evaluation look like in practice? It’s about more than just spotting the obvious “red flags.” You have to think like an investigator. Here’s the framework I use:

1. Red Flags Aren’t Always Red Lights
   Gaps in employment? Job-hopping? On the surface, these might look like deal-breakers. But context is key. Maybe the gap was for family reasons, or the job-hopping was due to layoffs in a volatile industry. Dig deeper. Ask better questions.

2. How Likely Are They to Say Yes?
   A candidate might be perfect on paper, but if they’re lukewarm about the opportunity, they’re a flight risk before they even start. Salary expectations, relocation concerns, career goals—all of this impacts the likelihood they’ll accept.

3. The Retention Factor
   Once they’re in the door, will they stick around? Misaligned values or unclear growth opportunities are silent killers for retention. Understanding a candidate’s long-term goals helps you assess whether they’re in it for the long haul—or just until something shinier comes along.

Storytime: When I Ignored My Gut

So how did this phrase pop up?

Simply put, in one week I had two declined offers back in 2015. I was obviously distraught and wanted to seek advice. So I asked my one mentor - let’s call him Jay. Jay went over both situations with me one by one.

The first candidate was a referral. I had an offer for her for a 10% raise for the same team the person who referred her was on. When she declined I was obviously surprised.

Then Jay started digging into “why”, and I had no answers for his questions. Why did she want to leave? What was her main motivating factors to leave? How active is she on the market? Any other opportunities? Etc.

I felt like an idiot having no answers to his questions. All I could say to him was that she was a referral and got her more money.

Long story short, she ended up declining the offer and stayed put at her current gig because it wasn’t worth moving for. She needed a raise, promotion, and a clear track up the ladder which my role didn’t provide. It was a pure lateral move and she was going through the motions.

The other candidate, I did equally as bad. It was a SWE who was full time, and I got him an offer for a long term contract. My contract would hypothetically make him more money. I thought it was a no brainer.

Then Jay goes “Why the hell would you submit this guy?” and started chuckling to himself.

I said “because he told me he was interested”.

Then Jay goes “Would you leave your full time job for a contract that paid just a little bit more?”

I go no, and it hit me there.

I realized back in 2015 that a lot of the time these folks just go through the motions to get an offer just to see what their market value is, for an ego boost, or just to see what’s out there and if it’s worth making a move.

Then, he explained to me how to recruit like an underwriter, and the rest was history.

How to Recruit Smarter

Thinking like an underwriter isn’t about being overly cautious—it’s about being strategic. Here are three takeaways to level up your recruiting game:

1. Get Comfortable With Hard Conversations
   It’s easy to sell the dream candidate. It’s harder to flag potential risks with your client when they’re emotionally invested. But being honest about red flags—or even walking away from a candidate—builds long-term trust.

2. Use Data, But Don’t Ignore Your Gut
   Metrics like tenure or salary benchmarks are important, but they’re not the whole story. If something feels off, dig deeper. Your intuition is a valuable tool.

3. Think Like a Business Owner
   Your client’s bottom line is your bottom line. A bad hire isn’t just a blow to their team—it’s a hit to your credibility. Protect your reputation by putting long-term success ahead of short-term wins.

Wrapping It Up

Recruiting like an underwriter isn’t just a nice analogy—it’s a mindset shift that can change everything. You’re not just filling roles. You’re minimizing risk, maximizing outcomes, and positioning yourself as a strategic partner who gets it.

So next time you’re evaluating a candidate, ask yourself:

• What’s the risk here?

• Am I protecting my client’s investment?

• Will this decision hold up 6, 12, or 18 months from now?

If you’re a recruiter, hiring manager, or candidate who wants to dig deeper into this approach, hit reply or share your thoughts in the comments. And if you found this helpful, do me a favor: share this newsletter with one person who could use it.

Because at the end of the day, recruiting isn’t just about finding talent—it’s about building trust, making smart decisions, and playing the long game.

Let’s get to work.