Recruiting Trolls?

A manufacturer recently shared a story about a very bad experience with recruiters.

The gist of it is this:

A manufacturer pays a recruiter to find a candidate for a position. Recruiter sprays a bunch of resumes, manufacturer eventually picks one, pays the recruiter.

Shortly thereafter, recruiter starts calling up that candidate, who is now an employee at the manufacturer, soliciting them to leave the manufacturer and take a new position.

So manufacturer pays $20,000+, only to have the same recruiter try to nab that person away so recruiter can make another $20,000+.

Clever tactic for the recruiter if he can make it work but bad deal for the manufacturer client.

Anyone seen anything like that? Anyone think that is a fair deal?

Are you saying the same recruiter that placed the employee is now recruiting the same person again?

If so, that's horrible, unethical, despicable behavior.

Yes. Edited to make that point clearer in original post.

Yes, have seen it.

It is mitigated to a small degree by the fact that reputable placement firms guarantee their recruits for a number of months, depending on position, for several months to a year.

Which would be great except that the guarantee only means you will get a replacement person at no extra cost. Which also means they are not super-motivated here.

To be honest, the times I have seen it has been when a recruiter at a firm changes jobs themselves and then goes on Rolodex redial mode. That is harder to spot and you have no one to threaten.

The best defense is keep your employees fairly compensated. No one wants to go thru the hassle of getting a new job just to make a recruiter $20,000. Unless a super oppurtunity comes out of the blue, the well compensated employee is going to stay put.

In this case, the employer found out because the employee informed them that the recruiter kept on calling the employee to take a new job.

So, sure fair compensation is important.

But the manufacturer's position was basically, hey I am your customer. I just paid you a lot of money for this. And then you want to take this away from me to essentially sell it to someone else.

So, sure the recruiter may feel entitled to do so, but I cannot imagine he is going to maintain long time client relationships with that approach.

Btw, good point about recruiter changing jobs and then doing this.

I agree with the manufacturer's position here. Being a client of a recruiting firm should protect you from that same firm recruiting your employees. I would imagine the agreements signed would prevent this.

Also, I have seen the other side of this. I've heard of good recruiters turning away employees of their clients that are looking for new jobs, citing an agreement between the recruiter and current employer.

As an employer, I would mind that behaviour.

As a job-seeker, I would like to hear of new opportunities. If I am happy with my work place I will decline the offer. If I think there are better opportunities I will take them (this can of course back fire, job-hopping every 6 months is not good, but each one should make his decisions).

Gone are the days that a work place was loyal to the employees, during the financial crisis I heard of companies that fired emplyees just to hire new ones for the same position but at a lower pay. Why should the employee decline to get better opportunities.

"As a job-seeker, I would like to hear of new opportunities."

Certainly, that's fair.

The only question is whether the recruiter who placed you there has an ethical (or at least prudential) obligation not to try to pull you out.

Ultimately, the solution for this manufacturer was to put it into the recruiter's contract that they could not solicit employees they placed in their company for a certain period of time. That, of course, leaves the employee free to look where they want but forces the recruiter not to solicit that employee.

I heard of companies that fired employees just to hire new ones for the same position but at a lower pay...

Employees that were perfectly fine otherwise were fired for to make room for cheaper newbies? That's pretty harsh.

i doubt it paid off much, what with the increased unemployment insurance-tax / severance costs / health insurance and accrued payroll payouts from whacking the veteran employee, plus training and orientation and other one time expenses from the hiring the new, its gotta be a good size pay differential to be worth it.

Also, it depends on the complexity of the job. That said, I agree that most tech jobs, firing employees just to get cheaper ones is hardly a productive or profitable strategy after all costs are factored in.

On the topic of getting lower cost workers, Robert Cringely's take on H1B Visas being a scam for just that reason.

1. It is obviously unethical on behalf of the recruiter. The company social media reviews alone would damage their cedibility and word has a way of spreading.

2. Employers who demonstrate unscrupulous behavior also get bad reptuations. There are some stories in this forum just this month that can demonstrate that quite well. Eventually your chickens do come home to roost.

3. This is why we have employment contracts for employees.

It important to have a clause in your contract that prevents the recruiter from poaching your all of your employees. It usually has a time limit of 2-3 years. I shared an office with a recruiter for several years, and he told me any good recruiting company would have that in their contract, and always tell their clients about it.

He said it was easier to find the candidate to place into a position than is was to find an employer willing to pay the fee, so they are shooting themselves in the foot.

"He said it was easier to find the candidate to place into a position than is was to find an employer willing to pay the fee, so they are shooting themselves in the foot."

Agreed. Typically companies paying recruiters are fairly big, which, means by definition, there will be far far fewer of them than potential candidates.

It important to have a clause in your contract that prevents the recruiter from poaching your all of your employees. It usually has a time limit of 2-3 years. I shared an office with a recruiter for several years, and he told me any good recruiting company would have that in their contract, and always tell their clients about it.

This was my first thought as well - and as the client, if you're signing an agreement that DOESN'T have such a protection built in, you have yourself to blame as much as the recruiter.

Curious how companies in this industry recruit people?

"Curious how companies in this industry recruit people?"

The main 3 factors I have seen is position being filled, growth rate and industry position. The higher the position and the faster the company growth rate, the more likely recruiters are used. Also, companies expanding into the industry are more likely to use recruiters since they have weak industry relationships.

That said, for mid to senior positions, I think personal connections / networking are most common. One, because people trust people they already know (and often have worked with) and, two, because the industry is fairly small. Finally, not having to pay a $20,000+ fee is a bonus.

This unfortunately is not unusual. Recruiters, like all professions, have people who are very near sighted and only live for today. True professional recruiters, like professional sales people, look at the long term big picture. My daughter was a very successful recruiter and shared with me certain companies that she would not seek placements for, because she wanted to recruit out of that company. She work for one of the largest firms in the country until one of her client companies hired her as a senior executive for their firm to do inhouse recruiting.

All, good afternoon. I'm the Region VP of Sales for Securitas in the "South" region, but for full transparency, I'm a former Exec Recruiter (i.e. "Headhunter"). There have been multiple outstanding points brought up in this conversation. My stance is that there are far too many Headhunters willing to trade their integrity for income. Trust me, there is one truth in the recruiting world that comes back over and over: Karma is a b*tch. Individuals that involve themselves in this behavior almost always get exposed over the longer term. If they were truly exceptional and have switched from one firm to another, the 'Client' in this case would have maintained loyalty with them as the person representing opportunities on their behalf in the marketplace. It's a big deal to leave your brand to a Headhunter - tread carefully and realize that they are speaking on your behalf. Here's the flipside, however - in many cases, the Headhunter is left in a transactional scenario competing against several other Recruiters (and internal HR) to fill a position. Because the relationship is so superficial and each party doesn't truly get to understand each other (i.e. through direct access to the Hiring Manager, through a deeper discussion that goes beyond what's solely in the job ad, etc.), these things all too often happen. My advice to Headhunters would be to think longer term and not treat your Candidates or Clients like cattle. My advice to Clients (i.e. Hiring Organizations) would be to slow down and pick a small cadre of Exec Recruiters to represent them and their opportunities. Although cliche, talent is a huge differentiator and can create way more market advantage than systems, policies, etc. Get the right people in the right seats on the right bus and it's surprising what can be accomplished and overcame.

Its worth noting, when trying to understand headhunters that:

Recruiters work for two masters, candidates and companies, and at any moment in time, either one of them is driving the business.

When times are bad and jobs are scarce, companies are more in control. Every opening they let you fill for is just a matter of choosing a reasonable candidate from the many qualified resumes you have access to.

When times are good and talent is hard to find, the tail wags the dog, and each qualified candidate looking for a position is golden. The question is not if but where can I place my asset to get the maximum return. Open positions are a dime a dozen.

Also, as far as a 3-year non-poaching agreement that goes beyond just replacement cost, in my experience, in CA and NY, such agreements are difficult to enforce because they can be viewed as limiting the employees right to seek a better job.

if you take a job you thought was good, but then turned out to be crap, you might naturally complain to your recruiter, and ask what else is around.

For the recruiter to say I can't talk to you about that is unfair to the employee. Lots of gray areas here.

...Recruiters work for two masters, candidates and companies

Anyone who thinks Recruiters work for candidates is sorely mistaken. They work for those who pay their fees.

There's merit in both points to the extent that recruiters need candidates. That said, as 6 emphasizes, it is the employer who almost pays the fees so they would have the upper hand (just like advertisers do with trade magazines).

They work for those who pay their fees.

Like the way integrators should always work for customers.

But when you have an exclusive line that's in demand, you may choose your vendor relationship over any single customer relationship.

When the market is *up* and inventory is down, recruiters will maximize their stock by shopping your candidate to other possibly higher bidders, even while your offer is on the table. Personal experience.

But you are right they don't work for candidates, they work for themselves. They are brokers who are on the buy side AND the sell side at the same time.

Stay away from SS&C out of California. They do this consistently.

It is not a fair deal and it is not a fair recruiter either.

I know something about this topic as my wife is a top-notch IT recruiter hunting for Skype, Avast etc.. The comon practise (as it should be agreed in the contract) is not to hunt people from their clients. Even if that is not in written form, it should be a morale of that recruiter to respect the client and their needs.

The recruiter is in the business deal with the client and was hired to help with the hiring and building a strong team for the company. Once he/she starts to hunt from the client, he/she is definitely breaking the deal as well as the business morale. So there are no excuses for such behavior.

You should get rid of that recruiter, ask for the fine (which should be also part af the agreement - if is not, the recruiter should give you back the fee) and name him/her publicly if he/she doesn't give money back.

My wife usually signs agreements, where she guarantees $20,000+ to pay to the client if she hunts anyone from the company she hires for. She signs such agreement with no doubts or hesitation as she or her team would never do such thing. And even if this is not part of the agreement, she logically doesn't do that. It is like selling someone a piece of art, getting paid for it and than stealing it and selling it again.

Hey Peter, a couple of observations and questions.

When an employee starts to look for new employment, they often contact the recruiter who placed them in their current assignment, regardless whether they were placed 1 month, 1 year, or 10 years prior.

Because they are not in the 'headhunting game' the employee may not have even considered the possible ethical ramifications of such dealings.

Are you saying that your wife would refuse to work with these former placements regardless of how long they had been employed, if contacted by them? If so, what does she say to them, use another company?

Or does she only refuse to actively solicit them, but if they seek her out its fair game?

Is it dependent on the warranty period?

Does it matter if the client is no longer a client?

I had two staff recruiters that reported to me in a previous life, and spent more than a few nights in the pubs debating the finer points...

Hi there,

I was reacting to the exact example above, about a recruiter hunting the same candidate that he/she just took a fee for placing at the client's.

To answer your question I had to ask my wife :) She said:

"If I'm contacted by a candidate I placed to my client before: There is a difference between being contacted after one month and few years.

During first 3-6 months, there might be a serious issue between the candidate and the client and a recruiter shall help with to solve that (e.g. to find a different candidate free of charge).

After that time (and if I still work for the client) I explain the candidate that I can help him to find a new job, but I request the HR approvement first. Every candidate accepted it so far and most HR agreed. This the process, fully transparent for all parties, is what build the both business and personal relationships between me, clients and candidates."

Hollywood casting agents are really recruiters in disguise.

Maybe the best compensated too?

(I had some other point that I've forgotten.)

Most reputable recruiters/head hunters offer a 6 months or a new candidate/money back type deal.

Anyone hiring in this day and age and NOT insisting on this... Well they need to look at their HR policy.

I am not so certain I would blame the recruiter solely, though it is certainly unscrupulous. If it is that easy to poach an employee, there are clearly underlying issues within the firm -- toxic culture, pay that is not competitive, low morale, etc. I have noticed that, in the course of being recruited, the hiring company always wants to negotiate down the rate. Perhaps that is just good business, but if you are not willing to pay the rate someone else always will for the right person and it may end up being within the range where the recruiter has gotten paid. If those new recruits can be kept around by a good corporate culture, a reasonable workload for the pay, or other positive employee relation methods then poaching should not be an issue.

I discovered after hiring an employee on my team last year that the recruiting firm that found him invoiced us right after his start date.

At a previous employer, they only paid the recruiter after the employee had been with them for 6 months. In talking to some other colleagues that are recruiters, they said some of their bigger clients pay 25% on date of hire, 25% at 6 months, and the balance at 12 months. This is to prevent the recruiter from poaching employees they just helped place.

It would behoove employers in this industry to demand similar requirements of recruiters in this market.

Just heard from a colleague who had two new hires jump within a couple months, allegedly with the encouragement of the recruiter from the recruiting firm that found them. They have another 5 or so with less than 6 months, so there was concern.

So, get this, instead of flipping out on the recruiting firm, he hires their recruiter as staff!

Then they flip out! "It's a violation of our trust...", etc.

Now he doesn't have to worry so much about the other employees or the next batch in. Then, knowing him, he'll fire the recruiter.

Cause that's how he plays.

Just between us, this is incredibly risky behavior. It appears that he picked a low-integrity Exec Search/Recruiting Firm, hence their short-term behaviors. Perhaps this Firm offered to make the placements at the lowest fees as it's quite common for organizations to view Human Capital and/or their Recruiting Partners as commodities. Ironically, many internal HR/Recruiting Departments are rendered ineffective due to a poor employment brand in the marketplace, weak compensation packages, high turnover, poor management, etc. Either that, or the Client breached on the agreement in some way; a way that has led the Recruiting Firm to respond in an 'eye for an eye' fashion. Either way, both are incredibly risky - trust me as I used to run my own Firm and have seen these cases play out quite a few times.

The risk to the Client here is that his move of hiring the Exec Recruiter may backfire in the worst way possible. What I mean is that this Firm may incentive their Recruiters additionally by offering bonuses to those that recruit the most of your Employees away. I've seen mid-size companies entirely broken by siphoning the top 10% of talent, let alone the 30% - 50% that may be at risk in this particular situation. Losing your top 10% of performers can take years to recover; losing 30%+ can be check-mate. Literally engaging a team of up-and-coming 20-somethings (most in their first ever F/T jobs) and telling them to disable an entire enterprise isn't uncommon. Tech firms such as Microsoft, Google, Yahoo, etc. even instituted informal truces years ago to prevent all-out recruiting assaults. It's best to avoid the line of fire.

P.S. If I may mention, any Exec Recruiter that is capable of even being recruited away by a Client probably isn't worth their salt. Most that leave have simply been burnt out in the profession, but the disparity in income between being in-house for external is an order of magnitude. You can easily earn 3x - 10x the $$$ working externally. Just my $.02.

P.S. If I may mention, any Exec Recruiter that is capable of even being recruited away by a Client probably isn't worth their salt. Most that leave have simply been burnt out in the profession, but the disparity in income between being in-house for external is an order of magnitude. You can easily earn 3x - 10x the $$$ working externally. Just my $.02.

So let's say you are in the early phase of a ramp-up, enough that would warrant the exclusive attention of a single saltworthy agency recruiter for one year.

Assuming that the recruiting firm is making a profit, and not just the 10x compensated recruiter, what does that make the total fees for the year look like?

15x? 20x? the cost of a single in house staff person?

So paying 5x to the recruiter to come on staff would certainly be worth it to the company, and possibly the recruiter, that is if he believes he would still have a steady gig in a year, which he won't.

Is it dangerous? Yes.

But that's the nature of payback

Keep you posted...

Tech firms instituted an informal truce....

Proving once again that the only winners in lawsuits are the lawyers.

I know of at least one integrator who lost a key member of their staff to a recruiting firm. This key person, in turn, reached out to every member of the tech staff and several sub-contractors.

You mean, one guy got a job elsewhere and he brought in all his old buddies from his old company? Sounds more like a rats-fleeing-a-sinking-ship situation. When you have that many people willing to leave, you either have a morale problem, a pay problem, or both. either have a morale problem, a pay problem, or both.

Problem solved with a little more pay and a little more ale...

The situation I refer to is that one employee actually became a recruiter.

They contacted members of their old firm, offering to find employment at different companies, not the same company.

Of course, that new "recruiter" got a commission for each new employee they could place at a new firm.