What's best for you! Not for contingency recruiters. Not for retainer recruiters. And possibly not for your current employer, who'd rather not lose you to a better opportunity.
Early in your career, your self-interest neatly matched the interests of contingency recruiters. Chances are, one or more of them gave you invaluable help in entering the business world, and possibly in climbing the first few levels of the corporate pyramid.
But at or reaching for $100,000+, your interests are no longer quite the same as those of any recruiter...contingency, or retainer.
Sorry about that!
You're on your own now. And in this chapter we'll focus on your self-interest whenever the recruiter you're dealing with is working "on contingency"...whenever he or she gets paid only if you're hired.
Forget how special you are now.
Years ago you were a commodity in vast supply: a management trainee; a financial analyst; an assistant account executive or an AE at an advertising agency; a "member of technical staff in an R&D lab; an engineering manager; a plant superintendent; a computer programmer or analyst; a lending officer in a bank; a field salesman or a zone manager; a copy editor; an assistant or full product manager...I could go on and on, but you get the idea.
Early in your career, you were just another face in the crowd of bright young people striving to get ahead. You needed all the exposure you could get. So you were properly grateful to find a friendly "counselor" at an agency (which today probably calls itself an executive recruiting or search firm), who saw the good qualities in you.
This "counselor" sent your resume...and extolled your personality and "potential"...to personnel departments and middle-managers all over town. Finally, you landed the job you wanted. You appreciated your "counselor's" help, and you may have kept in touch with her for years. Maybe you got a subsequent job through her. And perhaps you've used her as a source of junior and middle-management people reporting to you, as you've moved further up.
Most of us who've climbed the corporate pyramid have warm memories of several fine contingency recruiters who touched our lives in a very positive way. Certainly I do, and I'll bet you do too.
Very helpful earlier, the contingency recruiter no longer serves your self-interest the way he used to.
Now you're at, or within striking distance of, the senior-management level. You're already earning $100,000+, or reaching for it. You've outdistanced the crowd. You now have an impressively responsible position. You've made a track record. Your resume speaks for itself. Remember the contingency recruiter saying, "Keep it on one page"? That was because you hadn't done enough yet to justify more. And besides, she was your spokesman in the Personnel Department.
Today you don't need an advocate trying to break down Personnel Department doors for you. And when it comes to contacting the CEO or any other senior executive who'll take the initiative in bringing you into a company, you don't want an advocate. You can write your own covering letter and submit your own resume. And doing so will be considered more straightforward and dignified than if you're served up on a platter by a headhunter with a financial stake in promoting an introduction.
Avoid having a price-tag on your head.
Whenever a contingency recruiter introduces you to a company, you arrive with a price-tag on your head...usually in excess of $30,000, if you're a $100,000+ executive.
It doesn't matter whether or not the recruiter has been specifically requested to offer candidates for an open position. The price-tag is firmly affixed. Maybe he's just taking a flyer and sending your resume with no prior request for it, and possibly no prior contact at all with the employer he sends it to.
Nevertheless, if it's the recruiter who draws the company's attention to you, you can't be hired without his being owed a fee. Standard industry practice is that such referrals are "solid" for at least six months. All incoming resumes are date-stamped and filed in the Personnel Department. And if two contingency recruiters submit the same person, the recruiter whose submission arrives first is the one who gets paid.
Racing You to Your Employment
Anyone paid on contingency has this objective: to receive a fee when someone is hired.
Ideally, the recruiter pursues her goal by securing a listing from an employer with a specific job that she and other recruiters are invited to try to fill. She then races the other contingency recruiters to fill the job.
But suppose a contingency recruiter...or a retainer recruiter who shifts opportunistically into the contingency mode...encounters an exceptionally desirable employee. Then, despite having no listed job that this employee fits, the recruiter may nevertheless decide to attach his or her price-tag, and race to all the companies this employee is likeliest to wind up working for. After all, new job openings occur every day. There may be one the recruiter doesn't know about.
Let's assume that you're not just good, but outstanding. You're one of those exceptional executives that companies will surely hire if they have an opening. "Seen is as good as sold."
Moreover, the list of companies in your industry that might want you is just as obvious as your excellent record and personal attributes. Those companies, of course, are the ones you'll logically contact first when you're interested in changing jobs. They're also the ones where you may already have your own personal contacts. And they're where, even if you're not already personally acquainted, a letter and resume from you may spark immediate interest.
Therefore, the contingency recruiter has no time to lose. Since you're talking to him, you're probably talking to other headhunters too. And soon you'll be in touch with the most obvious employers as well.
So he may immediately submit your resume to all the companies most likely to hire you. If he's ethical, he gets your verbal okay first; if not, he doesn't bother. Either way, he moves quickly, to get your resume submitted before any other recruiter does...and before you do. After all, if your resume is dated and in-the-file before his submission arrives, he'll be out-of-luck...regardless of who got there first. Therefore, he "covers" you at all the companies you're most likely to join. A few dollars worth of typing, copying, and postage just might produce a $30,000+ fee... or at least insure against losing one.
Would a recruiter be so brassy as to write and phone a CEO or another key officer he didn't already know personally?
Absolutely. CEO's and other senior executives I work with on a retainer basis have shown me this kind of mail many, many times. Moreover, their secretaries say it's often followed by persistent phone calls...especially if an opening has been reported in the trade press. Of course the more usual and circumspect submission will be to the Personnel Department in any company the headhunter normally does business with. There, he can't afford to overreach the people who give out the contingency listings of lower and middle-management jobs.
The Harm That's Done to You
What's wrong with the above scenario from your point of view? After all, you're not paying. You don't care who does or doesn't collect a fee. You just want to find the right job to advance your career. Isn't it a good idea to be introduced by a professional, who'll do everything possible to promote the idea that you ought to be interviewed?
No. The entree you achieve by personal contact, networking, or an impressive letter and resume you send is likely to be more, rather than less, persuasive than a headhunter's. The recruiter may have saved you some effort, but it's not likely that she's enhanced your image.
Assuming you get interviewed and hired and the headhunter gets paid, it's true that you haven't been economically hurt, since these days the employer always pays employment fees.
But the sad fact of the matter is that you're far less likely to get seen...much less hired...than if you'd arrived under your own steam, with no $30,000+ price-tag attached.
Behind-the-Scenes After an Unsolicited Referral by a Recruiter
Notice I did not say "by a contingency recruiter." Any referral that is not specifically requested by the employer is "on contingency," even if made by a prestigious retainer firm in a convenient lapse from publicly-professed behavior.
Step One:
Letter and resume arrive; perhaps followed by phone calls from the recruiter.
Step Two:
Material is duly filed in the central Personnel Department.
Step Three:
You make contact. Through personal contact, networking, or your own mailing. Or even a fortunate accident.
Maybe you meet Mr. Decision-maker on an airplane, or on the golf course, or at a trade show, or at your daughter's swimming meet...whatever kismet the fates send, or you can contrive. Impressed, he begins to think about meeting you in his office, with an eye toward potential employment. He doesn't have anything specific right now, and your background may be a little off-beat. But he's intrigued with you and thinks, "Let's have her in here. We can shoot a few ideas around, and I can at least pick her brains. Maybe nothing will come of it; even so, no harm done."
Step Four:
Mr. Decision-maker follows proper company procedure. He calls the personnel department first, as everyone is supposed to before scheduling a meeting that could lead to employment. Let's listen:
DECISIONMAKER: "Have we got anything on a Judy...or more likely it's Judith... (fill in your last name)? She's over at Stodgy Corporation. I met her last evening and she impressed me. I don't exactly have an open slot and maybe I won't be too interested after I know her better. But then again, I've been thinking of several ways I might do some reorganizing."
PERSONNEL ASSISTANT: "Oh, yes, Mr. D. I've found her in our file. Judith A. (you!)... the Stodgy Corporation. Yes we have her full resume here."
DECISIONMAKER: "HOW could we? I just met her for the first time last night."
PA: "The resume was sent in by a Mr. Ralph Quick of Quick Associates, a headhunter firm...letter dated the 14th and we got it on the 19th. Mr. Quick also phoned us, and I see he also sent a letter to Mr. Big, which Alfred sent down here for us to file."
DECISIONMAKER: "Well, what does all that mean to me? I met her at my daughter's swimming meet. Diane beat her daughter by just one second. They were both awfully nice congratulated us as we were leaving...and she and I got to talking. No connection at all with Quick Associates, whoever they are."
PA: "They're a pretty decent headhunter firm, and we've listed with them from time to time. I think they hit with a manager for our New England Region a year or so ago. I suppose that if anything did develop between you and Ms. (you!), we could call them and tell them about the swim meet and all and maybe they'd..."
DECISIONMAKER: "No, never mind. It's not worth the trouble. I really don't have my thinking squared away yet. Bye now. Have a nice day."
Sandbagged! And you never knew what hit you. The headhunter didn't know either. Maybe he's a very nice guy...perhaps a personal friend. He might even have backed off, rather than jeopardize an opportunity for you.
Too bad you had a price-tag on your head.
There are three circumstances under which you might be submitted "on contingency."
And in all three, you're better off getting to the employer on your own.
Let's take a close look at your self-interest in every possible situation where you might have the alternative of introducing yourself...or being introduced by a recruiter operating "on contingency," whether he or she is normally "contingency" or "retainer."
Possibility One: The employer has NOT listed the position with the recruiter.
Submitted "on contingency," you arrive with a $30,000+ price-tag on your head. Nobody asked for you. And now the company is $30,000 less interested in seeing you than if you'd submitted yourself.
Possibility Two: The employer HAS listed an opening with a fine and highly-ethical contingency recruiter.
Now we've got a much closer case. However, I think you'll agree that you're probably better off to reach the employer on your own...having had nothing to do with the contingency recruiter, and not knowing that he had a listing for the same job you hear about and apply for on your own, or accidentally find open through personal contact, networking, or direct mail.
On the negative side, you won't have the recruiter advocating your candidacy. But is he primarily in touch with Mr. Decision-maker or with the Personnel Department? And of course, if you're ever discussed with the recruiter (not likely, because he's biased), he may "faint-praise" you and plug his people.
But you cost zero, and the contingency recruiter's people have all got $30,000+ price-tags on their heads. Even without advocacy, you can count on an objective evaluation by the employer.
The situation would have been different several years ago, when you were a recent graduate, or a junior or middle-manager trying to get a leg up after just a few years' experience. Then you may have needed advocacy, just to be considered. Today you and all the other candidates at your level have track records that can...and will...be objectively compared.
Let's even be a little cynical. Not having to make a capital investment of $30,000+ to acquire you, Mr. Decision-maker can feel freer to try you out. If you don't succeed, he can dump you, without having $30,000 worth of egg on his face. You have a political, as well as an economic, edge.
This happens much more often than you would think.
Sometimes a contingency recruiter may submit you without knowing that a retainer search has been assigned. You're a nifty candidate, so Mr. Contingency attaches his price-tag, and races to your likeliest employers. Or Mr. C. reads in a trade paper about executive switching companies, thereby creating an opening at the former company. Bang! He's in touch with you, and your resume is on its way.
On the other hand, perhaps the recruiter operating "on contingency" does know that a retainer recruiter has been engaged...and chooses to involve himself anyway. Consider the following examples:
Perhaps a contingency recruiter regularly gets lower and middle-management listings from a company. He "hits" well, but the company assigns its highest-level openings to retainer firms. Knowing of an ongoing retainer search, Mr. Contingency "lobs one in from the sidelines."
Or perhaps there's a "shoot-out" in which several retainer firms compete for a search assignment. Here are two ways I've personally seen unethical retainer firms "go contingency" in an effort to snatch victory from the jaws of defeat:
- Write the company expressing regret at not being chosen, and enclosing resumes of "some great candidates we had lined up for you."
- Call the employer after three or four weeks have gone by, ask if the job has been filled (of course it's too early), and offer to do "a computer run, to see if we come up with anyone your other firm isn't showing you."
As a retainer recruiter myself, I can tell you that I and most other retainer firms would never even imagine such unprofessional behavior. Yet, as the "shoot-out" winner, I've personally witnessed both examples (I could never have dreamed them up) as performed by two of America's most famous retainer firms. Incidentally, I'm pleased to report that both failed to make any headway. But they must succeed sometimes, or they wouldn't try such gambits.
Whenever there's an on-going retainer search, for which the employer is paying the full fee (in both instances above, more than $10,000 per month over a three-month period), you're at a monumental disadvantage, if you get "lobbed in from the sidelines" on contingency. The $30,000+ price-tag on your head is in addition to the $30,000+ being paid to the retainer recruiter. Hiring you will cost over $60,000! You're like a doubly-inflated basketball the headhunter is trying to slap through the hoop.
Obviously, you're better off without a price-tag on your head. So you really should develop direct contact with all the companies of potential interest to you. That requires some effort. But your reward is being an unencumbered prospect for employment with the companies you consider most attractive.
Indeed, why not cultivate good professional rapport with all the major competitive companies in your field? Someday you may be interested in working for one of them. Or you may ask some of their people to work for you.
A Proper Contingency Referral Helpful to You and to the Client
But now let's suppose that "out of the blue" a contingency recruiter who has a definite listing from a company you admire calls about the position and persuades you to pursue it. You didn't know the opening existed. Or if you did, you previously chose not to follow up.
Having (1) had a true listing and (2) persuaded you to pursue it, the contingency recruiter has done both the employer and you a service, and she deserves to be paid.
You must, in good conscience, pursue the opportunity only through her. It's too late to contact the employer directly. Indeed, the employer wouldn't respect you if you tried to go around the contingency recruiter at this point.
Moreover, because the contingency recruiter has a bona fide listing, there's a good chance that the employer may receive several candidates from her and discuss them with her, thus generating valuable feedback that the recruiter will share with you...another benefit to both you and the employer.
A good, ethical contingency recruiter, under these circumstances, is doing what a good retainer recruiter would do. This is particularly true if the contingency recruiter has an exclusive listing and there are no candidates from other contingency recruiters, and no "no-price-tag" candidates who reached the employer directly. Under such ideal circumstances the contingency recruiter becomes a full and objective participant. She's not kept in the dark about candidates from other sources, because there aren't any. And she's not presumed to be economically biased. Every candidate came from her, and she'll be paid regardless of which one is hired.
Now we'll assume that the contingency recruiter...or a retainer recruiter switching into the contingency mode...has not been in touch with the employer before calling you. He's merely following up on an item in this morning's edition of your industry's trade paper. Let's monitor his call to you:
CONTINGENCY RECRUITER: "Have you heard that Bob Smith, the Marketing VP at Acme, has resigned and is going over to Zolo as President?"
YOU: "NO, that's interesting news."
CONTINGENCY: "Well, I don't think there's a better person in the industry for that job than you, and I'd like you to be a candidate for it. What do you say?"
YOU: "Absolutely! I've always admired Acme and the President over there, Hal Clay...brilliant, and a very nice man. Count me in. I'd love to be considered."
CONTINGENCY: "Great. I knew you'd see it that way. I'll get back to you."
Too bad! You just got a price-tag on your head. Unless Clay has set up a barrier to unsolicited referrals, using his secretary and a simple form letter, you and any other obvious candidates Contingency can line up are about to have your resumes mailed to Mr. Clay with a pushy letter from Contingency, who has not been asked for his assistance.
Unfortunately for you, Clay has assigned Richard Retainer to do a fee-paid search. Moreover, Clay doesn't yet have his secretarial defense system operating.
So Clay is handed Contingency's letter and the enclosed resumes. He calls Personnel, and Contingency is identified as "a good resource, who hits pretty well for us on sales jobs and some middle-managers too; really knows our industry and where the bodies are." Rather than offend Contingency, Clay sets up his defense system for the future and writes Contingency a note informing him that Retainer has been engaged to do a search, and that no further candidates should be proposed by Contingency, "although these will be considered."
Then, along with a list of names he's personally thought of as prospects, Clay gives a copy of Contingency's letter and its five enclosed resumes to Retainer, saying:
"Check these out, if you wish. I'd be willing to pay the double fee if you find that one of them is the best we can do. I don't know any of these people from Contingency except (you!). He'd have been on my list too, but you've got his full resume in this stuff here. He's young...maybe a little brash...but he appears to have lots of drive and creativity. Also some good common sense, and that's not easy to find. I talked to him at his company's booth at Product Expo last winter. I'd definitely be willing to consider him if you think we should."
Did you ever hear from Retainer?
No? You're not surprised, are you? It's inconceivable that Retainer would want his $30,000 project "completed" by a candidate from Contingency...thus making Retainer's efforts superfluous, and doubling the cost of filling the job to $60,000.
Of course, all this is happening before you and I have finished our look at the "Rites of Passage." You'll be handling things a lot differently after our guided tour through the land of headhunters.
You'll never again bend over and let any recruiter...contingency or retainer...paste a price-tag on your head, unless he passes your rigorous testing to make sure he has an appropriate client relationship.
You have no obligation to serve as a lottery ticket just because a recruiter calls you on the phone. If the company hasn't asked him to submit candidates, you and he are on the same footing. It's up to you whether he sends your resume or you send it yourself. Certainly the straightforward approach is more to your advantage, now that you're a recognizable executive at, or reaching for, $100,000+.
Here's the letter executives use to fend off unwanted contingency referrals and maintain their right to see and talk to whomever they wish, without having an uninvited outsider try to interpose fees of 25% to 35% on what would otherwise be free speech:
Don't fall for the old "let me represent you" line.
There was a time when "headhunters" did represent potential employees, but they no longer do. Prior to the early '60s, the people who today are contingency recruiters and are paid by the employer, used to label themselves "personnel agencies" and were paid (usually 6% to 12%) by the people for whom they found work...just like the Hollywood agent who, for a 10% to 15% fee, represents Tom Cruise or Michelle Pfeiffer.
A person who represents someone else is called an "agent" and the person represented (called "principal" or "client") is always the one who pays. And the fee, of course, has to be affordable. You wouldn't even consider paying 25% to 35% of your first year's compensation to be "represented," and Tom and Michelle wouldn't either!
True representation is intended to help get a person hired, not discourage it. Only if you were paying would you be "represented." Otherwise, any "push" you get from a recruiter is more than offset by the drag of the $30,000+ price-tag she applies. Neither the dictionary and legal definition of "representation," nor common sense, allow any recruiter...contingency or retainer...to imply that she "represents" you. Don't you let her imply it either.
So, when a contingency recruiter calls, you must find out unequivocally, that he or she already has a firm agreement to represent the employer, who's promised to pay if and when one of the recruiter's candidates is hired. Notice that the agreement must apply to the specific job being discussed; previous deals with the same employer are irrelevant. Remember, if the recruiter had been able to obtain a legitimate listing before contacting you, he would surely have done so. "I didn't have time" or, even worse, "I came to you first" is no excuse.
If you learn...and you'll probably have to dig to get a straight answer...that the recruiter does not have a specific agreement with the employer about the specific job he calls and asks to "represent" you on and then there is only one answer:
The recruiter you know may give you more trouble than the one you don't.
Just as crime statistics show you're more likely to be murdered by a family member or an acquaintance than by a stranger, you're also more likely to be hurt by a recruiter you know well than by one you don't know.
Opportunistic handling of the people they know tends to become a habit pattern among some of the recruiters who specialize in a certain industry. They watch the trade press with eagle's eyes, and have the ears of a bat when it comes to the rumor mill. And in incestuous industries and job categories with lots of movement from company to company,* it's not surprising that recruiters come to regard almost every "match" as one they should have made.
It's just a short step from reading with disappointment in the trade press about job changes made without any recruiter involvement where the recruiter happened to know the new employees...and by name at least, the employers...to the point where the recruiter feels that:
- This industry is my domain, where I know the people. They are my inventory...built up through the years.
- Therefore, whenever people I know move, whatever companies they go to owe me a fee. I'm entitled!
- I must act aggressively to make sure I don't lose out on any of the fees I'm entitled to.
- Therefore, whenever an obvious opening occurs, I must line up and "submit" all of the people most likely to wind up in that spot.
Earnestly feeling approximately as described, industry-specific contingency recruiting firms...or more often today hybrid contingency-and-retainer firms...seem almost innocently oblivious to the disadvantageous position in which they put unasked-for "candidates" in relation to others with no price-tags on their heads.
Self-Interest: The Bottom Line on Contingency
Recruiters for the Executive at, or Reaching for, $100,000+
When it comes to referrals involving yourself as the candidate, the situation is clear. You're always better off getting to the employer entirely on your own, unless the contingency recruiter has:
- A valid listing from the employer (not obvious),
- which is exclusive (no other recruiters...retainer or contingency-are involved; also not easy to know), and
- the job is one which you wouldn't have pursued if it weren't for the contingency recruiter's persuasion
Above all, don't fall for the "let me represent you" line. Unless you're paying the $30,000+, and therefore are not placed at a disadvantage relative to the "no-price-tag" candidates, you're in the best possible position when you get to the employer on your own. This is usually true too, although less obvious, with respect to retainer recruiters.
