10 Secrets Headhunters (Usually) Don’t Tell You – Part 7 of the series “Choose Me, Hire Me!”

Top Secret!

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Headlines blare: “Why You Should Hire Me.” While times may be challenged, there is work (and jobs) to be had. I’ve been in the people (and teams) coaching business for over 25 years , both as a coach to managers and teams and also as someone directly responsible for hiring thousands of people through roles running large staffing / recruiting operations. From that experience I have a pretty good sense of how and why people get hired. “Choose Me, Hire Me!” is a nine part series on the ways people can improve their chances of being hired. This is Part 7.

Even in a down market, jobs are can be hard for employers to fill for a variety of reasons and some form of search agency is utilized: hard technical requirements, over choosiness on the part of the employer, requisite discretion when replacing an unknowing incumbent, or the job is of such a nature or level where candidates are unlikely to come forward themselves and need to be surfaced directly .

While some firms (Charles Schwab, and Dell come to mind) use in-house recruiters who act as outbound search agents, many firms use outside contingent or retained search firms to supplement any job posting activity .

The fee difference between the two is usually simple: contingent firms get paid upon placement of a candidate while a retained search structures payments generally at 1/3 rd of fee at commission, 1/3 rd 30 days later, and the final 1/3 rd around 60 days into the search. Retained firms are typically exclusive arrangements (one search firm with one placement) while the number of firms engaged for a contingent search can range from one to ten or more. Fees are negotiable and generally are (assuming no discounts) 30-33% for retained firms for estimated total compensation: $45,000 for a candidate making $150,000 at a 30% fee. Contingency firms may range a little less, with fees of 20-30% typical. Exceptions and hybrid arrangements abound .

Some companies utilize a “preferred provider” arrangement in an attempt to reduce the number of search firm vendors with whom they deal, and get reduced fees in exchange for hypothetically higher volume to the firms. My experience with Barclays was that it was more “hunting list” for the search firms than a preferred list: Barclays Capital in New York at the time had a “preferred” roster of 53 firms. My sense was that firms who had been “fresh” in the market – i.e. had recently done search work for a specific area or role – were more interested in doing work that came up that was similar to their earlier search work at a reduced fee. Those that had not worked in the area generally ducked the assignment unless they had bandwidth they wanted to fill.

From having a number of people I can call friends and colleagues in the search business, as well as from running large staffing operations, here are a few things that many job candidates miss:

  1. Search firms do not get paid to place candidates . Search firms get commissioned and paid to fill jobs. It may or may not be with the best-qualified candidate but rather the candidate whom the employer decides they want to hire. You are of interest as a candidate as long as you are a viable placement: if you’re not, take a back seat.
  2. Search firm execs cannot recruit you for other roles if they have placed you in your current role . Smart firms who can will place “no touch” provisions in search agreements to prevent firms with whom they’ve done recent work (typically 12 months) from recruiting or placing candidates from that client firm. In addition it’s generally considered unethical to for a search firm to recruit a candidate they placed.
  3. Search work is heavily transactional, and less relationship based at the candidate level. While I know a number of really good professional search execs who do take their time to talk to candidates, the structure of the business (and generally search firm compensation) guides search people to fill jobs so they can free bandwidth for other searches – not have coffee and offer advice to job hunters.
  4. A retained (versus contingent) search does not mean that a job gets filled . When I ran domestic staffing as a second role for Barclays Global Investors my team’s “close” rate was 93% for 30 retained searches. The typical close rate for retained searches has been rumored for years to be around 70%- meaning that firms paid for searches 30% of the time that resulted in no hired candidates. Both employers and search firms bear responsibilities – more the former than the latter – for searches that don’t close and examples from my BGI stint tell why: one of the “failed” searches was the result of departmental restructuring that eliminated the need for the role, and in another case, a British HR colleague complained that you could not “find decent Organizational Development professionals” in the US and commissioned a second retained search out of the UK for a placement (relocation, travel, et al) in the United States.
  5. The search firm’s knowledge of what’s going on with the client may range from full knowledge to little to no knowledge . Good operational partnerships with companies for search firms are hit and miss, and they typically occur when you have a close working relationship between the search firm and whomever is on point internally for the search. At one firm with which I’m familiar, I saw a senior line exec freelance and hire a candidate totally outside of the retained firm’s search process and without any knowledge of the search firm they had retained. (The same senior exec, as Madeline Albright might note, exhibited cojones and channeled the Queen from Alice in Wonderland beheading somebody who inadvertently congratulated the search exec on the placement – not knowing that the search exec had been de-looped from the process.)
  6. The search process is frequently bumpy. The process typically moves in fits and starts, influenced by travel schedules, general availability of candidates and interview teams, and business operations. Most searches move slower than advertised, and the internal machinations around candidate selection are frequently not predictable.
  7. Job specifications are not the most important element in the search process . While meeting most, if not all essential job specs are important, the chemistry involved – particularly at more senior positions – is critical. One head of a $13 billion operating division I know was convinced that he got hired for the golf shirt (featuring a certain golf course) he wore at the off-site interview rather than any particular skill he had. While he was really talented, and a good exec, he was also probably accurate in his hiring criteria assessment.
  8. It’s a small world . You can run into peers from work and colleagues in your profession in interview waiting rooms, and you may be interviewing for the same job. People who may have interviewed you may be people you interview later for a role you’re filling. At a minimum, be polite with people: karma works in interesting ways. In addition, firms typically keep notes on their experiences with candidates. Behave badly, interview poorly, and otherwise blow it and it’s likely sitting in the firm retained for the works database.
  9. It’s a big world . As noted in Part 6 of this series , referencing can be hit and miss. I have interviewed with people who a few years later had no memory of the meeting. People who blew up at one firm ended up getting hired someplace else, and even though the blow-up should have been common knowledge,  it was not. Behaving badly on a search involving one firm will seldom get communicated to another search firm since ethics, confidentiality practices, and competitive spirit deter search firms from swapping stories. Moral of the story: avoid assuming anything and yet assume that people know everything.
  10. Staffing / HR departments at times don’t know what’s going on with positions. When I ran staffing at Chiron, my first day-on-the-job answer from my recruiting team to the question “How many openings do we have?” was “north of 150 but probably less than 300.”  While many firms may have a headcount hiring control process, it is not uncommon for hiring managers to retain their own search firms with a variety of different terms and search strategies deployed to find and place candidates – all outside of any HR/Staffing practices or guidance.

All the of the above continues to suggest to me that doing the basics – showing up, doing your homework, being clear about who you are by information interviewing and networking, is the best way to advance your way to a (new) job.

Next: It’s getting late at the Candidate Pub: Part 8 – Last Call


Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, new role, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy of KnowledgeCrush.