Drue De Angelis' Recruiting Blog


Challenging the WAY we Search for Talent

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Search Firms: Big or Boutique? Flash or Function?

I believe that a constant in our society is that Talent drives innovation and execution. Talent is the key ingredient in all successful companies. Every successful venture has either a single talent or a group of talented people behind it. I don't know many people who would argue this point. My question is, "Why don't more companies and HR types consider the talent of the prospective search consultant in their equation before they hire a search firm? I have observed that many companies take the "easy" way out and hire a search firm based upon a name brand alone. I have to laugh every time that I hear another company announce the hire of another major "international search firm" to conduct their search. One of my guilty pleasures in life is getting the call from the VP of HR asking if we can do a search that one of the "big-boys" has had for six to nine months with terrible results. They fell for the "pomp and circumstance" that the big firms can do during their board room presentation. Here's the routine: send in the ex-CEO and an SVP or two to pitch to the board and close the deal. If that were all they had to do, bravo! Unfortunately, that is the easiest and most predictable part of the whole process. The real meat of the process happens behind the scenes and more than likely, the people who sold the deal have no exposure to it. There are a bunch of "greenhorns" who do all the candidate sourcing, recruiting and vetting. The original "pitch partners" have nearly no exposure to the most important aspect of the search. After you've identified the potential executives, selling them on the opportunity and getting them to the point of willingness to explore a new opportunity is the most elusive part of the search.

So, what are these companies paying for if by signing on with a big firm, they have underlings doing the majority of work? I would guess that they pay for the high salaries of the guys who close the deals and then of course the large overhead of that organization and its stock holders of course.

Don't get me wrong; I enjoy coming in and saving the day and doing the clean up job. I just can't help but wonder why these HR types can't figure this out before they waste a full fee on one of these failed searches.

Alright, so let me offer the HR folks some advice. Do yourself a favor and don't fall for the flashy presentations put on by these "stuffed suits." They will wax eloquent about the process, but more than likely have very little to do with it. Ask very specific questions about what happens beneath the bullet points on their "proprietary process" slide. Who will conduct each aspect of the search from candidate identification to recruiting calls? Who is the one who will "sell the dream?" And before you take their answers as truth, understand that they are not paid to do the grunt work.

Let's face it, even though it isn't necessarily the best approach to the Executive Search process, there is comfort there and little perceived risk in going with the name brand. If it fails, at least they can say that they went with on of the big boys. I wonder why more HR executives don't take a more hands on approach to vetting the search firms? Perhaps I'll never know...

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The Importance of Picking a "Great" Client

As a Search Consultant, your success is largely dependent upon the quality of your clients. Contrary to popular belief, any "paying customer" isn't necessarily a client worthy of partnering with. Anyone who has been in the business a while learns this lesson, usually the hard way. We've all accepted searches from clients only to later regret it. What is the key to avoiding this regret? The key to avoiding the heartache is being honest about it and thinking about all parties, including the person you intend to move to this new company. You have to be honest with yourself first and foremost and not play games. Sadly, many people lie to themselves and convince themselves that everything is copacetic, later to face the reality that they ignored obvious signs that they should have let it pass. I have justified it to myself by using the old phrase, "one man's trash is another man's treasure." The reality is that I put myself into a terrible position to attract someone to a company that is not well regarded usually for good reasons. A "greater fear" casts out a "lesser fear" and the fear of financial hardship can tempt us to accept a search with a bad client. Unfortunately, this usually ends badly for all parties. If you accept a search knowing that the company's value proposition stinks, inevitably, you are going to be very sorry! Nothing is worth accepting a bad search and getting stuck with a "dud" of a client. If a company isn't in a position to attract the caliber of talent that they want and are convinced they can hire, you are putting yourself in an un-winnable position. By accepting this search, knowing that the company has a poor reputation or during the exploration phase you find that the person to whom the new hire will report, is not a good person, you have put yourself in a classic conflict of interests. You are about to take someone out of a good job and put them in a bad situation. They will not love your for that, and why should they? You will have put your own needs before theirs, which is a misuse of your responsibility. Not only is there a very high probability that the candidate will back out late in the game, if they do accept it, and later regret it, you will develop a reputation as someone who doesn't care about the people you place. Furthermore, you may have to replace him or her when they quit. Trying to recruit another candidate of equal caliber to replace them knowing that there is a problem within the company is a misuse of your power and something I hope you will never do. How do you think that will affect your reputation in the marketplace? Will you be seen as an opportunist who doesn't care about the people you place?

It is critical that you select a great client so that your career is one that you can be proud of. To do this, you must make sure you diligently vet your potential client beyond their "willingness" to pay your retainer. Take time to get to know this potential new client and their team. Investigate their products or services and honestly evaluate their "Value Proposition" and the "draw" that brings with it. If you believe in the people and the opportunity, and you have confidence that you will be doing someone a favor by extracting them out of their current job, and placing them there, go for it!

If not, walk away and don't look back.

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Don't you Dare "Interview My Candidates!"

It's one thing to convince a new client to abandon the old way of engaging a recruiting firm and embrace the best way to conduct a search by retaining us, and it is still yet another thing to get them to dispense with the old mindset of "interviewing" the potential candidates that we bring them. Their default is to have the standard "behavior based" interview questions and ease into increasingly complex follow up questions to really vet them and see how they respond under the pressure of the moment. The problem is that if they conduct that type of interview, they will turn the person off. I often tell my clients, please don't interview this prospect. Your job in the first call is to sell the dream. Tell them why you joined the company and what still charges you up about being part of the company. Talk to them about your vision of where you plan to take the company. Your primary goal is to get this person excited about the opportunity. Most recruiters don't know what it's like to be recruited, so they miss a major factor in the recruitment process when dealing with what I call a "prospect." this is someone who you've networked to find plugging away in their job and they are very happy where they are. Most recruiters, once they hear this, turn the call into a call for referrals. But a good recruiter will engage their curiosity to the point that they are "open to an exploratory conversation with your client. I have found these to be some of the most incredible people to place. They don't have a resume on the Internet, nor have they even updated it in years. It will take a phenomenal opportunity to attract this prospect and engage them as a candidate.

If you are lucky enough to bring this person to the table for an "interview," your client BETTER NOT INTERVIEW YOUR CANDIDATE, or they will be turned off and the door will close.

So it is not merely enough to convince your client that working on retainer is better for them than contingency. You have to prepare them for this on advance.

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Top 3 Reasons NOT to Hire a Search Consultant

I've been pouring over the HR blogs since starting this blog recently and found a lot of posts with the "10 Top reasons for this" and the "Top 24 reasons for that." So taking the lead of the various pundits on the Interweb, I've decided to throw in my two cents. Since it seems like all of us Executive Search folks are trying so hard to convince all the "would be" clients to trust us and become our clients, I thought I would throw them a bone. Here are the Top 3 Reasons NOT to hire an Executive Recruiter:

1. The Internet - Let's be honest. With the prolific tools on the internet, you can find "Active Candidates" on your own. These are people who have posted their resumes on job boards. You don't need to pay a fee to a recruiter when they will likely be sifting the same sites that you have access to download all the recent resumes. (Which by the way is NOT what any self-respecting, competent recruiter does.)

2. Your Company's Weak Value Proposition - Each company has a Value Proposition to offer. This consists of Products or Services, Culture, Opportunity for Growth and Compensation. If the first three are overflowing, then the compensation can be average. If these are Average, then your compensation has to be INCREASED in order to draw in the best people. If your company does not or CANNOT be flexible in the area of Base Salaries, Sign on Bonuses and other inducements to draw in the best, then go back to #1 and stick to the "Active/Internet Candidate Pool."

3. Your Company's Rigid View of Hiring Talent - If your management team is not sophisticated enough to know how to recruit and interview people who are NOT actively seeking a new job, then you will Turn Away the best people and waste a ton of time. Sometimes it isn't the management team's fault. There are some companies where the HR Dept. dictates the hiring process to the management. As the government continues to heap on more regulation, it puts a legal burden on companies to enforce compliance of "great-hire killing" policies. This is a big turn off to a lot of talented people who see that their new job, were they to accept, would be frustrated by these same policies.

So, if you are a corporate HR or Hiring Manager and have been frustrated by the inability to execute searches effectively by hiring extraordinary people who have long-term staying power, then you are beginning to understand that to win the War for Talent, you have to be flexible and creative. You must tailor your recruiting approach to the individual prospects that you desire to hire, rather than making them fit into your little box.

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Is there such a thing as an "Executive Recruiter" who also does "Staffing?"

A common phrase on many Recruiting Companies' websites today is "Executive Search and Staffing," but is that really the true?  Let's think about it for a minute. If your firm does "Executive Search," your fees are quite large. So why then would you do a search for a position that pays a small fraction by comparison?  I believe that recruiting firms are essentially limited to whatever the lowest form of search that their websites promotes and THATS it!  If they are a Staffing Company, they may occasionally do a "Permanent Placement," but it isn't what they do regularly. Oh sure, they wish to one day do Executive Search, but they don't. It would be as if a Real Estate agent who brokers High End Homes and they dabbled in  studio apartment rentals? It is one of the Big Fibs of the industry. With a Wink and  Nod, everyone puts the language of what they hope to become one day. However, there is no way that anyone who tastes the "Juicy Steak" of Executive Search is going to settle for the "fast food" of Staffing again! 

I honestly have nothing against people in the staffing business. It is an honorable business. It just isn't Executive Search, and it has to be called what it is.  As I have been saying for a while, the industry needs to have very clear distinction between the different types of Staffing, Contingency Recruiting, and Retained Executive Search. There is a stark contrast between these so let's stop blurring the lines. People get upset when they are confronted by this truth, but it will help everyone if we demystify it and remove the ambiguity surrounding this issue. They actually have very little in common.  

Let the rants begin... 

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A Peculiar Perspective from a "Would be Client" Part 1

Today I received a call from an Executive Assistant with a $160mm Medical Device company asking if I had 30 minutes today to speak with the President of the company. Upon returning the call I was on the phone with the President within seconds. He told me that he was referred to me by a CEO who I had placed a few years ago with another Medical Device company and whom he had previously worked. He shared with me the critical nature of "confidentiality" and I reassured him that I understood the sensitivity of the situation. He went on to describe the profile of the ideal candidate to replace the incumbent. He used all the typical cliche's one uses to describe the "ideal" Vice President of Sales. One who can really impact the organization positively and "advance the ball." This search was right in my wheelhouse and I assured him that it was a search that I could deliver on effectively. I described my background to him to allow him to gain comfort with my knowledge of his space and my ability to identify who they need quickly. He was asking all the right questions so I explained how I work. He was obviously in a hurry to get this moving as soon as possible. He was in such a hurry to get this search going that he asked me to forward a copy of my agreement so that he could send it to HR for approval. What he didn't know was that I had actually conducted the same exact search for the same company on retainer exactly two years previously. After I presented my candidates and they were each interviewed, they ultimately hired an internal candidate for the role. I explained that a few months ago I placed the VP of Sales of a direct competitor who is almost identical in size. When the call ended, I was under the distinct impression that this was a "done deal." Within 90 minutes my phone range again only this time is was the VP of HR. She was very typically stiff and and all about business when she began asking me to explain some of the details in my agreement. She said that she wasn't sure if her President really understood that my agreement was a "retained search" and "confidential." I explained that this was the only way that I worked and referred to the previous search that I had conducted two years ago and she informed me that she had a copy of my original agreement from two years ago. She explained that her President had "other contingency firms" working on it simultaneously due to the urgency of the project.

She then began asking me specific questions about my fees and terms. Usually this is what I would call a "buying sign," but I sensed that she was merely trying to work me down. Since she told me that her President was already working with other firms. So, here is where I had a decision to make. Either I try to sell her on all the merit behind my fees and my terms, and I did that to some degree. However, I was convinced that the President was the decision maker , so I decided to tell her that I should speak with the President to explain my terms. I have been down this road before several times and I am convinced that it is far easier to work from the Top Down than up.

Once again, we are dealing with an executive who fails to understand how a contingency search undermines his process and severely compromises the outcome. What he can expect from having multiple contingency recruiters working on this search is this:

A. The Same Candidates May be Presented by Multiple Recruiters - Possibly costing double fees or potentially legal fees.

B. Candidates Misrepresenting themselves - Because they "Need" your job.

C. Only Accessing "Easy to Find" Candidates - Most of the best people will never even hear about your job.

D. You Have No Commitment or Accountability from your Recruiter

E.- Z. What other potential problems does a contingency search bring?

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Why so Many Recruiters Burn-Out or Fade Away.

Here is an Irony for you: The Contingency Recruiting Industry has the Highest Turnover Rate of any industry. It is a well-kept secret because of the obvious implications. With an approximately 90%+ recruiter turnover within the first year, recruiting has to be one of the toughest things in the world to do, intellectually speaking. So, I'm not comparing it to the military or being a fireman or police officer, but in terms of the amount of disappointment that a person experiences at work. Many smart and capable people who attempt it end in ruin. I actually had a grown man who worked for me for 6 months run out of my office in tears due to the continual defeat that he experienced! It is not for the faint of heart. Not only are you making hundreds of "cold calls" each day, almost no one wants to talk to you on either side of the desk, company or candidate. As you dial over and over and over repeating the same pitch, which is often read from a script, your mind grows more numb with each voice-mail you leave. "Smile, because they can hear your smile." "Don't be too monotone." "Don't ramble on too much." "Leave your phone number twice." "Don't unload the truck, just give them enough to whet their appetite." and the list of thoughts goes on and on as you drone on with call after call. You already feel less like a professional recruiter and more like a "Telemarketer" in a "Boiler Room." Is there any less respected job? Before long you feel like no one wants to talk to you, unless they're unemployed, and those folks can't help you reach your goals. If all you do is talk to the unemployed, before long, you'll be one of them. Out of every 100 calls, you hope to catch 25-35% live so you can actually have a conversation. Of those, very few will have any interest in what you're "selling." When you crunch the numbers, for every 100 calls you make, strikingly few are meaningful. You finally have some good things happen and get a Job Order. Now you work on your pitch so you can start recruiting! You're so close and yet so far away... After putting together a long list of potential candidates to begin the recruiting campaign, you're ready to start down the list. Voice-mail after voice-mail goes unanswered until you finally get someone on the phone. You've made 50 calls, spoken to eight living people and none show a sincere interest or are close to the mark. Day two, three, four and five of the same pitch and the same voice-mail left 200+ times with little to no results. The only people interested in the job don't meet the minimum requirements for the role and you're beginning to feel despair. Another week goes by and you can't figure out why it isn't working. You've changed your pitch around to see if it will produce different results and yet nothing meaningful happens. Three weeks into the search and you finally have two to three people who are qualified and somewhat interested in the role. You waste no time calling and presenting your top three candidates to the hiring authority and what happens?

A. They inform you that they already have a finalist candidate even though there was no mention of anyone in the process during your 30 minute call when you go the job order

B. They inform you that the position is now "on hold" indefinitely

C. They inform you that an "Internal Candidate" is now slated for the role

D. They never return your call

Sound familiar? All that work and you never even got to present your "body of work." Bear in mind that you never even got to the interview stage. The interview stage has within it a myriad additional opportunities to fail. But you were Dead on Arrival and so was the last three weeks of effort on this search. This is one of the reasons that recruiters are so darn "pushy." You have to make sure that they are not going on a wild goose chase that will cost them time and money and perhaps even their job. I have observed recruiters to be some of the most emotionally resilient people in the world. At least, the ones who survive. If you are still a recruiter after a year, then you are in the great minority. Assuming that you didn't come into the business on the retained side as most people don't, you are working on contingency. This means that for every successful placement you make, you were also working on another five to ten, or perhaps even more, that failed to close. That means that a whopping 80-90% of your entire job ends in failure. You must also have developed coping mechanisms to handle all the negativity that comes with that much failure. Sadly, I have seen people who recruited for more than 25 years hit a wall and burn out. These are people who after so long in the business shouldn't have to work that hard. Their reputation and network should feed itself to a point that they have their pick of clients. Why then do so many come to ruin? I believe that it is the cumulative effect of the incredible amount of failure that their psyche endures.

If you cannot make the transition to retained search, you will become Marginalized and likely burn out probably well before your 25th year. Some "burned-out" recruiters become trainers because they cannot bear the pressure of the "desk" anymore. You don't have to end like that. If you transition your business into a "pure engagement" practice, and work exclusively on a retained basis, you will eliminate the vast majority of the failure and negativity which you currently endure. It is Life Changing! Just a little Food for thought...

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Help me, Help You!

I recently received a call from a $100mm medical device company wanting me to help them find a new Marketing Director. They told me that they were referred to me by a few executives within their company as "the recruiter of choice." The first 30 minutes of the call was me asking a lot of questions to determine what their ideal profile was and how they envisioned attracting that caliber person to their company. I am very familiar with their company and in the past have actually recruited from them to some of my clients. Once I had a solid grasp of what specific experience and talent was essential for this position the discussion turned to "how we work." I described that the way that we work in our firm is through what could best be described as a modified retainer. I explained how in order to do it right, there were a few key elements that had to be there so that we were able to do the kind of high quality work that we are committed to. The person on the other end of the phone shut me down immediately. "Well, we don't work that way. We only do contingency," he said The irony is that this position had been open for several months and the continual stream of candidates brought by contingency recruiters failed to deliver any result other than failure. I could argue that the results were far worse than mere failure. In fact, as they were now back to square one after months of interviews and failed attempts, my question was, "how much money and time have you already spent with nothing to show for it?" Consider all the wasted time & money on airline fares, hotels, and not to mention the loss of productivity of all the employees who were brought in on the many interviews. Now multiply that by the loss of opportunity of those people not at their desks and the empty desk of the open position. My challenge was unwelcome. He refused to give any meaningful answer, but instead explained it away that at least they got close on a few people. This is such a common problem. When a company decides that it is to their advantage to work with recruiters on contingency, they are making a huge mistake. It is obvious to me that they do not understand the problem or the solution. Not only are they creating a problem for themselves with regard to the reliability of information about their candidates, they are actually competing with other companies over the people being paraded in front of them by recruiters. Perhaps more importantly, I believe that this company will never see some of the best people in the industry because these recruiters are not willing to do what is necessary to bring them in on contingency. Nor would I under those terms, which is why I refused to accept the search.

I refused to work with this company on the grounds that I could not conduct the search properly without being formally engaged with one-third of my fee in advance. When they balked, that told me that they didn't have a clue about what really goes on in the recruiting world. They must not know that the recruiters will not fully vet or disclose information about the candidates that could possibly derail their candidacy. Why would they? (Contingency recruiters don't get paid unless they close the deal.) So we parted ways and within days, I received a call from a previous retained client where I placed a VP Sales & Marketing last year and a European Sales & Marketing Manager last month. They just retained me on a Director of Marketing search. They understand the value of conducting a true search for the best talent instead of the most available.

If a company won't help you, help them; move on and find one that will. Your life will be far better for it!

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Candidate Motivation: Pushed or Pulled?

As a recruiter, your candidates are either being pushed out of their current company or they're being pulled into your client's company. The big idea is, "What is their motivation?" Is it to join your client's company? Is it that they have overstayed their welcome in their current company? Is it that they are "on the bubble" and feel that their days are numbered? Is it that they can't stand their new boss? Or is it that the opportunity within your client company is so compelling that they are excited about what they can bring to the new company and what the opportunity holds for them in their future? Is one motivation better than the other? By no means does being "pushed out" of a company make someone a bad hire. Sometimes, it is as simple as a matter of "fit." But that is a separate issue. Who do you think will have the greater impact and staying power in the new company? The one who saw this position as a "safe landing" or the individual who saw it as the next great opportunity in their career? Either candidate can look attractive to the company. In fact, as I discussed in a previous blog, candidates who are being "pushed" out of their company can be very compelling interviewers primarily due to their intensified motivation.

Recruiter Motivation: If you are thinking like a Contingency Recruiter, then you're likely to care more about getting paid than what might be the best long-term outcome for your customer. Recruiters are a sensitive bunch so I am sure that some will take offense to this statement. Once again, I need to clarify what I am NOT saying. I am not saying that if you're a Contingency Recruiter then you don't care about the long-term outcome. I don't believe that is true. I do believe that the long-term outcome is secondary to the ever-present priority of obtaining your fee. Every single Contingency Recruiter I ask, eventually comes around to agree with this statement.

According to Maslow's hierarchy of human needs, given the choice between finding the best possible outcome for a client and being able to meet one's own financial obligations, is going to force a person to choose to influence the outcome that suits their own needs. So how does a company know that their recruiter is committed to their long-term success and not merely getting paid? It starts by engaging them in a fashion that gives them the confidence to have the same objective and priority as their clients. More on how to select the right recruiter later.

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Recruiters - Quit Feeding your "Clients" Scraps

Contingency Search has run its course and it is time to fundamentally change the way recruiting agencies do business. Everyone has access to the internet so if you're an agency recruiter, you should leave the internet job boards to your clients. If you're an agency recruiter, and you work on contingency, you should seriously consider elevating your game before you become marginalized by the fact that you are not doing what is best for your clients. In fact, you have already been marginalized and it isn't necessarily your fault. It is the terms under which you are engaged with your clients that prohibits you from finding the best possible person to fill the key role in your client's company. In the truest form, recruiters do more than find people who CAN do a job and instead search to find the best of the best talent that will fit well into the company and excel in their role providing a long-term value to the company. To many recruiters, doing the search right is a luxury that they cannot afford because they know that they are in a race against the clock. Finding people who are already active searching for work is the only way to compete, whether it is another recruiter or the company's internal sourcing capabilities. However, skimming resumes off Internet job boards is NOT recruiting. One of my main purposes of this blog is to encourage recruiters to quit cheapening themselves and our industry by partaking in the "race to the bottom" as I commonly refer to it. Educate your "clients" on the value of real recruiting and engage them in a way that ensures that you both share the same priorities. [polldaddy poll=5734849]

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BEWARE of the Unemployed

The Avoidable Hiring Mistake There are talented people who get released from their jobs, but it is not the norm. Listen carefully to what I am NOT saying! It is possible that a talented person could be laid off as part of a RIF just for not getting along well with their manager, whether a part of an M&A or corporate downsizing. We've all seen corporate politics play out badly when someone is in the "wrong alliance." But let’s be honest about this subject, it is the rare exception to the rule in a Talent Driven Economy like ours. Generally, companies use these opportunities to "reboot" the company and purge itself of the most mediocre talent from the roles, knowing that as the company rebounds, they can replace those “riffed” positions with better performers. It's one of those issues people don't like to acknowledge "on the record," but it is still true.

Sometimes companies see these "lay-offs" as great opportunities to acquire a new star from a major competitor. I hate to break it to you but, BUYER BEWARE! Most likely they didn't release their best and brightest or even their "middle of the bell-curve" employees. Be smart and work with a search consultant who is committed to your success and will accurately vet the candidates to assess what they were really like in their most recent role. It's not easy, but it's critical to your success as a manager that you understand how they performed and how they got along within their company. Don't be fooled into hiring another company's expendable employee. Furthermore, beware of an unemployed candidate's innate ability to sell themselves out of a pure survival instinct.

When your competitor downsizes, don't rush to hire someone who was obviously expendable without doing thorough due diligence. If you fail to properly vet them, you may end up wishing you too had a Reduction in Force that you could exploit to rid yourself of the problem.

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Outside of the Box

Why is it that people expect us to conform to the "Norm?" I think it is short sighted and weak-minded to be too conventional. The problem with Conventional Thinking, is that conventionality becomes obsolete over time. The usual analogy is the Buggy Whip, but you don't have to go back that long to see a thriving business essentially become obsolete by failing to understand how technology can transform a business. Blockbuster Video held on to DVD rental too long and it killed them. In the past five years, their stock plummeted 99.82%. While the Internet streaming capability grew, Blockbuster stuck their head in the sand. They had a great run and effectively managed the technology change from VHS to DVD. Somehow they completely fumbled the next transition to Internet streaming. I see a similar phenomenon in recruiting but no one wants to admit it. Since companies have figured out how to use the internet for candidate sourcing, Contingency Recruiters have been rushing to the web in a race to the "Low Hanging Fruit."

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Why Contingency Recruiters' Candidates are So "Stinking Good!"

We can all agree that the best interviewer isn't necessarily the best candidate for any given position. So the real question is, what makes a candidate a good interviewer?  There are two things that make someone interview well: Preparation and Motivation. If you hired a recruiter on contingency, chances are that the candidates they send you will all have an incredibly focused and purposeful interview. I'm also willing to bet you that they'll throw in some of your own "buzz words." Did you ever wonder how that contingency recruiter found such "perfect" candidates for your job search so dang quickly? Did you ever wonder after hiring one of these candidates, "who is this person?" They often turn out to be very different people than who interviewed. Why is that? Was it the full moon? Something I ate? Here is the little secret: The recruiter "prepped" his candidates by telling them how to sell themselves to YOU! Every detail of the profile that you shared with them, including the part you asked them not to share with the candidates. All of it was told to each candidate in hopes that they could land the job. And if you were in their shoes, you'd do the same thing. Because, these recruiters won't get a paycheck next month if you don't hire one of their candidates. Can you blame them?

As for motivation, every single one of their candidates is highly motivated to get A new job which makes them a "flight risk" if you hire them. I hate to be the one to break it to you...

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A Tale of Two Recruiters

A start-up Web Design Firm needed to hire a UX Designer for their rapidly expanding portfolio. After being reasonably impressed by an array of recruiters, they authorized one of the recruiter's named Tom to find a talented programmer. Tom is a solid citizen who does his best to perform well for his clients. With the job specifications fresh in hand, Tom quickly prepares his plan and begins scouring an array of tech job sites and crafts a few boolean searches and narrowed the search to a few dozen resumes. Within hours, Tom begins making phone calls to interview the candidates to see if they possess the right skills for the Design Firm. After several days of recruiting calls, reference checks and further interviews, Tom narrows his search down to the top three candidates that he thinks best embody all the attributes that the new company needs in a UX Designer. In fact, everything seemed to be moving along rather nicely. The problem is that a few days ago, the same start-up openly discussed the search with a different recruiter who happened to call in one day unsolicited. Once recruiter #2 hung up the phone, he quickly did a similar search online and downloaded a handful of resumes and proceeded to email them directly to the Design Firm's executive. By the time Recruiter Tom got the chance to present his top three candidates to the executive, the executive had to inform Tom that he had already received the same resumes from another recruiter. Guess which recruiter got paid?

You would rightly think that it would be a mistake for the Design Firm to pay the second recruiter. Sadly, that is exactly what would happen 99% of the time. The first one who sends a resume in wins! So what is the logical outcome from such an incident, and I promise you that this very common. The outcome is that if Tom wants to feed his family, he'd better quit vetting candidates and instead be the fastest trigger.

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Stuck in Concrete

People are stuck in Concrete! For all the opinions in cyberspace and beyond, I find it to be extraordinarily rare that anyone EVER changes their minds. For some reason, we seem to have figured everything out by the time we're 30 years old. I wonder if it is a physiologic reason or if people are simply too lazy to allow their ideas to be challenged without defending them with every fiber of their being. Unless we are so smart or lucky to have arrived at all the right opinions by the time we are 30, chances are we have room for growth. I know that this must be tempered with logic and reason. It has been said that if your mind is too open, your brain will fall out. What do you think it is that motivates people to not allow their ideas to change? Whether it is political views, religious views, or opinions about how to conduct certain aspects of our businesses, it appears that most people are closed off from allowing themselves to deviate from their small comfort zone.

I don't know how one can improve and keep up with the changing times and remain relevant without adapting even the most basic views. I observed this in the late 80's when Arthroscopic Knee Surgery was growing by leaps and bounds. It was growing because it offered better outcomes and less morbidity and faster recovery times for patients. Yet there were some surgeons who thought that it was either a passing fad or couldn't imagine a scenario where their current methods and results could be improved upon. So, they didn't change the way that they performed knee surgery and were left behind. Their practices suffered. The same was true in the shoulder and the "State of the Art" is continuing to advance. The reality is that no matter what your chosen field, you fall into one of three categories, Early Adopter, Mainstream or a Dinosaur. If you are an early adopter, you are continually seeking better ways of doing what you do if they offer an improvement over the status quo. Mainstream people wait to see that enough people around them are doing something that it will not be a risk to them if they try and fail. As far as the Dinosaur is concerned... As you know, Dinosaurs are extinct.

This concept also applies to anyone in HR or who hires talent. If you are still working on Contingency, then you are not availing yourself of the best tool to find the best people.

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Never Hire a Contingency Recruiter!

Conflict of Interests

An enormous conflict of interests exists between the Contingency Recruiters and their client. What may have seemed like a good idea, in actuality has turned out to silently pit recruiters against their clients. Let’s face it, to many people in business, recruiters have become nothing more than a “necessary evil.” In fact, many HR professionals will tell you that one of their top priorities is to use fewer and fewer recruiters and in an ideal world, they would eliminate using them entirely. After being on both sides of the table in industry for over a decade and now more than a decade as a recruiter, I can assert that the Tragic Flaw in this process isn’t the recruiter per se’, but instead the means by which recruiters are engaged.

First and foremost we must acknowledge that contingency search makes sense on the surface. It is hard to argue against the idea that if you aren’t happy and don’t hire, you pay nothing. However the law of unintended consequences takes over and the fall out is what may look like a good short term outcome rarely lasts and HR very rarely knows the truth of what happens behind the scenes. Evaluate the process, and I think you’ll see that it is rife with embedded conflicts of interests which create all the right conditions for a terrible long term result. Pay for performance seems pragmatic enough right? After all, this is a “Market Driven Practice” brought on by competition and demand. But why don’t we engage all functions on contingency? Why only recruiting? Is it because the barrier to entry to become a recruiter is a phone and a PC? Is it that anyone can make any claims on the other end of the phone about being an expert in any field? But what about the results? Isn’t that what it is all about? I believe that I can make a case that what lies beneath the surface is a conflict of interests of Epic proportions which ultimately rewards the worst possible performance and most unethical and self-serving actors in the recruiting industry. If you’re familiar with the book, Freakonomics, then you know that with each economic incentive comes an element of unintended consequences. This could easily fit into a chapter of their next book because it is a clear example of the negative outcome being more destructive than the specific intended benefit, which was “Paying Recruiters based on their Performance.” Why would it make sense to have a consultant who conducts so important a role have any other priorities apart from yours?

Product Development

Lets take for example a company in need of a product re-design in order to fix a complex problem with one of their existing products. When the company hired a design firm on contingency, they determined the effort the firm could put into the process which is inseparable from the outcome. Would the design firm enlist their best and brightest designers to thoroughly study the problem to find innovative ways of solving the problem without creating new ones? I can promise you that they would NOT if there was even a remote chance that they would never be paid for the work. If they did, they would compromise their very existence. Then what would happen if the same company openly discussed its product needs with other design firms in hopes that they may have an innovative solution. This sort of thing happens all the time. What if the company suddenly changes direction and scraps the whole project after weeks of design work? The design firm will have lost all their time, materials and opportunity to make another part for a paying customer. Any design firm willing to work this way either is in a desperate situation and needs the work, which begs the question, “Why?” Is it because their work is sub-par? A good design firm would never work on contingency because it doesn’t afford them the time and security to make the product that best suits the needs of their client. It would force them to rush the job and commit very little time and energy to the project.

Essentially, a recruiter is no different than a design firm. Although they don’t create people, they must essentially commit the same time to identify and recruit talent with all the right features, skill sets, character and chemistry, to solve a problem that a company has. All of this takes great time and attention if done correctly. On contingency, a recruiter simply cannot do the necessary work and truly put the needs of the client ahead of their own need to secure the fee.

I contend that this conflict of interest is easy to eliminate provided that you find the right firm to partner with; one that understands your unique value proposition and culture. Without a real commitment, not merely words on paper, but a real, “skin in the game” commitment, the immediate pressure is off and the fear of loss is eliminated thus allowing them to do the work right in stead of cutting corners. In a contingency search, it is a race to the most readily available candidates which means that they must already be actively pursuing a new job.

Without this level of commitment from a company, a recruiter will not be committed to the long-term success of the company, which is finding the absolute best people in the industry for your job. Instead, they will be committed to securing a fee above all else. Why don’t contingency recruiters share your priority? Because they are human and their basic needs come before anyone elses needs. This translates directly to the caliber of people they will put in front of you. They cannot take the time to truly understand what your company needs and the challenges this person will need to overcome. They cannot afford to take the time to truly find those people who’s head is down and they are successfully plowing away at their jobs.Those types of candidates are harder to recruit and they do not interview like an “applicant” does. They don’t need your job. Yet, the active candidates who I like to call “Mis-Employed,” will interview in a compelling and aggressive way out of their own need. The “Mis-Employed” fit in to either one of two general categories, “Currently Unemployed” and “Nearly Unemployed.” In either scenario, these candidates are the ones that you will see when working with a Contingency Recruiter simply because they are ready to move. They are motivated to make a change and already have made a commitment to get a new job. These people tend to interview very well because their motivation to find a job compels them to sell themselves. Contrast that with the “Gainfully employed” person who frankly doesn’t need your job. These candidates are completely different. But who would you rather have at your company, someone who is out of a job or discontent with their job? I contend that these people make short term decisions about their future because of the pain that they have. When your boat is sinking, any land mass that is dry seems like a good place to land. To someone who isn’t looking for work, they are more discerning about their future and they focus on what pulls them into a new opportunity instead of what pushes them. This is a concept that once you grasp, I believe that you start to see the breakdown of the contingency search. It doesn’t force the recruiter to rush the search and thus find the best people, but the most available.

If they operated while in a contingency search while trying to find the best prospects for the job, they would certainly lose out to the opportunistic job shoppers because I we just learned, they do a better job of selling themselves. In fact it takes a discerning person to tell the difference between the two. These nuances are critical to understand what motivates your candidate. If however, you’ve hired your recruiter on contingency, you most likely won’t know this because they will conceal these little facts such as the candidate is on a 30 day plan, or she hates her boss, or he has done something against the rules and is under discipline. You will never know this or any other fact that might hurt the contingency recruiter’s chance of making a fee.

I like to tell people that it is the job of an honest recruiter to reveal the blemishes of each candidate, not to hide them. It is the responsibility of the recruiter to tell the prospect what the role entails and what they need to be able to do to be successful, not tell them the “hot buttons” of the hiring manager so that they can check all the boxes of what he or she is looking for. If you don’t believe me, then you’ve never been through the any Contingency Recruiter Training. There are dozens of ways recruiters know how to overcome your objections through preparing candidates to make the grade.

Alignment of Interests

If a recruiter has its clients best interests at heart, then it is constrained to do what is right for the company and not for himself. It is their fiduciary responsibility and sacred trust to do everything in their power to recruit and vet each candidate until they find those who to the best of their ability to discern, the candidates will be successful in their new role and be a valuable and loyal employee for years to come. To make matters worse, most companies have a policy of only paying the first recruiter to email a resume when hired. It shouldn’t surprise you to know that this is an incentive to email a resume prior to speaking to and vetting a candidate. Where do recruiters find such resumes? The Internet of course. Knowing this, how confident can you be as a Hiring Authority that this recruiter will do what is in your best interests. When their top priority is ensuring that they put someone into the position as soon as humanly possible? The truth is that you can not. You have instead undermined your own chances of hiring the best possible candidate. You have forfeited the best for the most expedient. I am fairly confident that no one would think that was a good way to do business when it comes to designing a new product? Why should it be any different when it comes to hiring a full-time employee?

If what you want is a race to the “low hanging fruit,” contingency search is a great way to do it. The incentive exists to do the work as quickly as possible by taking enormous short cuts essentially putting the needs of the recruiter above the client’s. I cannot understand why this would be acceptable to any company. Rates aside, the terms are what determine the outcome of any search. Either it is rushed to make a buck or it is executed responsibly with the highest priority being finding the best possible people to fill the role and excel in it for years to come. Furthermore, I don’t believe that any smart business person would ever knowingly entrust so important a task to such an irresponsible process, let alone arrange the terms in such a way as to guarantee it. However, companies do this all the time when it comes to hiring a full time employee.

The right process involves establishing a relationship with a firm that invests the time to gain a thorough understanding of the problem or the position that must be filled by the acquisition of a very specialized skill-set. Then the comprehensive design/search process would be conducted to be sure that all the specifications of each prospective candidate meet the demands of the role. Thorough vetting of the candidate would then be conducted prior to presentation of the product to the client to minimize risks and ensure the best possible outcome.

I contend that contingency search has incredible pitfalls as it creates a gross misalignment of priorities between the recruiter and the company. No recruiter can do their best work on contingency. When a company and a search consultant have conflicting priorities, the process is undermined and the product and result is severely compromised.

10 likely consequences of Contingency Search:

  1. Active Candidates are simultaneously interviewing with other companies
  2. “Mis-Employed” candidates are less focused on your job. Push vs. Pull
  3. Candidates accept your offer only to later renege after accepting a competitive offer
  4. Candidates stay a short time at your company and never quitting their job search
  5. Candidates turn out to be different people than who you hired. “Over prepared” or “Force Fit”
  6. Search takes much longer than it should have due to turned down offers and other problems
  7. The Replacement guarantee you now need was only 30 days
  8. You lose large amounts of Time & Money not to mention the “opportunity costs”
  9. Multiple recruiters submit the same candidate creating conflict and risk
  10. You grow increasingly skeptical of all recruiters and unwilling to trust them with your best interests
  11. The more I consult with business people, the more convinced I am that HR has settled for scraps when a feast is only a few contract “terms” away.. Companies should never engage any consultant with an incentive any other than delivering the products and services which are in the company’s best interests. The odd thing is that the fees for each respective process are the very comparable, while the process and product are significantly different. Partnering with a search firm in such a way that promotes a healthy alignment of priorities, a company can and should have nothing but the best possible slate of vetted candidates/prospects from which to hire without losing them to a competitive offer or worse, losing them a few short months after their start to an aggressive competitor/suitor.

    The choice is yours to make. Either continue to gnaw on scraps or set the table for a feast of epic proportions.

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First Post!

Today is the maiden voyage of my Retained Search Blog. I have had my own business website for over 11 years now and although it was fairly trendy to have a blog on your site, I never really thought it would be worth the effort. There are so many different blogs and news aggregators and opinions that they all tend to blend together in my mind. Quite frankly since I almost never read anyone's blog, I figured no one would want to read mine. However, as I have evolved as a recruiter, I have learned so many  transformational lessons during my journey that I have began sharing them with other recruiters and the response that I typically get is one of appreciation, excitement and further inquiry. I have had many long phone conversations where I convey some of the truths that I have learned about converting a contingency recruiting practice into a fully retained practice and somehow it seems to resonate and bring about more curiosity. Several people have asked me to write a blog so I have finally succumbed to their pressure.

Perhaps you share my views and have a thriving Retained Search practice. It is also possible that you aspire to this in the future.  I hope that by reading this blog, you will find value that will help you make the same transition that I did. You are welcome to agree or  disagree with something that I say here. I welcome disagreement on this blog. I don't think that I have all the answers as it relates to the recruiting industry.  I believe in a healthy exchange of ideas such that we can all get better and build our industry up.

Let's do this!

Drue

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