Recruitment

The Increasing Desperation of Struggling Recruiters

By December 5, 2013 29 Comments

I received a phone call this week from a regular Whiteboard reader in a rather grumpy mood.  He wondered if a recent spat he had been engaged in could be aired here on the blog to garner some opinion and hopefully generate some useful debate.  I thought it was a great idea, so I’m afraid you lot will have to contribute to this week’s post with your own thoughts and opinions.  This is a doubly good idea as I’m short on time as another regular reader is here visiting from England and I’m taking her to Waiheke today.

Hi Mum *waves*

So.  The premise:

Boutique kiwi recruitment firm (Recruiter A) wins the business of a small Auckland manufacturer who briefs them on the role.  Recruiter A is told they can work the role exclusively and so posts the advert co-branded with the client’s logo and commences the recruitment process.  The next day a consultant from a large, global recruitment firm (Recruiter B) who runs a desk covering the South Auckland market spies the advert and calls the client directly, bypassing the other agency.  Through some specious and cunning sales techniques Recruiter B convinces the client that they should look at a CV they have too even though they gave the role exclusively to Recruiter A.  The CV is submitted and the client brings the candidate in for interview.  Then a second interview.  And then reference checks….where it all falls down and the candidate turns out to be a dud.  Meanwhile the client held off seeing any of Recruiter A’s candidates because they thought they were onto a winner with the candidate from Recruiter B.

So here’s the multiple choice question:  Is Recruiter B:

(a)  Behaving unethically

(b)  Just doing what any other recruitment company would do anyway

(c)  Behaving in a somewhat underhand and aggressive way but doing so in an innocent manner since this is pretty much what agency recruitment has degenerated into anyway… 

A heated phone call between the MD’s of Recruiters A and B resulted from this scenario with Recruiter A circling option (a) above and Recruiter B stressing that option (b) applies.  Me?  I’m plumping for the third option…

Every recruitment firm I’ve worked for had some sort of system around chasing ads.  Normally this would entail either calling up the company who had advertised the vacancy and offering our services, or in the case of rival recruitment firm adverts, trying to work out from the text in the advert who their client was and then putting the call in the same way.  This scenario falls into a kind of grey area since there’s no effort being made from Recruiter A to hide who the hiring client is.  This was presumably done on the understanding that the role was held exclusively.  As it turned out, the client’s mettle was tested by an experienced recruiter and they folded in, which ultimately resulted in them now having to wait until the New Year to re-start the recruitment process and potentially hold back the development of their own business.

Recruiter B was probably somewhat arrogant and aggressive in their approach but they were right in one thing, most other recruitment firms would probably do the same thing.  The issue here is that Recruiter A clearly didn’t forge a close enough business relationship with the client to fend off the inevitable rival approaches.  I think Recruiter A needs to look more closely at managing their client relationships and advising around these probable scenarios rather than trying to accuse others of being unethical.

The very fact that this behaviour is generally accepted by many in recruitment is the real shame though.  Calling this kind of activity “recruitment” is like saying you play football when all you do is pop down the local bookmakers to lay some bets on the weekend’s football results each Saturday.  It’s a numbers game with no real craft or consulting service on offer.  But, increasingly, it is the primary way that recruitment agencies now manage to keep the lights on and remain in business at all.

What’s even sadder is that the MD of Recruiter B actually agreed that this kind of behaviour was symptomatic of the decline of the relevance of the agency recruitment offering.  But, seeing no alternative, felt it was ok to do it anyway.

What do you reckon?

Jonathan Rice

Jonathan Rice

MD at New Zealand rec-to-rec firm Rice Consulting and co-founder of on-demand recruiter offering Joyn. Recruitment agitator and frustrated idealist, father of two, husband of one, and lover of all things Arsenal and crafty beer.

29 Comments

  • Client didn’t respect Recruiter A and is an opportunist. Recruiter A is honest but weak and should have engaged with retainer built in upfront and balance due on hire. This would have protected himself and relationship with the Client. Recruiter B is an aggressive opportunist but karma may come calling in due course. Recruiter A sounds like a good operator who just needs to value themselves more. Like any new relationship – it pays to wear protection !

  • Avatar Greg says:

    Not put the ad branded in the first place , and got the client to agree that any resumes sent in by third parties would be forwarded straight to the original recruiter. Have that stated on the ad as well.

    On the wider point about contingency recruitment having some sort of an existential crisis ; this blog has focused on the pain felt by recruitment A – what about the client ? Caught in a bun fight between 2 recruiters , wasted time by interviewing a rubbish candidate and now has to wait a couple of months before filling it and still has to pay a large fee.

    I would say there’s a problem.

    I direct you to Mitch Sullivan’s blog which covers this sort of thing : http://fasttrackrecruitment.com/blog/activities-that-agency-recruiters-need-to-stop-doing-if-theyre-ever-going-t

    (apologies can’t hyperlink)

  • Avatar Greg says:

    It appears I can!

  • Avatar Bob says:

    Recruiter A clearly did not engage as well with their client as they thought. Recruiter A clearly does not have the ability or understanding of how to tie a client into a process. Recruiter A has clearly not heard of retained recruitment. Recruiter A would seem to think that flicking an advert on SEEK is recruitment.
    And no, I am not working for a large multinational recruiter.

  • Avatar Phil says:

    Unfortunately this kind of thing happens often and i don’t see it ever changing. Recruiter A should’ve been more clear with the client around expectations and the client.. well should’ve been more transparent etc. The other matter which hasn’t been addressed is the way this sort of behaviour affects the candidate market. So often i have candidates tell me an agent has calle them about an “exclusive” role when in reality it has gone out to other agencies as well. I have even come across candidates being covered by agencies for roles they shouldn’t be working (panel agreements) . recruiters have a bad enough name as it is without this sort of carry on. Rules get bent, ethics go out the window and integrity is sacrificed to make a buck

  • Avatar Chris says:

    You state “It’s a numbers game with no real craft or consulting service on offer.” I would counter this with Recruiter B, although aggressive, did a better job at consulting with the client and therefore built a stronger relationship than Recruiter A. I would also disagree that it is sad “that this kind of behavior was symptomatic of the decline of the relevance of the agency recruitment offering”. We live in a competitive world and if you do not perform you will not have a successful career in this industry. This is how our industry has always worked and as long as you are ethical with your clients and candidates I think that is what really matters.

  • Avatar Sam says:

    “Recruiter A needs to look more closely at managing their client relationships and advising around these probable scenarios rather than trying to accuse others of being unethical.” is what I was going to say but JR put it perfectly.

    Client paid or branded adverts look nice but without a retainer hold little return or value.

    It doesn’t take a genius to work out who the other recruiter is. Certain practices by that recruiter have meant that they took a market share, other recruiters HAVE to employ similar tactics to remain in the game.

  • Avatar Very anon for a reason says:

    We’re company A. And that’s not quite how it happened. I may not have explained clearly to Jonathan. Client was relatively long-standing and we were referred to them via a long-standing relationship. The relationship is good, and a retainer was considered unnecessary because of this. To be frank, a retainer would not have prevented this. Recruiter B (the consultant) is under instructions to trawl branded adverts as a matter of their so called “marketing”. This was not “relationship building” on part of Recruiter B, Chris, it was an opportunist quick flick that the client was then told they would be charged 21% for the “service”. On first glance and after interview, the candidate seemed kosher, but reference checks failed. End result is that we do have the role committed exclusively now, and client is thoroughly pissed with Recruiter B to the point of saying that they will never let them darken their door again. Recruiter B’s response to this? “Oh well, you got the result you wanted, didn’t you? So what are you complaining about!”

    Put yourself in the client’s shoes and let me paint a scenario. Recruiter B calls with a very compelling sales pitch. “I have a very good candidate who I think could do your job and loves the prospect of joining your growing company and sector.” Client says “But I’m with xxx who is handling this. Can you talk to them?” Recruiter B “Look don’t worry about that, we’ll sort that out with them. I suggest you meet with this person because as you know, good people are snapped up quickly, and there’s another client who is keen to see this person”. I may exaggerate for effect here, but I think you get the gist of what I’m saying.

    But I think you’re all missing the point and only focusing on “the process”. This is more about the perception of the unprofessional behaviour of many in our industry and the supporting of this unprofessional behaviour by some of the multi-nationals. The culprit and one other were mentioned by name to me as this being standard practice and encouraged as part of their business practice. Their excuse? It’s anti-competitive and against the law, and that the Commerce Commission could dump heavily upon them if they were prevented from doing this.

    So this goes a lot deeper. We’re struggling as an Industry to keep our heads held high. And don’t give me the rubbish answer that we’re not, because I can tell you that some of the people who “protesteth” the most, are the worst in their behaviours, and many active RCSA members. So let’s not go there. Just type in “Recruiters are” in Google and see what comes up!

    Even real estate agents don’t elicit this behaviour. Perhaps car sales people do? Most I have dealt with don’t. And legally, yes, perhaps it can be construed as “anti-competitive”. But if we have to resort to not promoting our client’s best interest by advertising in a vanilla way, then this will just perpetuate the reputation we have and continue to “drive nails into our respective coffins.”

    Yes, we ended up with a “good result” for us, but the client and process was derailed by this behaviour.

  • Avatar Chris says:

    Very anon – This does change my view point somewhat. The perception of the the unprofessional behavior had by said client. Would this still be the case if Recruiter B was successful in making the placement? I would disagree. Our industry was created and grown from opportunity and supplying the missing piece and we have always been taught (multi-national or SME) to get past the “gate-keeper”.

    I am still fairly junior in this game having 7 years experience but from reading many blogs and articles about how the industry was prior it has always been the same. I have however noticed that the majority of people that are still in the industry overall have good ethics and that is how they have out-lasted the cowboys of the industry.

    There will always be situations where our competitors will be beat us through underhanded means and when situations similar to the above happen leaving a sour taste of our profession with the client, it is our solid bond/trust that will win them back over to using our services again.

    Yes our industry has many internal and external adversaries that do not assist our collective cause. But through being a consultant and winning trust through ethical recruitment the good recruiters will last whilst the “others” will not.

  • Avatar Really? says:

    Am I missing something here? I have been in this industry for more years than I would like to admit and this is common practice. It has happened to me a couple of times and whilst not a great feeling maybe I should have done more to prevent it. On one particular occassion I made a formal complaint to the RCSA only to be told that their hands were tied and they could infact do nothing about it even though both organisations were members.

    So yes – people may either view this as business as usual or infact gutter recruitment.

    At the end of the day this is nothing new, has been done for years and will no doubt continue into the future.

  • Avatar HRManNZ says:

    As an HR practitioner, there is another element here that seems to have been missed. The behaviour of whoever was the contact at the client clearly shows someone with no ethics either, and who is prepared to renege on an agreement with an agency for the sake of a sniff of a good candidate. This is rather sad and unprofessional. And yes, I know HR people who behave that way when it suits them.

    For the record, decent HR and internal recruitment people will tell the likes of Company B to get lost on the grounds that they probably have no idea about their company and culture, or what they are actually looking for in the candidate. My team won’t deal with opeople like that on principle.

    If I was Company A, I would be telling your client to get stuffed and go find yourself a new client who knows the meaning of the words exclusive and partnership.

  • Avatar Still very anon for a reason says:

    Chris, I doubt whether they would have changed their perception of Recruiter B because they were gobsmacked by the proposed fee and had not been given the T&Cs when presented with the candidate. I would imagine they would have sucked it up had the person checked out well, but just never used them again, as they have decided anyhow. But that’s just perception based on being involved. By the way, it wasn’t me, it was one of our consultants that experienced this and he is somewhat of a veteran, so knows what he’s doing.

    I can say that until recently and with the advent of the multi-nationals, there has always been a “gentle-persons” (note the PC expression now..) agreement that if a recruiter advertises a client brand, then we just leave it alone. Whether it’s signed up exclusively or not is irrelevant. Anyone bypassing the advertising recruiter would know that they would create a “s-fight” which the client could get caught up in. That’s just commonsense.

    Yes, we can win or reclaim the business but the sour taste that it leaves impacts wide and far. When that client engages in conversation with someone else, will they relate the positive experience with us, or the negative with Recruiter B? Research and statistics confirm their first, and probably only, conversation will be about their experience with Recruiter B. It would be naive to think that this doesn’t impact on the reputation of our sector, and those of us who operate in an ethical manner.

  • Avatar Thomas says:

    The client appears the unethical party in this story, why the MDs of the two recruitment companies should be ringing each other to discuss is beyond me. All too easy for the client to lay the blame at the door of Big Bad Agency B when the client was ultimately to blame for the event.

  • Avatar Still very anon for a reason says:

    Sam, I don’t want to get personal here, but it’s your very attitude that I’m talking about. Is your answer “fight fire with fire?” God help us, because we’re really doomed! And I think you might be quite surprised who are the culprits here. But let’s not name names, or drop hints in this environment.

  • Avatar Mason says:

    Sorry guys but I just don’t believe there is enough complete information here to make some of the strong calls above.
    Saying that in all probability there is fault with both recruiters and the client – the balance of where it lays depends on nitty gritty details we haven’t been party to.

    For example there is no evidence/discussion of past or present business relationships…
    – perhaps the client has used a provider not on their supplier list?
    – perhaps the clients manager has moved the ground?
    – perhaps B has just worked wonders for his candidate by contacting a former business he knows intimately!
    B running a candidate presentation while an exclusive arrangement is in force – is just not cool, unless she did ask when it expires and ask to present the candidate then?
    Sorry B, but sending a candidate before completing references – doesn’t do it for me as a professional recruiter do the work first – reference are essential not optional! You just wasted your time, clients time and raised the applicant’s hopes without reason!
    A – I hope you have signed terms and fully explained them – if you have go back and fix the gaps you have not covered! If you haven’t improve your systems.
    A Well done on the co-branded advert!

    Client – shame on you!
    Recruitment is a professional service and you should engage recruiters that are professional and treat them as professionals – I bet you don’t get two accountants to race against each other to complete your annual accounts and then pay the “winner”.
    Client – If you didn’t get full explanation of what exclusivity means in writing (like T’s and C’s) then you should have – saying that if you engage any other professional provider (lawyer, banker, accountant, speaker, facilitator etc etc, I bet you don’t usually engage other providers midway through without paying both providers. And if provider A is not meeting expectations I hope you communicate that with them – allow them to lift their game or sack them!

    If you engage a recruiter that is not professional – sack them and engage a professional and develop a long term partnering relationship – its a much better experience!

    As an industry we need to first treat ourselves as true professionals, act as professionals and negotiate relationships and terms that match that – why do recruiters work on contingency fees at all? Architects and councils get paid regardless whether the house get built or not….by running a campaign or search surely we have used our professional resources eg networks, systems, websites, knowledge, talent pools, local knowledge, interview rooms, assessment suites, behavioural interviews, psychometric assessments etc etc – accessing each of these or as a suite is worth a professional service fee!

    If you market your candidates to other firms exclusives – then man up and swallow that same pill when it happens to you in reverse.

    Or have I missed something? It is Friday afternoon after all.

  • Avatar Greg says:

    Very Anon – it sounds like its been an incredibly painful couple of weeks , I feel for you and I’m sure that many people reading this blog have had similar experiences. The problem is where from here?

    Your right the people who doth protest to much are probably the ones most guilty of this behavior but there still (probably) trying to earn a living and its not recruiter B whose the problem but the senior management methodology behind this business development strategy who are applying pressure to get results.

    If I know anything senior management at large global recruitment firms they tend to have earned their stripes during ‘the good times’ and have the mind set of what worked for them on George Street in 1998 will work for their staff in 2013.

    You should show your client this blog and encourage them to ring the MD of Recruitment B and explain in no uncertain terms why they will no longer be getting their business. They should then encourage their senior business network to contact them as well and also explain why they will no longer registering vacancies with them

    Now one more problem – why should your client go this effort – I suspect they might think that life’s to short?

  • Avatar Greg says:

    I am of the opinion that we should leave the client out of it – none of this is their fault. If your MD of a small manufacturing firm , in Auckland , in 2013 your number 1 priority should be to your business. If you get the right staff that adds value to business it honestly wont matter to them how they got them.

  • Avatar Still very anon for a reason says:

    Thomas, no the client’s not unethical. They were “sold” by a recruiter who acted unethically. And Mason, no, not shame on the client. Shame on Recruiter B. And, no, we don’t do this practice to other recruiters. This isn’t about provider lists and all the red herring stuff. This is about an unethical industry practice that exacerbates the negative view of how business views us as a service. Greg, in your last comment, you’ve probably hit the nail on the head, because overseas business practice is now commonplace here, whereas perhaps in the 80s and 90s and possibly the early 00s, the “NZ way” had influence. What was particularly disturbing is that there just was no concern about the dog-eat-dog way of doing business and that the leader of this company had no concern as to how that would affect their own reputation – or our industry.

    • Avatar Thomas says:

      Anon, can you explain to me how the client is ethical in this? As I follow it, they instructed your colleague to recruit for them on an exclusive basis and then reneged on this when offered an alternative? This is the crux of the matter, don’t excuse their behaviour because Agency B were agressive.

      Your client cheated on you and you’ve gone back to them, as an industry when we accept that behaviour it sends a clear message to the client that we don’t value ourselves as a sector.

      • Avatar Remaining anon... says:

        Thomas, the client was really a victim in this as well. A good sales pitch “We’ll sort this out – don’t worry” is all it takes. I’m sure we’ve all been victims of a hard sell at some time. Keep your eye on the ball with this situation. Recruiter B is the perpetrator here. Full stop.

  • Avatar rob wise says:

    Regretfully it’s not about what’s fair – as fair is often a matter of perspective anyway – strategic trading decisions should be based on what is.

    Recruiter A should know the industry well enough to know that advertising their client’s name was going to potentially expose the assignment – Recruiter A obviously did not know the client well enough to have relied upon a commitment of exclusivity.

    Recruiter B did what you do to survive / trade especially in a market and at a time where the pickings are very slim. Commerce works with very Darwinian principles. Imagine a fox raiding a hens chicks (of children). Its not a question of fair it is what it is.

    If not in this particular instance then another time and place when Recruiter A demonstrated a lack of strategic decision making then another Recruiter B will king hit Recruiter A.

    Recruiter A should be grateful frankly for the wake up call – if they just bemoan what should be instead of lean what is to be then they will inevitably find themselves licking wounds again.

    And yes Recruiter B has bitten me too – just less often these days.

  • Avatar Bob says:

    Recruiter A – why are you “anon” – if you are going to continuing to complain about unfair industry practices then why not back yourself, instead of hiding behind anonymous comments,

    Hopefully in the cold light of day you will identify the holes in your process, tighten them up and continue to provide a professional service to your clients. By doing so you will negate any further run-ins with recruiter B.

  • Avatar Different Angle? says:

    There is definitely more info needed, but highly unlikely there is a determinable outcome.

    Many recruiters that ad chase co-branded roles do so as they lack any form of cold calling skills. However, is there a case that Recruiter ‘B’ legitimately had a candidate that was right for the role, after all they did get to reference stage? Did Recruiter ‘B’ have the best interest of the candidate in mind by making the approach? Perhaps they should have called Recruiter ‘A’ to discuss but the answer would be “no thanks, we’re fine” 99% of the time as they would not want to admit help was needed to a competitor. Recruiter ‘A’ maybe could have cemented the role a little more, although it seems exclusivity was given ‘on a hand shake’, admirable but risky business in some cases.

    A re-occurring comment above is one about the reputation of the recruitment industry, ironically enough the behaviour of agencies which cause some of those complaints are actually driven initially by the recruitment practises of the clients themselves. A totally different topic for another time…

  • Avatar Still remaining anon... says:

    Bob, in these situations, best to remain anon, as most have in this conversation. And rob, the fox in the hen house analogy is spurious because this isn’t what this discussion is about. We all have holes in our process. Clearly this exposed one for us, because we hadn’t had it happen before. So we have addresses this and hopefully now it’s closed. We will continue to put the client’s interests first and run branded adverts, but make sure we close the “other contact” loop.

    And “Different Angle?”, you are right about the recruitment practices of companies, but they most likely treat us just as we deserve to be treated. We were there first, they followed!

    But let me say again, you’re all still missing the point and are justifying behaviour that does not put us in a great light. It’s irrelevant whether we (“A”) had a written, verbal, implied or whatever contract. “B” didn’t know what was in place when she picked up the phone and contacted the company, cold. And what made matters worse was that Recruiter B then ran a “generic” Seek advert themselves to try and pick up more candidates without the client being aware of what they were doing.

    If you all support this sort of behaviour, then it’s no wonder “the pickings are very slim” out there, because all that’s perpetuated is a bunch of “cow-children” who act unprofessionally and are prepared to stab each other in the back the moment an opportunity to do so appears. The fact that we even run the risk of dragging a client into this sort of conflict is appalling. The sectors that prevail self-regulate and compete fairly and ethically, and treat their customers and clients appropriately. Clearly there are many, as demonstrated by this discussion, who either don’t or won’t act professionally.

  • Great debate everyone, thank you for your comments. Hopefully this will at least make more recruiters think about how they sell their services to clients and how they go about setting out expectations around the process and communication. Anyone outside the recruitment industry must regard a debate like this with mirth and amazement in equal measure. Are we really to just accept that this is the kind of thing that will always happen in our industry? Or can we make some kind of concerted effort to commit to better practices and have some respect for each other, even when fiercely competing? I fear the former is likely the case.

  • Avatar Internal says:

    I won’t get into the debate about Agency A or B. I’ve had a situation where I have had a highly marketable candidate “I call them walking placements” wanting to work exclusively with me. We did the discussion around companies they wanted to work for and asked me to represent them to a large NZ company which I did. I went through the full recruitment process (references/testing, interview, 2nd interview etc) and my candidate happily accepted an offer of employment from them. Off the invoice went on my full fee from the floated resume – brilliant!. A few days later I received a call from a well known agency to advise that I had placed my candidate into one of their exclusive roles and I needed to now spilt the fee with them. I started laughing, thinking it was one of my colleagues playing a prank, but then quickly realised this Consultant was serious. At no stage had the client advised that they had these roles openly in the market, nor did the client state they were working with another agency at all! And this lovely Consultant truely believed I was going to spilt my invoice with them! Needless to say I kindly declined and suggested that they perhaps go back to their client and discuss. My invoice was paid…….

  • Avatar Steve says:

    Regardless of what industry you are in it is impossible to control what your competition is going to do and how they will behave. There will always be someone willing do offer a cheaper service or product and sometimes will cut corners to do so – I believe it is crucial to focus on what you can deliver and how you engage with your clients, that is the only way to have true control of your outcomes.

  • Avatar Chloe says:

    Iv always been told in recruitment to- CLOSE DOORS BEHIND YOU.. I lock my clients in. dont leave a door open. Recruiter A has not locked the client down correctly therefore the client would have said thanks but NO thanks.

    Recruiter A – its your own loss !

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