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Job Magician Retained Search Firms -
Dirty Tricks Department
  • Retained firms will sometimes slip into a contingent M.O. They'll do it in a way that will make it appear to you as if they are retained. If they do, you don't want to be a candidate.  

 A good friend of mine (whom we’ll call Theodore) was meeting with a retained search consultant (let’s call him Alvin) he knows who works at a well-known firm. Alvin had spoken to him about a position recently, although he didn’t present him for it, and Theodore had acted as a referral source for Alvin in the past.

“Times are tough in the search industry right now, so we’re doing what we can, Theodore,” Alvin explained.  “There’s a $27-million company within a short commute of your home in Montclair that I’ve been talking to about conducting a search for more than a year. The owner is 67 and in poor health, and he needs someone to come on to succeed him. They are in the sonar equipment business, and you spent the first five years of your career with Lockheed in their sonar division. I was thinking that if I showed them your resume, it would help me to nail down this search. Can I do that?”

To the uninitiated, this may sound like a great opportunity for Theodore, whose background sounds like a great fit. But here’s what’s going to happen:

Alvin is going to call the prospective client, and say that although they haven’t retained him, he can show them the resume of a local candidate he knows extremely well who has the perfect background, just as a sample of what his firm can do for them. The client will either say yes or no. If they say yes, Alvin sends them Theodore’s resume. If they like Theodore’s background, they’ll call Alvin back and say, “We’re not ready to retain you, but we kind of like this Theodore guy’s resume.  If you can arrange an interview and we hire him, we’ll pay your fee.” Alvin will stammer a bit, mumble something about how they normally don’t do that, and then say, “Sure!”

Alvin was expecting this. He had ambled over to the contingency side of the world, because he couldn’t get them to retain him. Theodore can bring him an $85,000 fee, which is a lot of money for a $27-million company to pay, especially in the long, cashless recovery of the Great Recession. Small, private companies are notoriously difficult for retained search firms to get as clients.

If they say instead, “We looked at Theodore’s resume and he’d be a possibility, but we’re not sure,” Alvin would say, “If you retain us, I can do a thorough search of the industry, and when complete, I can introduce Theodore and four other candidates for you to compare to him.”

At that point, Alvin will scour the industry, and probably be able to come up with five candidates with current experience in sonar/navigation equipment – Theodore is twenty years removed from his Lockheed experience. They’re unlikely to hire him out of the panel presented; he might not even be ultimately selected to be one of the candidates presented.

Theodore was not only wondering what to do, but also wondered, after hearing the description of the company, if he had somehow missed a company he should have known about. I asked Theodore when he last did a mailing to companies in his area. He said it had been several years. He had been depending on networking, job boards and recruiters for his job search, and really hadn’t researched and targeted companies within commuting range of his home.

Theodore is kind of stuck at this point. In less than an hour’s time, he could identify who the company is and send his resume to the owner, but if they hire him, Alvin is likely to find out. If they retain Alvin and hand Alvin Theodore’s resume as an example of someone they have considered, Alvin will also figure out what happened.  Theodore will be ever blacklisted by Alvin and his firm.

I told Theodore that he has a choice. He can tell the search consultant that he’d prefer to wait until he has landed a firm assignment (unlikely, because if he could, he would already have done so – it’s been a year), or let him float his resume in this veiled contingency fashion, just to stay in the consultant’s good graces (Theodore should already be in this guy’s good graces from his past contacts).

The Morals of This Story:

Moral Number One: If Theodore had simply researched prospective companies in his area (how many sonar/navigation manufacturers are there in any given area?), he would certainly have identified this company. It’s also likely that, considering that the company is local, that he could have found someone to introduce him. If not, he could have simply mailed his resume to the CEO and followed up with a phone call. That would have been just as powerful as this retained search firm’s introduction, and then the employer wouldn’t have had to worry about paying an $85,000 fee.

Moral Number Two:  This is a lesson about what some retained firms will do when times get tough (like now). They’ll resort to contingency, but in a way that will make it appear that they are still a retained firm, because they don’t want word to get out that they do some work on contingency. Be careful – many retained firms, even the best during the best of times, have been known to slink into a contingent M.O. when they couldn’t nail down a true retained search and the consultant figured he or she could make a buck. This Great Recession has created a different world, and some hungry recruiters are resorting to tactics they would never dreamed of considering in the past.

Alvin was pretty upfront about not having been retained by his prospective client. Most others will act as if they are working on retainer. You may get suspicious if they can’t provide you with intimate details of the job or you’ve heard on the street that another firm has been retained or you know the company well enough to know that they have a very likely internal candidates or something else they say sounds fishy.  If you ask if they have been retained, they may claim everything is very confidential at this early stage of the search, or say that they haven’t quite nailed it down yet, but wanted to line up some of the best people out there because this one will start soon, or simply lie and say they’ve been retained. Probe hard if it sounds like they’re not on a retainer. If a retained firm has been unable to land a contract and is proceeding anyway, it’s highly unlikely that you’ll get hired because of them. Otherwise, they would have been retained by the client.   




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