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How Certain Barriers Operate Within the Recruiting Firm

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It's simple. Every recruiter in a traditionally ethical retainer firm is forbidden to phone any executive as a prospect for a job until he or she checks to determine that the executive:

Only if the retainer recruiter is lucky enough to hurdle both barriers, does he have permission within his firm to tell you about a career opportunity. Otherwise, it doesn't matter that you're his closest personal friend, or that he knows you're extremely unhappy with your current circumstances which, if allocation-to-another-recruiter is the problem, may even include unemployment.

The recruiter who wants to "use" you as a candidate simply cannot break the "off-limits" rules under which virtually all retainer firms operate. These rules are for the economic benefit of the firm and its individual recruiters. When one firm member helps himself by breaking the rules, he hurts his company and his colleagues. Such behavior is not tolerated.



The you-work-for-a-client barrier prevents you from being called as a potential candidate. However, it usually doesn't prevent your being called as a "source" of suggestions of other potential candidates. But only if the job would clearly be inappropriate for you... too junior if it's within your function (a Chief of Financial Planning, if you're a CFO), or in a different function (Marketing, rather than Finance). But even then, the traditionally ethical recruiter will ask you only for executives not currently working for your off- limits company. She'll want people who've been there and left, and people at competitive companies.

If the job might appeal to you personally, you will not be called, even for suggestions, because of the obvious danger that when you express personal interest and are told you're off-limits to the recruiter because of client conflict, you'll merely go straight to the employer. After all, you don't care about the recruiter's "don't-bite-the-hand-that-feeds" problem. It's not your problem... nor that of the recruiter's client, whom you'd like to work for, and who'd be delighted to have a chance to consider you.

If a job represents a fine career opportunity for you, and you'd be an ideal candidate, then both you and the potential employer are hurt-not helped-when the recruiter has to keep you apart. Therefore, the recruiter doesn't want you showing up on his client's doorstep and illustrating what fine candidates he's forced to withhold. And he certainly doesn't want your present employer to find out that he's emptying your office, after just being paid to fill the one down the hall. For both reasons he'll steer clear of you.

Moreover, it wouldn't be any excuse to say that you went ahead on your own after the recruiter specifically told you he couldn't make an introduction because of the You-work-for-a-client "Off-limits" Rule. After all, tempting you with the job, and then telling you that he couldn't introduce you is exactly the way he'd manipulate you into the hands of his latest client, if he were a sleazy operator with no ethical policy.

Think of dealing with recruiters as a game. You now know how the game works. But there's still a wide-open opportunity to improve your skills as a player.

The stakes are high. If you play expertly, and have a little luck, you may never have to do anything more to achieve career advancement outside your current company than just to handle recruiters effectively. Don't worry about what recruiters won't do for you. What they will do, if you treat them right, can still be the most favorable of all outside influences on your career.

That's why we'll pay special attention to the subject of executive recruiters. Despite their surface similarity when you deal with them as an executive intent on forwarding your own career, contingency and retainer recruiters are really operating two different kinds of businesses. And that's true, even though each may sometimes resort to the other's payment method.

The contingency recruiter is basically a broker, and the retainer recruiter is fundamentally a consultant. This clear distinction prevails, even though the contingency recruiter often gives the employer valuable advice, and the retainer recruiter has to deliver employees; advice won't suffice.

Contingency recruiters are in the brokerage business.

Contingency compensation...payment only if and when an introduction leads to a sale...is the central characteristic of all brokerage businesses.

The real estate agency is a perfect example. No matter how much work the broker puts in...no matter how many prospects are shown the property... there's no fee until there's a sale or lease. It's a volume business. The more properties "listed," the more chance of having what any buyer wants. It's a industries of interest to you, and find out who the very best people are. Then we approach them. The best people are usually well challenged and generously rewarded where they are. They're busy with their fast-rising careers, not answering employment ads. They're the ones you want...and we find and solicit them for you."

After sixty years, the original promise of retainer recruiting still represents its highest expression. Whenever an excellent retainer recruiter is sufficiently unimpeded by entangling client relationships, he or she can study an entire industry and select its finest people as candidates. Then the client can hire the very best person, and thereby shift the competitive balance of management power in the industry. As I tell my clients:

"Somebody's got to have the best person. Why not you?"

So the pioneers of retainer executive recruiting turned their backs on advertising. Instead, they reached for the telephone. Among retainer recruiters, it's been that way ever since. Even in Canada and the U.K., where many prominent retainer recruiters do advertise, telephoning is their primary technique.

For 60 years the retainer firms have proudly differentiated themselves from the contingency firms by not getting their candidates through advertising. Newspaper advertising existed, but the retainer firms always made it a point never to use it.

Suddenly the Internet exploded into view, with "employment sites" growing like mushroom clouds.

Specialists in Senior Managers...Not in an Industry

The vast majority of truly retainer firms-the ones making absolutely no referrals "on contingency"-are "generalists." They do not specialize in any industry, although some of the largest firms have certain recruiters who work mainly in specific fields. Retainer recruiters do specialize, however, in the higher levels of management. Corporations willingly accept a pay-regardless- of-hiring fee-structure when looking for senior managers. And of course salaries... and hence fees... are higher at the higher echelons. So the retainer recruiters seek upper-level assignments, while shunning lesser ones.

Moreover, at the senior levels, target people in the target companies are highly visible... even to a non-specialist. Also, any significant degree of industry-specialization tends to severely restrict the number of companies the retainer recruiter can tap, because of "don't-bite-the-hand-that-feeds" considerations. Most retainer recruiters would rather serve lots of industries with minimal restriction, than just one in a handicapped manner.
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