Recruitment Unbundled #1 - The mystery of headhunting
Over the next few weeks I am writing a series of posts on the world of recruitment explaining the different types, how to find a good recruiter, how to interact with them, the standards which you should look for, how the world of recruitment has changed and how to find a job yourself.
I certainly don’t know everything but have been doing this for over 20 years from London, Delhi and Sydney and the world has definitely changed but the art and skill of a professional recruiter remains the same.
I hope this helps a few people who have been asking questions about the recruitment industry and how it can help them.
In this first post I explain the world of a headhunter, what they do and what happens if they call you.
Is there a difference between a headhunter and a recruiter or agent?
The difference really lies in methodology, you can call yourself anything but in work and life it really only matters what you do.
Traditionally a headhunter (sometimes called an executive search consultant) does pretty much what the word describes. They hunt heads. They will go proactively into the marketplace to identify (search for) candidates who fit their client’s assignment brief. Headhunters may have fewer clients but their relationships are entrenched.
For headhunting businesses it has typically meant that the assignment is both retained and exclusive. Retained means that the headhunter is paid upfront for the research and in some cases for providing a shortlist of candidates, regardless of whether the client ever hires a candidate. This type of recruitment is reserved for senior confidential positions or hard to fill roles where there is a lot of sensitivity with regards the hire.
Why use a headhunter?
The public see the term headhunting usually associated with the hiring of a new CEO of a government department or ‘C suite’ in large multi national corporations. Executive search firms such as Korn Ferry and Heidrick & Struggles are often mentioned in the press and are actively involved in finding the next CEO or Chairman, Uber recently announced that it was appointing Heidrick to find its new COO after Travis Kalanick stepped aside. That is definitely common but there are many other reasons for engaging a headhunter.
It could be to replace an individual who has not yet been dismissed, to skill up and trade up in certain areas, or build a new team or further develop a division. Businesses engage with a headhunter because they offer discretion, confidentiality, anonymity and can explore the market quietly and secretly, they can also gauge the reputation of a client or individual in a way that a business simply cannot do. They can engage candidates who may seem out of reach.
Traditional headhunters also generally have no further interaction with their candidates after the process. This may seem harsh but the candidates are linked to one assignment and traditional search firms have tended not to introduce candidates to other clients speculatively – though this is also changing.
Exclusive means that the assignment is only handed out to one consultancy and that the client will not receive any candidates from another source, if they do the retained headhunter gets paid in any event.
Exclusivity, however, is not just for retained headhunting. I have run many contingent campaigns on an exclusive basis. This happens where the level of seniority is below where a client wants to pay a retainer and for work where I know that I will have many excellent candidates and where the client is making multiple hires at a time. In this case all applicants have to come through me.
Many articles on Linkedin will bemoan the practice of contingent recruitment as the reason for the demise of the recruitment industry and as a race to the bottom of the barrel. While there is a very low barrier to entry and many mavericks and cowboys operate as contingent recruiters, it is a vast generalisation.
Contingent just means that the fee is conditional upon success. A retainer means that you are being paid to deliver a service regardless of the outcome. Clearly it is better to be paid for your time than having to compete with everyone else but an exclusive contingent mandate run properly also generates the same rewards for both.
So what does it mean if you get call from a headhunter?
A genuine headhunter is calling you for one of two reasons, and in both cases it means that you are on their radar as a industry expert or an emerging industry expert:
they either want to discuss their assignment with you
they want to ask you for a suggestion for someone else. If you are an industry expert they may want to run a few names past you, of course you will never know which ones they will call or which one they may be working with. Of course your suggestions and comments will be both confidential and anonymous.
You don't need to be a veteran of your industry to be called by a headhunter, I have headhunted people in their twenties many times and still do.
The use of the word headhunter has become less specialist and just a word used by recruiters to sound better or more trustworthy than they are. That may seem harsh but as I pointed out earlier the label is just that. If you want to know whether they are a headhunter then ask them what they do and how they do it.
You don’t need to be on a retainer to headhunt and you don’t need to have an exclusive relationship but you do need to have trust, anonymity, high standards and most importantly you need to pick up the phone and speak to people who you don’t know and gain their trust. The art of headhunting is knowing information and market intelligence that no-one else has, being able to talk to anyone at any level based on the simple fact that they know and respect that your call is totally confidential. Headhunters also need to have very thick skin to get through layers of gatekeepers, when I started out we used to call it putting on your ‘rhino hide’.
Why do I get a call from a researcher not the consultant?
Research is the backbone of all headhunting, it is the engine which drives the business. Research or resourcing is finding the identity of candidates and all the background information that they can get before making a call. They put together a map of the market. The researcher is sometimes a trainee consultant and sometimes a professional researcher, they are often highly paid. They are treated with respect as their initial call is the first approach to a candidate and it is where trust is built.
The researcher will make the first call and take the basic information and level of interest before passing their details onto the consultant to interview. In many cases the researcher can also conduct the first stage interviews.
If you get a call from a researcher then you know that you are on the radar and you should treat them with courtesy as indeed they will treat you.
I am sure that there will be many negative comments about this appearing on social media as well but to be honest most of these candidates receiving a professional call will never tell anyone on social media about it – why? Because the whole point of the call is anonymity and confidentiality so the last thing they ever want to do is tell the world that they got a call from a headhunter. They may tell their friends over a drink but that is about it.
Researchers find talent that do not advertise their interest publicly and do not apply to job ads. They are passive candidates – meaning they are not proactively looking.
Why is there so much negative press about asking for referrals?
At the top of the market the process of headhunting is still so secretive and high up the food chain that all of the generalised comments about poor behavior just don’t wash – why not? Because there are complete professionals whose very livelihood is based on their discretion, confidentiality and trust. The roles often attract seven figure salaries and packages and unless you are fortunate to be one of those employees you will probably never hear from one.
The noise about referrals is because social media enables and feeds off controversy. The candidates and indeed some career advisers say that asking for a referral is none of the recruiters business and they only do so to get another name to market to.
Let's be straight about this. If you think that the person at the other end of the phone is unprofessional and you are behaving with courtesy then just say thank you but no and hang up.
A headhunter or indeed any recruitment professional who is good at what they do will ask for additional information for many reasons and one is because it is a business and information is their business. Some reasons are:
A referral helps them to connect to other candidates who may be looking, thereby helping them as well
It builds the picture of a team which helps to build an internal map or organogram. That picture helps to determine where that candidate sits within the team, who they report to and what they do. The client may have a view on that team and it is the headhunter's job to provide all of the information impartially.
They are genuinely asking for your help as an expert in your field as you may well know something that they don't and you may well have been a candidate before or will be one in the future. Headhunters are careful not to ask the same source too many times and the expression "don't burn your bridges" cuts both ways.
If you don’t want to help just be polite and say thank you but I cannot think of anyone.
The shortlist
One of the more contentious aspects of headhunting is the shortlist. A shortlist is a list of a handful of candidates who meet the clients needs and all of whom could be recruited. Of course there are usually one or two standout candidates and one of the difficulties is that clients can get attached to their favourite who may decline their offer and then they feel that the others just don’t match up to them.
Even if they do make a hire you will have only one success and the remaining candidates need to be nurtured carefully as they will have been in the process for quite some time and have developed trust, it can be a draining exercise.
In many cases nowadays the shortlist fee has been removed from the search process.
Headhunters never call me back.
I see this comment most frequently on linkedin. Firstly if you are a candidate who is being actively engaged by a headhunter in the executive search category or in the exclusive contingent category this will rarely every apply. Why? because you are their lifeblood and they are chasing you.
Remember that if you call an executive search consultant they are paid to find people and really don't work with people who apply to them. So their professionalism should lead them to reply but if they don't it is because they cannot help you, albeit not great customer service. I have a rule that all emails are answered with 24 hours.
Also check their website as some businesses say that they will not receive unsolicited applications. In the same way that corporations say if that if you are unsuccessful they will not contact you. I don't necessarily agree with it but it is best to follow their rules to avoid disappointment.
The other categories of recruitment deserve an article all to themselves about why recruiters don't return your calls. None of it is good. I will be writing about this shortly.
Fake headhunting.
This term never existed before the agency recruiter started moving into the headhunter’s world and the headhunter’s domain began to narrow and shift away from exclusive retained mandates. Of course these still very much exist at the top end but for many their mandates have morphed into a hybrid model as well. Back in the late 1990’s I was asked by the same clients to headhunt into the middle ground and be paid on a contingent basis, to use the very same methodology but only get paid on success. As the middle ground was made up of the selection and advertising agencies this was breaking new ground. The advantage of headhunting was that we could talk to passive candidates and nurture the relationship over time before the right opportunity arose for them, knowing that the agencies were entirely reactive and in most cases were not allowed to headhunt a candidate, their client terms forbade it.
We could beat them to it and they could not change their model due to client conflicts and non-poaching agreements.
Businesses had already started using the RPO (recruitment process outsourcing) models well before the recession of 2007/8 and they were building internal recruitment teams. This was accelerated post recession when clients started to use different methods for their talent acquisition and budgets were cut.
Fake headhunting is a term bandied around a great deal now by clients who still use search consultants on an exclusive retained basis.
Simply it is where the client has a relationship with the recruiter but not as a retained headhunter and where the relationship is still strong enough to allow introductions to the client but where the information is generic. A conversation may go along these lines.
Recruiter: Having better understood your needs and how you work I would love to be able to help you, is that possible, are we able to work together?
Client: Yes.
Recruiter: So please tell me which areas of your business you are building up or where I can help specifically.
Client: Well our retained headhunters get far more specific information and as we get to know you we will reveal more though I can tell you that as a business yes we are interested in hiring highly skilled like minded candidates with ‘x’ type of background and generally in these areas of our business.
Recruiter: Thank you. Am I able to make introductions to you as and when I come across someone who I believe would be of interest to you.
Client: Yes, of course we would never close that door. Please though do not go around the market telling people that you are working for us or that we are actively looking. Do not fake headhunt.
What the client is saying is that yes we can build a relationship but you do not have the authority to act on our behalf as a headhunter to go into the market with our name. You can talk to candidates but when you do so you are merely saying that you have a relationship with us but that the client has no finite roles in that area, what you are saying is that it is entirely speculative. Headhunting is an express authority to go out and look for someone who the client will hire all being well.
Having speculative conversations and being the eyes and ears for a client is not the same thing as retained or exclusive headhunting – there is a lack of absolute authority.
When I started headhunting the nature of what we did was so secretive that we would not even reveal the name of our client to a candidate at interview unless we felt that they were both suitable and relevant for our client. I am sure that today there would be countless ‘horror stories‘ knocking around social media as to what a terrible person brought you in for interview and did not even have the courtesy of revealing the client. All I can say is that at the top end of headhunting that is how it worked and it worked well, the cat was never let out of the bag and both clients and candidates accepted that. Indeed many new relationships were built on that Swiss banker model of complete secrecy. Nowadays with the vast amount of data available via internet search and professional databases, a lot of the mystery has been removed. Though of course these people are not saying I want a job or even I want to talk to you, they are building their personal brand in a world where a career for life has not existed for a generation.
The true headhunter is able to unlock the door to opportunities that will never be advertised and to nurture a candidate relationship over time providing mentoring, career coaching and guidance to enable the candidate to secure the role which best suits them technically, emotionally and intellectually.
The reason that clients are happy to use both traditional search and the hybrid model is that they accept that even if they know all of the candidates they would like to hire that sometimes third parties have better relationships and that independence helps them negotiate at arms length. Headhunters both retained and otherwise have access to information that clients just don’t have or don’t have the time to find out about.
In my humble opinion a headhunter is someone who is research driven, has well developed relationships based on trust and who is able to proactively go into the market and make direct contact with a candidate wherever they may be and whom they have had no previous relationship with. Yes you may label that the ability to cold call, but they are doing so forewarned and armed with many different bits of information. It is never really cold.
Ed Andrew is a headhunter, consultant and mentor. He is the founder of the Human Consultancy which is based in London.