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Gambling for Hires

by
Megan Stanish
Oct 19, 2010, 1:59 pm ET

photo by Todd Klassy

Recruitment, at times, can seem a lot like a poker game. The client is the dealer, and every candidate is a player. At prescribed stages in the game, all cards are hidden, and bit by bit, each individual reveals his or her hand. Each show of cards is a risk. Sometimes the dealer wins, which is good because that means the game can remain solvent for other players to enjoy. At other times the players win, which is also positive, since a losing game draws no players. As long as the odds are relatively even and everyone abides by the rules, the game can go on. But what happens when a player steps up who doesn’t play by the rules?

A contract recruiter friend of mine — let’s call her Susan — has a reputation for respecting the rules of the game, and she expects her clients and candidates to follow suit. Because of this, a situation about two years ago shook her up, one in which a candidate seemingly decided to make his own rules.

At the time, Susan was recruiting sales candidates for a prominent organization, one with many customers as well as many aggressive competitors. With her flair for nailing her clients’ needs, Susan brought this company a candidate, Kevin, who seemed to be a perfect match for the job and the organization. He worked for the client’s primary competitor, so had an in-depth understanding of the business. He had a solid reputation with both his peers and his customers. In addition, his reasons for wanting to change organizations seemed deeply personal, not at all tinged with bitterness.

As part of the last interview round, the hiring manager spoke with Kevin in depth about the largest customer that he would support if he were hired in order to be certain of two things: first, that Kevin would understand fully the expectations of this specific role, and second, that she, the hiring manager, could be confident of Kevin’s ability to support the customer appropriately. This last interview round led to a job offer.

Kevin, Susan, and Susan’s client did the usual offer negotiation dance which resulted in an acceptance and the selection of a start date. Kevin seemed eager to wrap things up with his current employer and start his new job. However, at the eleventh hour, Kevin rescinded his acceptance citing vague reasons for his change of heart. Susan’s client was disappointed, of course, but Susan quickly found her a new, equally exceptional candidate who joined the client’s team. All seemed to turn out well in the end, with the company, final candidate and Susan all feeling as if they’d won.

Then came the game-changer. Around this same time, a new division within the client’s customer organization, the one Kevin had learned about during his interviews, opened its doors. About two weeks after Kevin reneged on his acceptance of the job, Susan’s client — the hiring manager — had to participate in a sales pitch to win this new segment of her customer’s business. As she and her team walked into the client’s office building to give their sales presentation, they passed the pitch team for her primary competitor, Kevin’s employer. The hiring manager stared at them in disbelief as she realized that Kevin was a member of this competitor’s sales team bidding on her customer’s new division. Needless to say, both the hiring manager and Susan felt that their confidence had been betrayed.

Unfortunately, to this day, Susan doesn’t know how this turn of events occurred. Was it deliberate or coincidence? Did Kevin share the information he learned during his interview with his employer, leading to Kevin’s assignment to the pitch team? Was this just an unfortunate twist of fate, one that Kevin possibly couldn’t reveal to his employer out of fear of showing too many of his own cards and revealing who tried to hire him away?

Susan’s client took a gamble, or rather an educated risk, in sharing confidential customer information with Kevin during the interview process. She showed her cards, as it were, to ensure that her next bet — hiring him onto her team — would likely pay off. Unfortunately, in this case she took a risk that not only didn’t pay off, it put her in a precarious position because the rules as she understood them — that information shared in confidence during an interview should remain in confidence — possibly were not followed.

Have you ever been on either side of a similar situation? What would you do if you were Susan or the hiring manager? What would you do if you were Kevin?

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Jared Hooste

    I don’t fault Kevin, the hiring manager has to take the majority of the blame for sharing proprietary information with someone not employed by her company. He probably didn’t sign a non-disclosure agreements during his interviews. And I don’t think it is common knowledge “that information shared in confidence during an interview should remain in confidence.” Only among HR professionals.
    It is common for employees to leverage companies against each other to maximize their own salary, so why would Susan assume that Kevin was not doing just that. It seemed like Kevin wanted more responsibility and Susan’s client thought he could handle it, so why shouldn’t his current company think the same thing.
    Most organization try to retain their employees, and if that employee had been given insider knowledge to get a new client it is in their best interest to retain them.
    Finally, lets get real, ethics in Sales that is just one giant gray area. If you don’t believe me go down to your local car dealer and count the lies the salesman is feeding you. I counted 10 this last weekend.

  2. Sandy Dhillon

    This is a interesting because I had something like this happen to me. in 1997 I worked for a courier company. Where they had me run and take care of there big contracts as routing manager. These contracts were very very big. I was earning good money for doing this and I was in my heart a very honest employee. But what happened was these contract manager used my name to try to keep their prices from raising through re-signing contracts by saying if they don’t agree to their term. They were going to give the contracts to me directly. My boss let me go of my services of the fear and he stated I was to smart and over qualified for my position for his company. So some times things are not as they seem,it’s all the way we view things
    and our inner morals of understanding of whats right and wrong.

  3. Megan Stanish

    I understand what you’re both saying and where you’re coming from. I absolutely agree that sharing proprietary information during an interview — even a late stage interview — is a big risk. At the same time, I look at it to ways. First, any smart candidate is going to want to know something (often a good deal) about the company and role for which he or she is interviewing, so if a company is entirely reticent to share anything, that company will lose good candidates. The risk must be taken to some extent. Second, this, to me (and to Susan) is a question of ethical business behavior. It’s true that some individuals will take advantage of any opportunity thrown their way — business intelligence accidentally shared by an unwitting friend, an idea shared by a colleague who hasn’t put it in front of the right executive yet, or information shared during an interview. However, ethical behavior dictates giving consideration to the context of the situation. For instance, say I find an unmarked, nondescript bag of money laying on the street, a bag with nothing to distinguish it from any other bag. A day or two later, I learn that a wealthy man has lost a bag of money fitting that description. I could keep the cash — finders keepers, right? and there are no identifying marks on the bag or money that would allow me to be caught — or I could bring it to the police. Ethically, I would bring that to the police, even though it could not be traced to me, because it’s the right thing to do. And likewise, I do think that candidates, in general, do not treat information shared in this context as “business intelligence” to use against the company with which they’re interviewing. Does it happen? Yes. Should it be condoned or considered acceptable business practice. I think not.

  4. Brian Kevin Johnston

    The Recruiter was Transparent, the Employer was Transparent,(which are EXCELLENT qualities for hiring TOP talent) but, the candidate however is a “JACK-ASS”…

    The Universe (karma) has a way in handling these situations on it’s time…

    I personally, would do “damage control” with my client, BLACKBALL the candidate, and most importantly, move on….

    Best to ALL, Brian-

  5. Keith Halperin

    I’ll modify the scenario:
    Let’s say Kevin hadn’t been offered a job- would it then be ethical of him to use the info to his and his existing employer’s advantage?

    Your thoughts….

    Keith

  6. Sandra McCartt

    The signing of a non disclosure of proprietary information by both the candidate and the hiring company should be a requirement. Although signing an agreement does not make a person ethical it deters the use of information by either party and can and has been enforced. A letter from the legal department of the company to Kevin should put him on notice or elicit a response to prove that he did not use the information gleaned during the interview process.

    Whether a candidate is offered a job or not does not have any bearing on the ethical use of proprietary information by either party. Hiring managers have often been guilty of digging for client information from candidates they had no intention of hiring. It’s what either party does with the information and whether it can be proven or not that is the test. If Kevin’s current company wins the client the hiring manager may have strong reason to pursue action against Kevin.

    Perhaps if the hiring manager had made a point that she was discussing proprietary information with Kevin which would fall under the non disclosure statement he had signed before the interview he would have been less likely to use that information or might have disclosed to her at that time that his current company was also in a position to pitch to that client.

    If Kevin were my candidate i would make a call to him to mention that there was a concern that he had used proprietary information gleaned during the interview. If nothing else he will either come up with an explanation or be nervous as a long tailed cat in a room full of rocking chairs.

  7. Howard Adamsky

    Great article!

    Engaging with a great voice and fascinating style.

    Hellooooooooo Megan!

  8. Megan Stanish

    I am enjoying reading everyone’s perspectives on this. Thank you for joining in the conversation!

    Sandra – That’s an interesting idea, one that I’ll bear in mind for future discussions with Susan and other recruiters with whom I am acquainted. I’d be curious how many companies use non disclosure agreements in the course of recruiting.

    Keith – Good twist on the scenario. I’d be curious to hear others’ opinions. To me, this still hints of ethics as well. I can best speak from my own experience as it relates to earning the trust of prospective clients. In the course of “winning” a client, we often become privvy to some level of sensitive information. I will not use information I learn in the course of trying to earn a company’s business – nor would I ever – to the advantage of another of my clients… whether or not that new business effort paid off.

    Howard – Thanks so much!

  9. Joe Goss

    I know it’s unethical, but if I were the hiring manager, I would be tempted to “out” Kevin (assuming he was accessible at the meeting). “Hey, Kevin…good to see you again. How’s the new job? Good luck, but I guess we won’t be pulling for you guys.” Then let him deal with the questions from his team (or at least some awkwardness all around).

  10. Steve Crumley

    Very interesting article, and even more interesting responses. I’m distressed about our colleagues who would jump at the opportunity to do something unethical as a way to seek revenge. What would that accomplish, and aren’t you stooping to the same level as the candidate you criticize? Doesn’t every transaction with a candidate have some future value? Think of how many other candidates he will tell about what you did to him!

    Regardless, I wonder if there was something missed during the close. Perhaps the recruiter missed an opportunity to discuss the “counter-offer”. Based on what’s presented in the article, I suspect what happened is that somewhere along the way, one of Kevin’s coworkers asked about his new job. When it was discovered where he was going, further questions ensued, and Kevin got a nice counter-offer from his current employer.

    Most people don’t consider the possibility of a counter offer, are surprised when it happens, and they make a snap decision that they regret later.

    If that’s what happened, will Kevin still have that job in six months? It’s doubtful. Whatever the reason he began looking for a job in the first place still exists in most cases.

    If you, the recruiter, take the time to discuss the counter offer with the candidate before you extend the offer, you can effectively take it off the table. How?
    - If more money will get him to accept the counter, encourage him to ask his boss for more money. Chances are that he won’t ask, but you put that thought in his mind and can help solidify his decision. If he does have the guts to ask and actually gets a raise (yeah, right), you know where you stand. If not, he knows where he stands. Either way, the issue is off the table.
    - If a promotion will get him to accept a counter, encourage him to ask for a promotion. Same result as above.
    - Remind him about his hot-buttons. His boss will still be the same boss he hates, the commute will still stink, or whatever he didn’t like isn’t going to change unless he changes companies or departments.
    - Get him talking about the potential of a counter offer so you can address any reasons he may have to accept it. If you can’t close him at that point, maybe you shouldn’t extend the offer.

    In any of these scenarios, at least you know where you stand, and you can decide what to do about it. But, skipping this critical conversation with your candidate takes away your opportunity to handle the objection.

    Obviously this doesn’t work every time, but it does help improve your closing ratio. If a candidate signs on the dotted line, then doesn’t start, something may have been wrong in the final close. Instead of seeking revenge, view it as a learning opportunity, figure out what happened, and do your best to make sure it doesn’t happen again. Which approach would your client appreciate more?

  11. Sandra McCartt

    In the biotech sector the non disclosure is required even when a candidate prefers not to fill out an application prior to interview. We recommend non disclosure agreements in all upper level sales positions no matter what the industry because there is always a discussion by both parties concerning current clients, sales volumes, new products etc. Any company with an R & D department will always have non disclosures to protect both parties in the interview process.

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