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Don’t Blame The Headhunters — Get Better at Keeping Your Employees

by
Fraser Hill
Jan 29, 2013, 5:02 am ET

iStock_000016676143XSmallWhile working in-house as a headhunter (the real market-mapping and cold-call headhunting “headhunter”) I often got asked the question about the ethics of direct headhunting from competitors. When I was giving a talk on the value of in-house headhunting at the 2012 Fall ERE conference in Miami, someone in the audience actually asked me this very question, “Do you think it’s ethical to headhunt from competitors?”

Naturally I smiled because I don’t consider it a question of ethics at all. I would go so far as to say it’s unethical to prevent companies from headhunting directly from competitors, because companies don’t own people. People just have a contractual obligation to work there until the time comes for them to decide that it’s time to move on. Choice and freedom are fundamental human rights in most developed countries!

Don’t just take my bullish pro-direct sourcing word for it though. As many of you will have read previously, in September 2010 The U.S. Justice Department settled with Google, Apple, Intel, Adobe, Intuit, and Pixar over claims they colluded to not “poach” from each other (cold call each-others staff). Yes, the U.S. Justice Department pursued these companies for agreeing to not cold call each other on grounds that it was anti-competitive for the labor market.

In a statement released by the U.S. Justice Department on September 24, 2010, Molly S. Boast, deputy assistant attorney general in the Department of Justice’s Antitrust Division said, “The agreements challenged here restrained competition for affected employees without any procompetitive justification and distorted the competitive process.” “The proposed settlement resolves the department’s antitrust concerns with regard to these no solicitation agreements.”

In a blog post, Google Associate General Counsel Amy Lambert said: “While there’s no evidence that our policy hindered hiring or affected wages, we abandoned our ‘no cold calling’ policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of this settlement.”

Now in July of last year a group of individuals have filed a similar case against some of the same companies and this time the trial is going ahead.

People outside of the recruitment industry, and even some inside the industry who don’t understand headhunting, use the word “poaching” which to me conjures up images of fishermen under the cover of darkness stealing fish from a private lake. If this word correctly described both practices, you would have headhunters doing all of their recruiting in the winter months when it was dark by 5 p.m., so they could hunt the unsuspecting competitor employees under the cover of darkness as they were innocently leaving their place of work.

Headhunting is not poaching. Poaching implies that the target prey or in this case employee, is taken against their will, or is illegal.

But no senior exec leaves a firm because they were bullied and pestered by a headhunter to move. Good professional headhunters approach potential senior candidates, call them, and in that first conversation establish first of all if they are open to a conversation about a potential career move at the moment. If they say they’re not, the headhunter may ask permission to tell them a bit about the role to establish who else may be in that person’s network to call, at which point the target may reconsider his or her response based on the information they just heard. That’s it! Consent to enter the discussion is sought and if not given, the conversation ends there. Whether that’s done by a direct competitor or through a third party, it’s all the same thing.

If it is so unethical for corporate firms to go and headhunt themselves from their competitors (and the U.S. Justice department disagrees with you!), why is it therefore ethical for almost every single Fortune 500 company to still engage senior-level headhunters to find their executives? Is it more ethical because a third party is doing the calls that your firm has instructed them to make?

In the criminal world, you’re still considered as bad as the person who pulled the trigger if you hired the hit man to do it. The person who hires the hit man can’t just stand there in court and say, “well I didn’t do it your honor, I paid this man to do it so it’s all his fault.” Isn’t the hirer just as guilty as the hitman himself because he ultimately instructed “the hit” in the first place?  So why after 70+ years of professional headhunting, when we do look to take the initiative in-house, are we all of a sudden dealing out the ethics card?

The healthy way to deal with the threat of headhunters coming to poach your staff is simply by creating the best possible work environment for your employees. That responsibility falls with every single employee in the company, starting at the top, inspiring people to want to not just join the firm, but to stay there. Good people are always going to be pursued by other companies. Smart headhunters either in-house or external, will know their market very well and know where the best people are, and will come knocking if your company has the star employee(s).

The in-house recruiting teams can play a huge part in creating that work environment, starting with the candidate experience.

  • Train the actual hiring managers how to interview and how to best represent your brand. Not just training, but sitting in on interviews and giving constructive feedback.
  • Having a structured end-to-end interview process in place where candidates aren’t faced with countless repeat interviews where too many people can’t reach a consensus on a hiring decision.
  • Having a clear and well-defined feedback policy for all candidates who come to interview with a service level agreement that hiring managers must adhere to in terms of providing feedback.
  • Having a first class onboarding process with adequate feedback channels to be able to track in real time, the effectiveness of them, and the satisfaction of the newly onboarded candidates.
  • Working with your own recruiters and suppliers to maintain accurate and up-to-date competitor salary and benefits information and leaning on the business to take action to maintain a competitive environment.

Obviously it takes a lot more than the in-house recruiting team doing a good job to keep your employees, but ultimately good people should be able to decide their own career fate, not their captor employers. Your company will no doubt have benefited at some point in the past few years from a star candidate being approached at another firm to come and work for yours, so it works both ways.

Rather than trying to fight off the headhunters, we can all be doing a lot more work to improve our internal processes and be more attractive to potential employees and our existing employees. The more we work on this, the less chance there is of your good employees leaving. So let the external and competitor headhunters come knocking. If your employees are leaving in droves, don’t blame the headhunters; your competitors just want to take better care of your employees.

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. Richard Araujo

    “So why after 70+ years of professional headhunting, when we do look to take the initiative in-house, are we all of a sudden dealing out the ethics card?”

    Mostly because of fear of retalitory ‘poaching’, which boils down to your title: concentrate on retaining your employees and you won’t lose so many.

    At my current company we recently lost an employee to a headhunter. When the owner found out he immediately ordered the CFO, who I report to, to have us do a search on all our available resume bases to see whose resume was “out there.” He wanted to confront them all and demand to know why they wanted to leave. Thankfully the CFO has talked him out of it, at least to this point in time. But the take home of this article that many people won’t admit because of lip service to best practices and what not, is that many companies do not want employees, they want a slave labor force. And while outright ownership of people is not going to happen, they will take steps to limit options for other employment.

    They won’t, of course, do anything so stupid as to try and make people want to stay by paying them and treating them well according to their performance. This is especially unlikely in the US where a vast portion of the workforce is employed by small to medium sized business owners whose firms’ growth are often limited by their own dysfunctional views and practices. Many employers think they’re doing you a favor by employing you. They do not see it as a mutually beneficial business arrangement, they view their employees as a cost which they only bear because they simply can’t do everything by themselves. That their employees are productive assets is simply not a mindset currently held by the majority of employers, even if they pay lip service to it. And they would much rather listen to a consulting firm that tells them to paint their walls taupe to retain people, which they can count as a capital improvement, rather than a salary survey which says they’re paying dramatically lower than market wages and should probably raise them to increase retention.

    I agree with your article’s conclusion, but as a practical matter the average company is… average. They either can’t or won’t implement a best practice because they aren’t the best and can’t or won’t support the best, sometimes because of cost, oftentimes because of simple resistance to change.

  2. Fraser Hill

    Thanks for sharing your views and personal experiences Richard – it’s always good to hear people’s thoughts, commonly shared or otherwise.

  3. Carol Schultz

    Fraser: Bravo. My sentiments exactly. My sister used to say she couldn’t believe how I would call into companies and “pirate” names and that it wasn’t right to steal people. Companies don’t own anyone. I have always said that companies will only be loyal to their employees only insofar as is suits their needs; hence, employees should only be loyal to their employers insofar as it suits their needs.

    @Richard:You comments about the owner of your company is exactly what’s “wrong” with so many companies, and the paradigm I’ve been working to change. If the owner or CEO doesn’t get that the most important thing s/he needs to be concerned with is TALENT, the company will never be as successful as they might have been. Without the right people in the right jobs and a talent strategy that is aligned with business strategy….well, you know the rest.

  4. Andre du Preez

    I’ve been in this Business for over sixteen years, and what you say in your article is very true.

    One of my Client’s has been utilizing my services for the past eight years and your statement “will come knocking if your company has the star employees”, apply very direct to them. But those who comes knocking has a challenge, my Client Company know they have some of the best on board, and look after their Resources.

  5. Richard Araujo

    @ Carol,

    The problem is that since not all companies can be the best, and not all recruiters can work for the best, then of what relevance are best practices to places where they can’t or won’t be implemented? For me personally I’ve found playing to a company’s strengths and being honest about its perceived weaknesses up front has made the biggest impact, because that’s essentially the cultural match. The tendency of most people in practice is to try and hide what they feel are the company’s negatives. That’s a real bad move in my opinion. And I think best practice articles and essays shouldn’t concentrate solely on what your company should be doing, but also what you should be doing to adapt a best practice to a less than best company.

  6. Fraser Hill

    @Carol – thanks for your kind comments. I’m glad we’re on the same page! I totally agree with you.

    @Andre – thanks – I’m glad the article resonates with your experience. Hopefully some people will leave your client from time to time to keep you in business! :)

  7. Martin Snyder

    A distinction should be drawn between people who work “at-will” and those with employment contacts. In the latter case, improper recruiting has resulted in tortious interference actions against the recruiter. If you work in spaces where contracts are common, you likely already know the rules, but if you don’t, you should consult competent legal counsel before dealing with that type of situation.

    In terms of ethics: they can never be bound fully by written rules. Words can’t hold the spirit of fair play, truthfulness, and faithful service- they can only barely contain people who lack character, but they can’t substitute for it, and that applies to every area of life.

  8. Carol Schultz

    @Richard: I could’t agree more about the circumstances you’re dealing with and mastering them rather than having your circumstances manage you. I do believe that all companies can be better, however. Your point about the relevance of best practices is significant from the standpoint of “won’t be implemented”. Of course, I can’t change every company. They don’t all want to change. Maybe I’ll put your suggestion about what to do when you’re at a company that won’t change in my article pipeline.

  9. Fraser Hill

    @ Richard – “The tendency of most people in practice is to try and hide what they feel are the company’s negatives.” I would have thought any recruiter doing this would eventually get bored of paying back rebates every month when the candidate didn’t work out and wise up to the fact that they have to give a balanced view on potential employers. To generalize and say this is the practice of “most” [recruiters] may be a little misleading, no?

    BTW most people here are recruiters just like you. The writers are just recruiters who happen to contribute articles. You should write the article you wish to see on here as you’re clearly very passionate about it which is always a great starting point.

  10. Fraser Hill

    @ Martin – thanks for commenting. Ethics is certainly a huge point of debate isn’t it? There’s a can of worms right there!:) What is right and wrong? Is it wrong to headhunt someone and “cause” a potential loss, monetary or otherwise to the company they work for? Is it right to overlook potentially the best candidate for a job, offering them potentially better prospects for them as an individual and their family, because they work at a competitor firm so shouldn’t be contacted? I’d imagine it would be close to a stale mate situation in any debate on this subject but would hope in the end the person comes before the company.

  11. Keith Halperin

    @ Fraser: Well said. As a note to
    “why is it therefore ethical for almost every single Fortune 500 company to still engage senior-level headhunters to find their executives?” Two words: “CULPABLE DENIABILITY”. You can have 3PRs “do what needs to be done” to get the people that are sought, without getting you/your own people in trouble, as in: “Will no one rid me of this turbulent priest?”

    @ Richard: Couldn’t have said it better. Also, you SHOULD write. Finally, the owner of your company was very heavy-handed with what he asked, but ISTM good sense that internal or contract recruiters should check up on resume boards to see who might be planning to fly the coop- I frequently do. Large companies could hire what I call an “External Employee Engagement Specialist or EEES” aka, “Snoop” to monitor employees’ external SN activity and perhaps use some of those new tools which indicate by their activity on FB, LI, Github, StackOverflow. etc. that someone may be thinking of leaving. In the event that some activity were noticed, appropriate actions could be taken to help diffuse the situation (if the person were valuable) or start the search for a new one ahead of time- either way much value is gained and money saved. If you prefer, you could offer your valued employees “multi-year, guaranteed-raise/bonus, no-termination-without-cause employment contracts”, and that’ll make sure the sane ones stay. I’d prefer to see companies employ the latter, and would expect them to see the former…

    Cheers,

    Keith “Think If I Used My Powers for Good and Not for Evil” Halperin

  12. Fraser Hill

    @ Keith – Welcome back! “But I haven’t been away”.”Ohhhhhh,we know!” :)

    Always good to see your comments Keith – thanks for contributing. I pity the readers who read your responses for the first time – it take a few of your responses to work out the Keithlish (your acronym language). I’m fluent now! All the best. Keep flying the flag!

  13. Bill Barnes

    The clients of mine who were most successful in retaining their top R&D talent had an environment of open communication between managers and staff. I’ve known several managers who were kept informed of their key worker’s job search status. While that may sound counter-intuitive, both parties stand to gain a lot. The manager is not blind-sided by having a key person leave suddenly. The worker gains enormous good will from their previous employers.

  14. Richard Araujo

    “I would have thought any recruiter doing this would eventually get bored of paying back rebates every month when the candidate didn’t work out and wise up to the fact that they have to give a balanced view on potential employers. To generalize and say this is the practice of “most” [recruiters] may be a little misleading, no?” – Fraser

    I was referring to people in general, HMs and recruiters, as I’ve had this issue with both in the past, contract side and corporate side for recruiters. I think good recruiters will be honest about a company, but there are plenty of resume mills out there taking a volume approach to overcome the losses they likely make.

    @ Martin
    Good points, the contract side isn’t often thought of.

    @ Keith
    I’d much prefer to let someone else storm the beach on using FB and other social media in that way. I realize that would keep me from being an innovator, but my personal views just can’t support it. I believe people should have performance goals and be measured against them, pure and simple. If they do well they should be paid well and treated well, if they do poorly they should be trained and corrected or let go if it’s perpetual bad performance for whatever reason. I personally don’t care about their social media presence or anything else, and I don’t think many if any people have the ability to make use of that kind of high level data/intelligence as it may relate to recruiting and retention these days. As such it’s more a violation of their personal lives when it happens than anything else. And all in all you should be prepared for someone to leave. What if they walk in front of a bus or something? They’re still gone, but you can’t plan for that. So you should step the preparedness back a notch and realize that anyone may leave at any time for any reason, and that retention in those cases where you can get warning is secondary to making sure you know what you’re going to do if it happens and you don’t have any warning.

  15. Keith Halperin

    @Richard. Your practical, sensible perspective is why you should write…

    “And all in all you should be prepared for someone to leave.”
    Correct in principle, as would a mutually beneficial employment relationship based on respect between two mature adults… In practice, many/most employers want someone to leave when THEY say so, not earlier or later. As far as “a mutually beneficial relationship based on respect between two mature adults…” I think way down deep a lot of employers would prefer an employment relationship based on domination & submission- if not a slave then a domestic animal. Think of a technical/professional superstar version of “Smithers” on The Simpsons- someone who lives to anticipate his/her employer’s wants/needs, and would be willing to die for them, yet could be tossed away without a care when no longer useful, and would be ever so happy to train his/her replacement… Folks, you think I’m being to harsh? Well, you may not have worked for some of the “pieces if work “I have….

    Drifting away from the rather creepy psychological stuff, it does make sense to me that an employer should wish to anticipate and minimize unnecessary turnover- just don’t ask recruiters to do it- it’s diametrically opposed to our interests, i.e. as long as there is money to pay recruiters, substantial turnover gives us work…

    Cheers,

    Keith

  16. Ken Schmitt

    Well done! This sounds a lot like someone claiming it wasn’t his/her fault they were engaged in an affair- people are rarely “lured away” and the victim of an affair. People don’t stray if things are perfect at home. The same is true of employees. If employees are respected, appreciated, adequately paid, all the things we read about over and over- they will not easily be pulled away or “poached.” Will a good company every lose a good employee even if they have done everything right? Yes, it may happen. And it may be the fault of the company. Other times, it just was “too good an opportunity” to pass up. But that does not mean a headhunter is to blame. In those cases, ti’s timing, In other cases, it’s a company who is failing to make an employee WANT to stay. In that situation, the headhunter is simply offering greener grass. And that’s called a free market.
    Ken Schmitt
    http://www.turningpointsearch.net

  17. Anmol Singh

    Excellent Fraser,especially the difference between Poaching and Headhunting.I am little young in this game but you’re the one who always there to help me to strengthen the basics.Thanks again you are the real motivator:)

  18. Fraser Hill

    @ Ken – I love the affair analogy! You just re-wrote the whole article in under 100 words – congratulations! :) Great summary and insight.

    @Anmol – thanks for your kind comments. Don’t hesitate to get in touch directly if you ever have any questions. fraser@headhuntin.com.

  19. Keith Halperin

    @ Ken. Well said.
    “If employees are respected, appreciated, adequately paid, all the things we read about over and over- they will not easily be pulled away or “poached.” Very true, but how many employers are willing to do all of these?

    Cheers,
    Keith

  20. K J

    Query: Speaking of holding on to your employees better:

    A: Is it OK for an HR Manager to:
    1. Monitor the online job boards to find which employees are considering jumping ship?
    2. Engage such employees (Not confront them) to understand what potential holes can be fixed? The immediate cost savings are obviously apparent. The tangential short term and long term implications are what I would like to know more about.

    B: Are such services offered by a third party vendor? I have looked high and low, but have come up empty.

    Thanks.
    KJ.

  21. Carol Schultz

    @KJ: In response to A1, yes. Anyone putting themselves out there on a job board publicly gets what they get. If you are going to put your info on the web it’s imperative you do so without a name or phone number if you don’t want anyone in your company to know. Make up a separate email address and have potential employers make initial contact that way. You should also keep the name of your company private, as in “confidential”.

    Also, yes to A2.

    Regarding B, can you be more specific about what you’re asking?

  22. K J

    @Carol. Thanks for the reply.

    A1. I was asking more from an HR Managers perspective. Is it ok to monitor job boards to see which of my current employees are looking elsewhere and engage them in the hope of changing their mind? More importantly, what are the long term and short term negative impacts of such a practice? It seems to be bordering on employee privacy rights. If not legally, then morally.

    B. Are there service providers out there that provide company HR Managers with an outsourced monitoring service?

  23. Carol Schultz

    @KJ: Still, yes. If someone is stupid enough to post publicly, they get what they get. Think Facebook. As for your B question. No clue. I’m sure you could hire someone to do that manually. It wouldn’t be too difficult to get done.

  24. K J

    @Carol. Thanks again. I do feel however that it’s not a black and white question with a yes or no answer. I am hoping to better understand the shades of grey involved…

  25. Ronald Gaines

    That was on a funny part I guess…..
    http://www.gsiconsultants.com/

  26. Rachael Stine

    It is the headhunter’s fault. Placement agencies are hiring unqualified personnel to place employees. They don’t know how to sell a potential employee. Many companies have lost the opportunity of obtaining highly qualified personnel with leadership abilities because placement agencies are not qualified to determine eligibility status of an interview candidate.

    IT IS THE HEADHUNTERS’ FAULT!!!!!!!!!!!!

  27. Fraser Hill

    @Rachael, Thanks for taking the time to comment but I think you may have missed the point of the article. “Don’t blame the headhunters” here refers to staff being open to calls about potential career moves (from headhunters). In other words don’t blame the headhunters for making your employees leave; you should get better at keeping your people. That was the premise of this article, not “are headhunters to blame for not finding the right people”.

    I think we may be speaking about different things when referring to headhunters. I’m guessing the unqualified people you’re talking about have never made a real headhunt call in their life. As you may know, it’s not the same as sifting through 100 job ad responses from candidates who are on the market.

    Best wishes, Fraser.

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