Editor’s Corner

May 1, 2007

A recent (and ongoing) debate about third-party recruiter ethics in various forums, blogs, and discussion groups has been long, tedious, and judgmental in the extreme. Lots of preening, finger-wagging, and tsk-tsking from both ends of the spectrum, with calls from the usual cast of characters for more governmental regulation to curb the very few miscreants who tarnish every industry, not just ours.

Most of the horror stories involve segments of the business other than the direct-placement sector, and although some are truly despicable, reminiscent of the days when workers were shanghaied and put to work in the fields and sweatshops, they are few and far between.

But swatting flies with sledgehammers doesn’t solve the transgressions of the minuscule number of problem practitioners; it just complicates the efforts of the righteous. We, as an industry, fought the regulation rumba many years ago, and trying to regulate a business-to-business relationship such as ours is just plain silly and counterproductive. California tried a self-regulation scheme in the 1980s, taxing our business to set up a state-sponsored regulatory effort in a vain attempt to clean up perceived problems. They appointed a chief regulator who, shortly into her reign of terror, embezzled the regulatory agency’s funds and flew the coop to the Virgin Islands. She was finally caught and prosecuted, but the whole thing was a laugh-out-loud uproar where the cure was worse than the disease.

Creating regulatory chemotherapy for what is no more than a common cold, just because a few in our business ride around on their white horses looking for a cause, is just wrong in so many ways. We’ve got enough roadblocks in our business. Another bureaucracy? Yea, right! Just what we need – to be saddled with more government nonsense administered by those who have no clue about what we do.

Jeff Allen’s March 2007 column on the Department of Justice fishing expedition (witch hunt?) into many in our business is but a small example of the harm any bureaucracy can do to a business just because they can – and just because they have to continually justify their pitiful existence. You don’t need to be clairvoyant to figure out that I loathe governmental intervention. History has proven that bureaucratic functionaries just don’t do very much well, despite what the industry nannies and busybodies might think. The recent travesty perpetrated against the Duke University students in the phony rape case is just a small example of government gone goofy. There are countless others. Scooter Libby, anyone?

Are there occasional malefactors in the permanent-placement profession? Of course. But the market almost always sanitizes them out of the business long before any governmental bureaucracy could react. Besides, there are thousands of laws that already address any problems that may occur. The last thing we need is an industry-specific governmental watchdog group with little or no authentic understanding about our business.

Many complaints about our business arise out of some sharpshooter from the human resources side of our transactions, trying to save face by not paying a well-earned fee for someone they mistakenly hired or thinking that they’ll become a company hero by stiffing a recruiter out of a well-earned fee because of some trivial technicality. How about some governmental regulation of those guys, too?

One reader analogized happily dancing with the most handsome guy in the room, only to have Mr. Ugly tap his shoulder to cut in. That’s how she compares the intrusion of HR into a process that is going swimmingly unfettered by the HR corporate bureaucrats.

That’s a Hoo Boy with which we heartily concur.

Here are half a dozen ethical dilemmas sent to us by readers. As you read them, try to envision how they could be better solved by some state or federal bureaucrat:

1. I belonged to a cooperative placement network for many years. During that time I accumulated a file cabinet full of résumés through other network members. Several months ago, I quit the network. On a recent search, I called one of the people I acquired from a network member, and although he didn’t qualify for the position, he suggested a coworker who was and who ultimately accepted the job offer.

No one in the network is aware of the situation and I didn’t end up placing a candidate from the network, but I would never have found the person without information acquired from the ex-affiliate’s original referral. Do I owe a split? If so, should it be a 5O/5O split or some lesser amount. What do you think?

2. One of my consultants has been involved in a several-month-long romantic relationship with the second in command of the HR department of our biggest client (33 placements so far this year). This individual controls all the hiring activity through the country. They just ended their relationship rather acrimoniously, and since then we have gotten the cold shoulder from the client. How do I reestablish our position with the company in view of the fact that they have already hinted that I should fire the consultant as a prerequisite to patching up the business relationship? He’s my best producer, even without this firm’s business. Any ideas?

3. The employment manager of a firm just approached me with a kickback scheme. He has offered to put our name on application blanks of walk-ins and ad-response candidates as the referral source. In return for these “gift fees,” he wants one-third of the fees (in cash). He says that there will be approximately $300,000 involved (with $100,000 to him). If we don’t play ball, he’ll take the deal to a more responsive recruiter and we’ll probably lose the legitimate business we do with the firm. How would you handle this?

4. We recruited a person for a first-time client and received our fee promptly. Once the placed candidate was on the payroll, the company reneged on promises made to her during the courting stage. She objected to her boss about the deceptive hiring promises, but her protests have done no good at all. We have attempted to mediate for the two months she’s been on the job, but to no avail. We have another client for whom she would be the perfect candidate. Can we ethically make this new connection for her?

5. After a very lengthy and difficult search that resulted in only one qualified and acceptable finalist and after extensive reference checking by both our client and ourselves (with excellent results), we learned through an accidental encounter that the candidate had been charged with a major embezzlement at a former employer (three employers ago) and that the reference which put him “over the top” as the winning candidate was, in fact, a co-conspirator in the embezzlement. Neither was prosecuted because restitution was made, and we have been unable to confirm this hearsay information through a second source. His record seems to have been clean since the episode of several years previous. Do we alert our client? How would you handle this?

6. A recruiter working for ABC Search is asked to fill an opening. The recruiter has the perfect candidate and tells ABC’s secretary, after describing the candidate to the company, to email the résumé to the client. ABC’s secretary screws up and emails the candidate’s résumé to the candidate’s current employer. The candidate, upset at this blunder, backs off and tells the recruiter to take a hike, and he calls the company and withdraws the candidate from contention. A note to that effect remains with the candidate file.

The recruiter leaves ABC Search and makes a deal with XYZ Recruiting to re-submit the candidate (who was mad at ABC but is willing to work through XYZ) and split the fee with XYZ.

The company wants to hire the candidate but doesn’t want to be liable for two fees. By the way, the company has a policy that pays the first recruiter who registers the candidate rather than the more enlightened policy of rewarding the recruiter who makes the placement come together.

Where are the equities here? How would you advise the company and why?

I’d be interested in your solutions to these situations. And while you’re thinking about it, you might want to ponder how any type of regulatory oversight or governmental involvement could actually solve them. I look forward to hearing from you, and we’ll publish your answers.

The industry is all abuzz over the upcoming Fordyce Forum 2007 in New Orleans from June 12 to 14. While there is still some room available, I recommend that you register today at if you wish to attend. You’ll be getting advanced tips, techniques, and strategies from an all-star faculty of big billers, many of whom regularly bill more than $1 million a year. I hope to see you there.

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