Place ‘N’ Pull: Ethics on the Brink

A recruiter called me the other day and told me he had a great candidate for me to consider. This candidate was “so good” that the recruiter had already placed him three times in the last five years. I passed. He was amazed. Every business has its taboos and bad practices. I doubt many refineries encourage smoking on the job. Circus knife throwers probably take the night off if they have the “shakes” (or at least I am certain their assistants do!). Ministers rarely rob banks and few actuaries skydive (they know the odds). So it goes within our own little industry; we have our written and unwritten rules and customs. None is more “taboo” that the act of “place ‘n’ pull” (P&P), the practice of removing a candidate from the employer that paid you a fee for placing the candidate with them. But as in all things in life and business, it isn’t that simple. For although place ‘n’ pull may be odious to employers, it still happens–more frequently than we discover in exit interviews. But to understand something, you have to consider it from every possible angle. You must consider, even if don’t agree with, the different ways we all look at things if your ultimate goal is to control those things. The philosopher teaches us that there are six billion perceptions of the stars, because none of us can stand in the exact same spot when we look at the sky. To my recruiter friend, the true value and strength of the aforementioned candidate was three fees in five years. The issue was not skill, competence, loyalty, or long-term career goals. The recruiter makes a living by making fees. As an employer, the obvious weakness of this candidate was that he came with his own built in escape clause. At best, had I considered this candidate, I would be “leasing” him. The recruiter in question assumed that his value system applied to mine and therefore felt quite comfortable presenting his “killer closing statement.” But his view of the universe was limited to where he was standing, and he was incapable of understanding my view might be slightly different. <*SPONSORMESSAGE*> What are some of the reasons an agency recruiter would consider the act of place ‘n’ pull an acceptable business practice, and not just a matter of pure greed:

Inevitable Outcome: If the candidate called and advised the recruiter that he was leaving his current employer, the end result is inevitable. So what is the harm in participating, since enforcing ethics does not prevent the outcome, it only denies profit to the ethics-bound recruiter?

Failed Commitment: Candidates often call their recruiters after the fact and complain that promises made to them in the interview process are not being fulfilled or postponed. Some recruiters feel that this places their professional reputation in jeopardy within their candidate network, and feel an obligation to protect themselves by “correcting” the situation. If the company has in fact been less than honest in their dealings with the candidate in the hiring process, the recruiter feels “released” from their obligation through the clients failure “enforce” their commitments. Combined with the “Inevitable Outcome” rational, it makes a powerful, if not self-delusional, argument in favor of risking your reputation.
Failed Client Relationship: Often a recruiter will participate in place ‘n’ pull based on their belief that the client-vendor relationship has been stagnated or terminated by the client’s recent action, or lack of action, on other staffing efforts. This allows the recruiter to act on the belief that the current relationship is nearly non-existent, so what’s one more “nail in the coffin”?
Short-Sighted Sales Goals: Often a recruiter will look at each fee as an independent event. When you consider the $15K fee on the line with a placement of a $60K candidate on a 25% fee, well, you can imagine how much easier it is to construct “workarounds” to your ethics system. You might judge a person for being swayed by money, but how is your overall track record? It is easy to preach giving up the world, as you do not own it and therefore it is not yours to surrender! But part with a very small piece of what is truly yours in the name of honor, and you understand the challenge faced by good persons everyday.
The Cupboard Is Bare: The current market is driven by the absence of sufficient qualities and quantities of good candidates. That lack of “product” is making all of us review resume files from six years ago. Companies are now calling directly into other companies and trying a hand at direct recruiting themselves. Questionable practices are now being reviewed under the current ethical standard of “dehydration.” In the desert, even good people fight over water.

Now, before employers flood me with e-mails on how awful they think place ‘n’ pull is and how offended they are by my defense of it, I do not defend it. I consider the act odious. It violates simple business ethics and it defeats the common sense of building client relationships based on mutual benefit and earned trust and respect. But it still happens, it still exists, and I have seldom found solutions to issues by burying my head in sand (or anywhere else) or preaching platitudes. If nothing else, the biggest problem is we never talk about it. I have never seen an agency agreement or brochure brag about it. (“XYZ Recruiters: Don’t blink, you’ll miss us taking away the employee you paid us to refer!”) If it is not a questionable practice, why isn’t everyone who does it proud? The reason is that this is the acknowledged “third rail” of recruiting. Even those who practice it know that no rationale on their part will calm an outraged client. It is doubtful to the extreme that you will keep a client if they discover you engage in this practice routinely, or even only once. It violates the spirit and intent of most agreements. Often an agency recruiter will comment that as the candidate came to them, they really cannot be accused of “stealing” the candidate they had placed in a client from that client. But if that were so, why not call the client after the fact and advise them you “know” of the new opening in their organization due to the fact that you created it? The reason is simple, the client will not accept that reasoning. You see, the client is always the one who writes the check, it is their interests that a vendor is supposed to place ahead of someone who did not write them a check. Like, let’s say, a candidate. In that simple statement lies the true reason for agencies to avoid the practice of place ‘n’ pull: their clients consider it an unethical business practice. Smart sales people want to build client relationships. It is those relationships that keep the fees coming in when the economic slowdowns occur. It is those relationships that get your message or e-mail returned first, even though it came in behind twenty others. It is difficult to allow your ethics to make you “pass” on a $15K fee, but that is short-term thinking. In a 15-20 year career in sales, what is the dollar value to being an acknowledged “guru” and “good person” in the eyes of your clients? If your client has faith in you, they transfer that faith into the candidates you are referring and that simplifies your process. Simplification means speed, and in this market time is money. Ethics are profitable, if you are planning on being in the business longer than the current calendar year. It is not easy to walk by “easy money.” Clients should note and appreciate those vendors who enforce ethical practices over short-term profits and make an effort to increase business share with those vendors. All too often we encourage a behavior in our vendors by treating them all based on the lowest common denominator, and then act amazed that they responded to our low opinions by living up to them. As in all my articles, I try not to preach based on the “Golden Rule,” that was your parents’ job. But I always refer to the importance of a business practice based on it’s impact on the bottom line: the true and consistent “Golden Rule” of business. Well, the one underlying truth I discovered in my 20 years in business is that I have closed a lot of deals and negotiated a lot of contracts due to a reputation of ethical business practices. Ethics are not free. If they were, everyone would have them. But in the long run, ethical business practices pay back more than they cost. Conversely, the cost of lacking ethics almost always costs you more than you gained by giving them up. Some things in life make sense, ethics is one of them. You may have a dozen good reasons to engage in the practice that make sense to you. But I have one that makes the most sense: in the long run, the absence of ethics will cost you your reputation. And in business, that costs you money. You see, to clients it all comes down to one thing: place ‘n’ pull is not ethical. Ergo, only unethical people do it, no matter how many compelling and self-serving excuses they may have. Right or wrong, the client writes the checks. Have a great day recruiting!