Why 'hidden candidates' are the holy grail

These are still not easy times to be a 'contingency recruiter' of the type who sends CVs to banks in the hope of charging a fee if the CV owner gets hired as a result.

On the upside, recruitment is picking up substantially. March new vacancies were up 83% year on year in the City according to Morgan McKinley.

On the downside, large swathes of jobseekers have been touting their CVs on the market for the past two years, and banks aren't willing to pay for a CV they've seen plenty of times already.

From a recruitment perspective the candidate market for is therefore splitting into two.

On one hand, there are candidates who've been knocking around the market since 2008 and are virtually unplaceable (for a fee). And on the other, there are candidates who kept their jobs during the downturn, and are only now coming to the market.

Everyone is chasing the latter.

"The real problem is that after the recession, it's a candidate saturated market," says one contingency recruiter. "Recruitment companies already have hundreds of identical CVs on their databases and the trick is to try and find a new person. It's incredibly hard."

Preferred supplier lists are forcing the issue

The rush for new blood is being accelerated by banks' increasingly stringent requirements regarding preferred and approved supplier lists. Nowadays, recruiters have to be on them, period.

"It's very binary now," says one headhunter. "If you're not on the list, you won't get paid."

Getting onto the list usually involves a lot of time spent pandering to HR, and heavy amounts of bureaucracy.

However, recruiters say HR pandering can be circumvented if you have the holy grail: a candidate whom a line manager wants, and who's CV isn't available anywhere else.

"In long only asset management, you won't get anywhere if you're not on the preferred supplier list to begin with," says a director at one recruitment firm.

"However, investment banks are often more commercially driven - if you've got a good quality and original candidate to put in front of a hiring manager, they'll often act as your sponsor with HR and procurement."

The upshot is that contingency recruiters are increasingly being forced to act like search firms, and unearth hidden candidates.

"It's all about having good relationships with candidates and working with guys who aren't actively looking and don't proactively get their CV out on the market," says a consultant at one.