Internal recruiters in investment banks do not like search firms. They consider them expensive, duplicitous and delusional. And they would like to renegotiate their fees.
No internal recruiter is going to say any of this on the record. Off the record, however, is another matter.
"Search firms seem to be stuck in a different era," complains the EMEA head of recruitment at one bank. "They're still being extremely bullish and are requesting things like retainers."
"Search firms are living in a bubble," insists another. "They're not sharing the pain."
Antagonism between search firms and internal recruiters has increased since guaranteed bonuses became less common.
Historically, search firms charged fees that were a percentage of the total first year package of the individual they placed. When that total package included a guaranteed bonus, the fee was high. Now that guaranteed bonuses are rare, that fee is often lower. Search firms have attempted to get around this by increasing the fee as a percentage of salary. Banks don't like this.
Nor do banks like the fact that the percentage fee structure effectively incentivises search firms to seek guarantees for candidates. "This runs contrary to the bank's interests," complains the head of recruitment.
There are also complaints that search firms lie about fee caps - claiming that rival banks will pay up to 150k a hire, when the reality is considerably lower.
Understandably, banks would like to do something to emasculate pumped-up headhunters. Firstly, they'd like to stop paying them retainers. Secondly, they'd like to start paying them flat fees. Thirdly, they'd like to bring more hiring in-house.
Options two and three are proving challenging, however. "Flat fees are hard in areas like markets, where compensation varies widely by individual - search firms can feel hard done by," says one head of recruitment. Equally, where a hire must be made urgently line managers are often impatient to find the right person as soon as possible, and will ask search firms for assistance irrespective of the wishes of HR.
Nevertheless, an increasing proportion of banks' recruitment is being done without the intervention of external forces. Anything from 50-75% of hires are now done directly. At the top end, internal recruiters insist search firms are being dispensed with as much as possible.
"We're only using search where there's a real need," says one head of recruitment. "There's much less room in the market for the headhunters who are hangers-on."