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Tough Market Leads Job Recruiters to Use Hardball Tactics

Recruiters are facing renewed pressures on their revenues as they compete with social-media savvy in-house hiring teams for candidates and mandates. A minority of them are even resorting to underhanded tactics, like pretending to be job seekers, in an effort to maintain market share as vacancies dry up.

We spoke to leading recruiters in the US, UK, Singapore and Australia about why their industry is changing and how this is affecting the behavior of their more unscrupulous rivals.

“The rise of social media and resume databases, along with more direct recruitment, means everyone has access to the same information online,” says a director of a London recruitment company.

Adam Zoia, CEO, Globcap, a New York-based executive search firm, adds that social media is hurting contingency agencies the most because it gives employers greater direct access to their traditional candidate pool. “At the higher-touch, retained, search end of the business the macro-economic picture has been more the driver of slower business,” he says.

In Australia, agencies are now often seen as a last resort in a recruitment hierarchy that gives first priority to internal mobility. “Hiring managers are using LinkedIn to direct source and they are working their referral programs harder,” says Dominic Moore, director, 325 Consulting, Sydney. “The increased focus on cost means that clients are ‘having a go’ themselves, and sometimes getting lucky, prior to using an agency.”

Asia no longer offers much respite to recruiters fleeing the West. Singapore and Hong Kong have become saturated by an influx of start-up firms, typically led by British and Australia managers, over the past two years. “A majority of them don’t have any track record, brand or experienced people, so they are struggling for revenue,” says Gary Lai, managing director, South East Asia, Charterhouse Partnership. “Many offer a higher commission structure to entice seasoned recruiters to join them, but with limited success.”

As market and technology pressures continue to grow, recruiters are trying to reach a small, exclusive group of candidates that employers and other agencies can’t access. Top financial professionals are being contacted so much that many are taking down their LinkedIn profiles, says a London recruiter. “The key for recruiters currently is creating relationships with the best candidates and knowing which one is right for a particular role and convincing them to go for it. It’s more of a sales-led model rather than simply resourcing, as was the case in the past.”

Targeting you

While most consultants are searching for these candidates in innovative yet legitimate ways, some agencies, particularly contingency ones, are resorting to more underhand methods. “I know of recruiters who will post fake jobs to build their internal database,” says a US recruiter. “There was one who actually took pictures of the name tags on the check-in table of a client event. Then you have those who will advertise preposterous salaries for jobs just so they can lure high-caliber candidates.”

Recruiters are becoming more aggressive in targeting employers, too. Moore in Sydney says: “In order to win new mandates, recruiters are upping their KPIs to make more calls, more floats and more visits and they are pressing candidates harder for leads. As clients are less willing to pay retainers, jobs are open for anyone to float a candidate in with a higher chance of success.”

Gaining market information from candidates is a priority, says a veteran New York recruiter. “It gives you places and jobs that you weren’t aware of before and I start looking at those companies as potential clients. Also I can introduce other candidates that I’m representing to that employer.”

A candidate and eFinancialCareers blogger in Singapore says recruiters are often more interested in his job-application history than in finding him work. “Before they end the call, they usually ask me the all-important question that I presume is their main purpose: have I gone for any interviews recently and who were they with?”

Recruiters are always on the lookout for information, as a Sydney-based manager and blogger found our recently: “A headhunter called me for a reference check on a colleague. As I was answering her questionnaire, it gradually dawned on me that she was probing into our company as well. She then had the temerity to ask whether I would be interested in seeing the resumes of candidates who would be perfect in filling the hole that she was creating.”

Tricks of the trade

But while raising targets and getting more market gossip are age-old responses to a downturn, recruiters’ hunger for new business is now leading to more unprofessional tactics. Lai has seen consultants at other firms in Singapore do the following: “Sending resumes to showcase their strength and quality without qualifying the role or even speaking to these candidates; over-promising clients on delivery; aggressive and constant harassment to get new clients; misrepresenting candidates with incorrect data; undercutting fees; and hiring junior and inexperienced consultants at lower cost.”

Cowboy recruiters are also known to post bogus resumes online to attract clients, says Kyle Blockley, director, KS Consulting, Singapore. A headhunter in the competitive Singaporean private banking market adds that his competitors sometimes call him pretending to be job seekers. “The ‘journeymen’ recruiters, who tout themselves as ‘we’ll do anything’ generalists, are most guilty of this. But I don’t tell them the name of the bank over the phone. I suggest meeting for coffee and a chat, at which point they end the conversation rather quickly.”

A few consultants in London are taking an even more direct approach by applying in writing to their rivals’ advertisements, according to a recruiter there. “Recruiters are creating great resumes to send to applications, so that any recruiter would find it hard not to call them back. When they do, they try to gather information about the client. In banking, which is so process-driven at a contingency level, even if you get the name of the client, it’s doubtful whether you can do much with it since the hiring manager works with an RPO company or has a preferred list of suppliers.”

More rarely in London, recruiters attend networking events pretending to be candidates. “But it’s a brave person who does that. The City’s not such a big place that you’ll never see these people again, and if you do, that’s your reputation down the pan.” A US recruiter adds: “Any firm that has a good relationship with their client shouldn’t fear the mere information that the client is looking because presumably the client would be loyal to their search partner.”

High-level search firms, however, aren’t always angels. “What the retained firms do is hire outside researchers to do the same kind of ruses to get the names of people that the smarmiest contingency recruiters use. Often what they do is outsource it and then don’t ask how the names are gotten,” adds the veteran New York recruiter.

Additional reporting by Fred Yager and Beecher Tuttle in New York, Paul Clarke in London, and Tessa Bedford in Sydney.

AUTHORSimon Mortlock Content Manager

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