10 Things Your Headhunter Won't Tell You

In these days of layoffs and tough times, a good headhunter is worth a lot. But a bad one? Here's what to look out for.

But that doesn't mean you should send your resume off blindly. Some headhunters are obviously going to be better than others. And at a time like this, it is more important than ever to be informed and work with only the best people. So we've provided a list of 10 things to watch out for. They'll help you watch your back at a vulnerable time.

1.“I'll charge you when I shouldn't.”
Headhunters come in two flavors: "Retained" executive search firms, such as blue-chippers Korn/Ferry or Heidrick & Struggles, charge a company up front to locate candidates for client openings. "Contingency" search firms get paid by employers only if they place a candidate. The payoff? For both, around a third of your first year's salary.

Charging the candidate for a search is verboten. The Association of Executive Search Consultants, which represents 160 retained firms world-wide, expressly bans the practice. But there are headhunters out there who try to bill candidates thousands of dollars for "career services," thus potentially snaring fees at both ends. Some 8% of new applicants to the industry bible, "Kennedy Information's Directory of Executive Recruiters," are screened out for squeezing candidates for fees. Plenty of other firms doing the same thing don't even try to get listed. And then there are online ventures that charge the candidate, not the posting companies, for the privilege of trolling through their jobs databases. But as John Sibbald, head of a St. Louis management-consulting firm and author of "The New Career Makers," puts it: "You shouldn't have to pay a cent to find another job."

2.“I may be headed for extinction.”
If you're a rising star, recruiters are going to want you all to themselves. An exclusive relationship with the right recruiter who knows you well can lead to fantastic job offers, the right corporate fit -- and, of course, commissions in the recruiter's pocket.

But before you invest all that time and energy with a headhunter, take heed: He may be going the way of the eight-track tape. Web sites such as 6FigureJobs.com and Netshare.com have already begun compiling databases of $100,000-plus earners and matching them with companies -- a task previously the sole domain of retained recruiters. It's faster, and it's financially alluring: no middleman, no hefty fee.

"We think the math just makes that inevitable," says John Paterson, vice president of marketing at 6FigureJobs.com. "You can save yourself a lot of money by using smart research and using the right mix of sites." Paterson is seeing the shift "month by month": Whereas the site's subscribers used to be 90-10 recruiters to companies, it's now 60-40 -- and dropping.

3.“I have no idea what you do for a living.”
The explosion of high-tech jobs has been a boon for the search industry. Although overall global executive demand slowed down during the first quarter of 2001, technology companies are still hungry for talent with a leading 22% of all executive hires, according to Korn/Ferry International's Executive Demand index.

Too bad some recruiters don't know what they're talking about when it comes to technology. To be sure, many firms now have sector-specific high-tech practices. But there are plenty of headhunters who are just trying to pass. They might be up on the latest buzzwords, but that doesn't mean they're savvy about e-commerce. At the very least, it's a massive waste of time and effort to be chasing the wrong job. Worse, if you're taking the word of a clueless recruiter, you could be looking for another job as soon as you start.

"I'm in technology, so a lot of what I do is a little obscure," says Mark Aurora, a 29-year-old electrical engineer for Motorola in Austin, Texas. "It's just typical that you can list all your qualifications and give them a resume, and they don't understand what it's about. They call you back and say, 'Well, can you do this?' 'No, that's not what I do.'"

It doesn't happen only in high tech, either. Silicon Valley recruiting firm TransPacific Ventures' Tony Scott, then an up-and-coming banker, was contacted by a headhunter who "knew nothing about banking. I asked him, 'What was your background? Did you work in banking?' 'Nope, I was an undercover cop for the DEA.' I said, 'What about before that?' He said, 'Before that I was on the marine patrol for the Chicago police. I was the guy that fished bodies out of the water.'"

4.“I'm going to waste your time.”
You may be excited about an upcoming job interview, but the dirty little secret is you're actually "filler." That is, you're not really a good fit at all for a given position -- but you're sent to interview for it anyway.

"That does happen," says former headhunter Marijo Bos, senior vice president of Santa Monica, Calif.-based eCompanies, which funds Internet start-ups. "The search is so difficult that the recruiter can't find enough candidates, and so they talk this person into interviewing. They need another filler candidate, because it's an upset client."

To mask the fact that you're a square peg in a round hole, your resume might be, shall we say, tweaked by an overzealous recruiter who's stretching for a fit. This tactic revealed itself to an automation engineer for a South Carolina industrial-equipment manufacturer who was lured to an interview by a lavish job description -- and found that his CV had been altered almost beyond recognition.

"I said, 'What is that?' The interviewer said, 'This is your resume.' I said, 'No, it's not.'...They had changed the format completely, how I had listed the jobs and the skills," he says. "They only wanted to emphasize the things that matched the job description, so they could have an identical fit."

5. "I'm sending your resume everywhere.”
Since contingency firms get paid only if they actually place a candidate, the temptation is to carpet bomb your name across hundreds of companies and hope somebody bites. At their worst, some firms become like "boiler-room operations in securities sales," according to Scott of TransPacific Ventures.

The result: Your information could be mass-faxed by recruiters eager to make a commission or traded with others who might do the same. It could even end up in the lap of your current employer. "You should know who it's going to, and for what position," says Dudley Brown, head of Irvine, Calif., start-up staffer BridgeGate. "If an agency's reluctant to do that, it should be a real warning sign."

Even if you're careful, you might still get burned. Ask Michael Greiche, an auditor at a Wall Street financial firm, who had insisted on prior permission -- but didn't get it, as he found out when he approached a potential employer earlier this year. "They said, 'Your agency sent your resume here.' I said, 'I never gave permission for them to send it here.'...Sure enough, I found out two days later they also sent it to two other firms without my permission."

If multiple agencies are sending in your resume, a company might decline to hire you simply because "it looks like you don't know what you're doing," warns Brown. Or it might not want to get involved in a nasty fee dispute between competing headhunters who are pitching the same person -- even if you're the perfect candidate.

6.“We're too busy to worry about you.”
World-wide search revenue has climbed from $3 billion in 1993 to an estimated $8.3 billion in 2001, according to Stamford, Conn., search consultants Hunt-Scanlon Advisors. Even in today's slower economy, there is still a frenzy of activity with recruiters rushing to fill spots and hustling for new clients. As a result, some firms are "overbooking" themselves so as not to miss out on business. That means "too many assignments to actually give the detailed personal attention that people want," says Tony Scott.

One consequence: Your file might be off-loaded onto a junior person. That's what happened to Tim Hu, a Cheyenne, Wyo., systems analyst. Bounced around between reps, he ended up with a green staffer who "didn't quite understand what was going on." The result: Hu was placed at a financial-services firm with a far more buttoned-down corporate culture than he had been looking for. He left soon afterward.

7.“I make promises I can't keep.”
Watch out for recruiters and companies who offer the moon. While this was a more chronic problem during the go-go days of the '90s bull market when stock options were dangled like candy in front of potential recruits, it's still an issue. Headhunters still make promises they can't keep: How about that six-month salary review or training program that never materialized?

Derek Barrett knows what we're talking about. A 24-year-old database administrator, Brown was placed at a Los Angeles billing-software company. He agreed to a lowball salary because of the gold-plated training program he was promised. "The headhunter and the hiring manager specifically outlined which software packages the company was going to do formal training for," he says. "But it never did come."

Recruiters sometimes paint a far rosier picture of a given job than is actually the case. And that could lead to some very bad career decisions. "You have to think of your job as if you're buying a car: You wouldn't take the salesperson's advice," says Hunt-Scanlon's Lisa Sanders. "Do your own due diligence, so you can compare and contrast with what the recruiter tells you."

8.“You don't know me -- but I've got your resume.”
Since three-quarters of search firms have annual revenue of under $1 million, that means a lot of them are scrapping it out at the lower end of the scale. In the case of a desperate firm -- one whose agents are engaged in what TransPacific Ventures' Scott calls "glorified telemarketing, saying or doing anything to close a deal" -- the recruiter might pitch you without having ever met you, or even spoken with you about the job.

So how'd this firm find out about you? For that, thank (or, rather, curse) the Web. Because even if you simply post your resume on your personal homepage, it might get grabbed by a "robot" or "spider" program; these scour the Internet for candidates and drop them into larger databases.

"A spider can go in and grab 2,000 records in a couple of minutes -- literally," says Rick Miller, chief executive of CareerCast, a job and resume database-management firm. But while Miller's firm always gets job seekers' permission before using any resumes it finds, others aren't so scrupulous. Misuse of those records "is the norm," he says. "And that's the bad part. I'd say with most of your third-party recruiting firms, it's pretty ugly. All they care about is getting names."

9.“This job will self-destruct in three months.”
Don't expect headhunters to tip you off about a possible merger or downsizing. Even if they know, they won't tell you -- sometimes because they're legally required to stay mum, sometimes because it's just not in their job description to air a company's dirty laundry. After all, they work for them.

Take eCompanies' Marijo Bos, who, in her headhunting days, helped recruit a slew of people to Web site provider GeoCities, including then-CEO Thomas Evans. The firm was later snapped up by Yahoo! (YHOO) -- and Evans and company had to find work elsewhere. "The devil's really in the details, in terms of the kind of agreement you sign when you go in," says Evans, now CEO of Official Payments, an online tax-payment firm. "Change-of-control provisions or termination provisions -- those are the things you should negotiate. So if you do get acquired, you have protection in terms of your equity and your stake in the company."

But such stories aren't always about $4.6 billion acquisitions. Sometimes they're about imminent corporate meltdowns of which the candidate hasn't been apprised. "We hear cases of executives leaving good jobs to go to another company and three months later that company announces horrible earnings or a downsizing or bankruptcy," says Kennedy Information's Wayne Cooper. "But it's not the recruiter's responsibility to point out the problems that might exist within a client company."

10.“There's a lawsuit in your future.”
Lawyers must love the search industry these days. Why? Because any job move has the potential to embroil your former employer, your new employer, your search firm -- and even you -- in a fireworks display of legal writs.

Company-to-company lawsuits over talent pilfering have become almost commonplace: Wal-Mart (WMT) vs. Amazon (AMZN), Nortel Networks (NT) vs. ONI Systems (ONIS), Nike (NKE) vs. Gap (GPS). The bottom line for the candidate? Such a suit could hold up your appointment, or even block it altogether, especially if you signed a noncompete agreement and are jumping to another firm in your field.

More chilling are lawsuits that try to block appointments even if there are no noncompete clauses. Federated Department Stores (FD) sued the search firm Herbert Mines Associates for poaching Stern's Matthew Serra, who left to become CEO of Foot Locker. Herbert Mines was accused of "tortious interference" -- enticing Serra to break his contract. Meanwhile, Procter & Gamble (PG) sued recruiter Spencer Stuart and its client Alberto-Culver (ACV) for luring away a promising P&G executive. They're invoking the doctrine of "inevitable disclosure": that the employee will inevitably divulge information about his previous company, and thus shouldn't be allowed to make the jump.