In the June 16, 2020 Ask The Headhunter Newsletter an executive gets an ultimatum from a headhunter.
Question
I am an executive at a large U.S. bank. I was approached by a headhunter and have had serious and positive discussions with a company he represents. We were at the next stage of me speaking with the CEO of the company. However, it turns out that the company is a business client of my bank and the CEO of the company is good friends with my boss. On account of this, the CEO is not comfortable meeting with me. The headhunter informed me that the CEO has asked me to resign or notify my boss of my intention to resign before he will meet with me and resume discussions. While they have indicated that they would then “fast track” the process immediately after that, it’s not a guaranteed offer. This seems absurd to me. The headhunter tells me this is not unusual at my high level, but I have never heard of such a practice. What are your thoughts?
Nick’s Reply
This is a good example of the headhunter’s version of mixed signals. “Let’s talk about a job!” Then “We can’t talk to you about a job!” Not unless you quit your job first. Go, then stop, then go? What’s behind all this? The headhunter’s naivete or the CEO’s incompetence?
You’ve had multiple interviews with the company. They have undoubtedly read your resume and know where you work. So does the headhunter and the company’s HR department, which knows the company’s recruiting policies. Now the CEO interjects and implies there’s some sort of conflict in even talking with you because he’s your boss’s friend and the company does business with your bank.
What a mess. How absurd. How unprofessional. Why did they bring you in to interview at all?
Recruiting conflicts?
Perhaps the CEO thinks he’s a paragon of ethical behavior in not hiring anyone that works for any of his friends or who works at any company his company buys from. He has manufactured a significant and risky constraint on who his company can hire.
Last week I chatted with Mac Prichard on his “Find Your Dream Job” career podcast. Have a listen: Choosing your target companies, with Nick Corcodilos.
The only true conflict would be if the company’s contractual relationship with the bank forbids the company from recruiting its employees. I’ve never heard of such a thing. (However, it is common for a contract between a headhunting firm and its client company to forbid the headhunter from poaching the client’s employees. But that’s a different story.)
Friends and fiduciaries
If the friendship between the CEO and your boss is the issue, then that CEO should stop recruiting anyone. How many friends does he have and at what companies?
The CEO has a fiduciary obligation to his company. This means he must act entirely on his company’s behalf and best interest. That includes when hiring. Unless there is some contractual or legal obligation preventing him from recruiting and hiring you, the CEO may be violating his obligations to his board of directors. His duty is to hire the best candidates, whether his friends like it or not.
Do you think the CEO disclosed to his board all the companies where he has friends, and from which he will not recruit candidates (like you)? Does HR know which companies represent forbidden fruit? Apparently not. That headhunter certainly doesn’t know.
The CEO’s company will have no access to all those potential candidates (like you). The company would be foolish to limit its access to good candidates.
Headhunter demands it
Far more bizarre is that the headhunter demands you resign your current job just for the chance to meet with his client. Absurd? It’s insane, irresponsible, kooky and the sign of an employer you should cross off your list and warn your friends about.
Additionally, the headhunter’s explanation is disingenuous. If the company has a no-recruit list and your bank is on it, why doesn’t its headhunter know about it? Why did he recruit you from your bank, on behalf of the CEO’s company, and put you through multiple meetings? The headhunter is wrong. He owes you a big apology for his and his client’s unprofessional conduct. (For more about how to deal with headhunters in such situations, please see How to Work With Headhunters… and how to make headhunters work with you, pp. 26-33.)
Off the rails
This is so far off the rails that you might consider having some fun with it. Tell the headhunter you’ll quit your job if the CEO will write you a check for a year’s salary if he doesn’t hire you for at least a 15% compensation increase within 3 months. You want the check now. You will refund the money if the CEO hires you.
Alternately, tell the headhunter you want to hear this directly from the CEO. You want to see the “no-poach” agreement the company has with your bank. You’ll get none of this, of course, but it’s a conversation I’d love to hear!
Good for you for stepping back for a reality check. You’re dealing with a very naïve headhunter and with a CEO that’s mismanaging his company, from the HR department up to the C-suite.
Perhaps he should hire his friend (your boss) to protect their friendship. Maybe that’s what he’s planning anyway.
On to the next!
What do you make of this bungled recruiting episode? Has a headhunter ever issued bizarre demands like this? What would you do if you were the candidate? What would you say to the CEO and the headhunter?
: :
I would not want to work for a CEO who had that attitude. I could not work with someone like that.
#1 CEO’s (and many other executives) don’t always know the ‘rules of the [recruitment] road’ and may, as this CEO has done, make them up to suit himself and/or what he thinks is ‘best for everyone’. This kind of ignorance is not uncommon and unfortunately I’ve run into similar invented ‘solutions’, myself. (The executive in these cases is usually aided by a similarly ignorant HR staff member, driving the process internally. A classic case of the blind leading the blind.)
This CEO looking to do the hiring needs a more experienced HH than the one s/he has working for him/her now to guide him in this recruitment process.
The part that matters is that this kind of foolishness is too often the tip of the iceberg and as Nick points out, what other parts of his behavior as a CEO is Looney Tunes? Run, Don’t Walk.
#2 Shoot the HH, he is a moron and is dangerously inept. Following that, shoot his manager.
Paul Forel
Executive Search
@Paul: I fully expected a stern comment from you. Thanks for not disappointing me. I hope others note carefully what you’re saying here. (Note to all: Paul is a seasoned headhunter.)
Not only are HR and headhunters woefully out to lunch much of the time, but CEOs, other C-level execs, and board of directors are shamefully ignorant of the ins and outs of the recruiting and hiring process. In this case, a CEO may be violating his fiduciary obligations to his company and losing a potentially excellent hire… while HR continues to shovel billions into bottomless data dumpsters like LinkedIn, Indeed and ZipRecruiter, pretending to be “recruiting.”
And that “headhunter” needs to find another job.
I used to run into this sort of lunacy, certainly at a lower level than CEO.
On occasion, the contract firm I worked for would have me at the Biggest Fish In The Pond Co.
Other recruiters would have something interesting (like FTE rather than contract).
Pretty much universally I’d here some variation of “we can’t poach you from Biggest Fish because of our relationship with them”. Universally, their relationship was as a wannabe that only provided candidates who would never be considered.
This was because Big Fish hired call center staff through ABC, IT staff through XYZ, and developers through a firm in India. Anyone else was just wishing. They could have pulled all their candidates from ABC or XYZ, and Boone would have cared.
This CEO absolutely makes no sense. What is he expecting to happen? You give 2 weeks notice, then you’re free. Now he hires you. As if his friend won’t make a connection and ask. As if that doesn’t change whatever conflict of interest he thinks he has.
My company has an agreement with our two competitors that no one will pouch from each other. We all have the same customers, the US Navy.
@Jim: No-poach agreements are not uncommon. But between competitors? Ahhh… I smell a rat. If I’m the US Navy (or a taxpayer), I see this and I quickly conclude your companies are not competing to bring the best service and pricing to the Navy, and I worry there’s other collusion.
My ire is not directed at you, of course. You kinda qualify as a kinda whistleblower :-)
Well another view is that the headhunter is trying to put you in a position he controls one of having to get a new job. In that position he is able to drive salary, benefits, etc – a much better power and negotiating position for the recruiter.
A friend of mine had a similar interaction though at the CFO level supposedly. My friend had friend that went to grad school with the CFO and she called him just to catch up. The result was the recruiting firm and the HR director were relived of duty. My friend is now the CFO of the firm he was thinking about leaving. Universe works in strange ways.
Wow! Great point! Your leverage is totally gone
@Keith M: Thanks for pointing that out. I left it out of my column because it was already too long. What you describe is a very under-handed way to “control” a job candidate. It takes a pretty naive candidate to fall for it.
There’s an even nastier variation: The headhunter (or the employer) makes an “anonymous” call to the candidate’s boss and discloses that the candidate is “out looking” for a new job and possibly even names the new employer. The boss summarily fires the person and the result is the same: The headhunter and new employer suddenly have dramatically more control of negotiations over the newly unemployed job candidate…
In a similar vein, I had a company interview me extensively as I had direct experience with developing a drug similar to a compound they were going to develop. I’ll skip the part where all of the interviewers asked me pointed questions about details regarding the specific drug’s development while taking copious notes (I kept it vague, which seemed to frustrate them significantly.)
But the pinnacle was when the CEO offered me a 1/2 time consulting contract, no benefits (with so many egregious clauses that my attorney absolutely almost had a stroke over it) with the rationale that they were also planning to hire a senior exec VP in charge of the department in the next 6 months, and “we expect he will want to hire his own team, so we can’t offer you a full-time position now, but we PROMISE you’ll likely be high on the list and he’ll hire you straight away.” Except this promise mysteriously somehow failed to make it into the consulting contract.
Yeah Right, we have a term for this – it’s called a “brain suck.”
Needless to say I told them to pound sand, and left a scathing complaint with the recruiter and CEO of the recruiting company, not that it likely did any good.
Then for the cherry on top, the recruiter actually tried to connect with me on LinkedIn yesterday. I reminded him of our prior interactions – I’ll publish if I actually get an answer.
@Hank: That’s a gem of a story! Brain suck is right! As for the recruiter reaching back out to you on LinkedIn, my bet is that he had no idea who he was reaching out to — it was mindless, or automated.
Good for you for sending them all to the sandpit. Thanks for sharing!
This scenario actually happen to me a few years ago. I was in a situation where I was happy in a role and this recruiter contacted me about an opportunity. In the course of the conversation, he told me flat out that I “must quit my job” so that he could submit me to this opportunity. I asked him what guarantee could he provide that I would get this job? He couldn’t answer the question. The conversation ended right there.
@Will: Every time I hear stories of recruiters suggesting/ordering/demanding that a prospective job candidate shoot themselves in the foot, arm and leg “to get an interview or an offer,” I marvel at how stupid those recruiters think people are.
Then I hear about some sucker who followed the instructions.
The I get an e-mail from the sucker asking me “what recourse” they have and “can they sue somebody?”
Kudos to the O.P. for raising the red flag.
“Are any companies off-limits?” A question I would always ask the client – especially a new client.
This is a strange version of an ‘off limits’ situation. Quit your job based on a a good solid ‘maybe’? Come on.
I would be vary shy of this headhunter.
@Peter: Good for you. So few recruiters understand the ins and outs of this business, I think because turnover is so high in the headhunting biz that they never have a chance to learn anything.
This recruit let his ego over-ride common sense. First he should have delved into who the recruiter is, who he works for, and their reputation. Obviously this wasn’t done.
#2. Big question is what type of friendship the CEO of the new company has with the recruit’s boss? Since the CEO’s company is a client of the bank, this poses many questions. I would speculate the company has deep financial involvements with the bank, which could explain the clandestine approach by the CEO. The probability factor of this is such, the recruit should cease all contact with this company.
#3. The recruit could put himself on shaky ground. Should aspects of the relationship between the CEO of the company and the recruit’s boss unravel or the business involvement between the company and the bank sour, the CEO could “spill the beans” about this little affair to the bank boss. As such, the recruit most certainly would become the fall guy and end up unemployed.
#4. The recruit should immediately cease all contact with the CEO and his company and also fire the headhunter. In addition the recruit should prepare a plan to implement should the need arise whereby he informs his boss about this situation.
This scenario reveals how inept all parties are. The CEO is inexperienced and a low level thinker. The headhunter is merely after a buck and enhance his reputation. The recruit’s ego will get him into a similar situation down the road. This is a classic example of a truism in business today, “common sense is an endangered species.” Come to think about it, this truism applies to life also.
@Headscratcher: All good points, but where in this episode do you see the candidate erring? I don’t see it. When the candidate learned of the CEO’s “position,” the candidate seems to have walked away — or at least started asking questions. The headhunter and the CEO (and presumably HR) all either dropped the ball from the start, or engaged in wishful thinking. I can’t blame the candidate.
If I were in this situation I now think that I would, in addition to ceasing contact with the recruiter, start looking for a new job. I would feel kind of funny staying with the original employer.
Companies can fire you on a whim. Watch out for yourself. Many people are loyal to current employers to their own detriment. If I smell trouble I find another job. (Sometimes easier said than done, but I usually get a job offer at just the right time.)
@Kevin: I’d be worried about that friendship between my boss and the CEO. What if the CEO brags to my boss that the CEO “did the right thing out of respect” for me? Now I’m marked, the CEO is a hero, and my boss has the goods on me (as if “loyal” employees are never out interviewing for jobs!).
No Poach agreements, legal or otherwise, are a reality.
There was one among top companies in Silicon Valley, broken only when Facebook ignored it. Almost immediately there was a major boost in engineering salaries.
One ting I have not seen is if there are any non-compete agreements (and the terms).
Having worked for contracting companies at various times, I have worked in situations that the client company could not hire us unless we had a minimum of six months of separation.
I also know a couple people who have been burned when they tried to switch employers due to non-compete agreements.
This in no way excuses the the headhunter of CEO…if they have any hope of recruitment, they need to know and abide by policy. Up front.
Also, it is not unusual at high levels to have various agreements for future employment to address these issues (pre-employment packages can be negotiated, just as severance packages can be negotiated).
Thankfully, the candidate got fair warning before getting on board with a mess up company. He might want to bring it up with his current boss…it is likely going to come out at some point.
I live and work in California. Non-compete agreements are illegal here.
CEOs certainly do some goofy things.
I was once fired from my job as MIS Director (I was never certain exactly why but my disobeying the CEO by buying a copy of office productivity software for every PC we were purchasing instead buying only one and making copies for everyone might have had something to do with it) and replacing me with a consultant from the company that developed the software that was running the company’s warehouses. I’ve always suspected that his plan was to get free support for the software—which I found odd as I was told to never modify the software like my predecessor had been doing. I heard later from former co-workers was that the hire wound up seriously damaging the relationship the company had with a critical supplier. Less than a year after being hired, my successor was fired for embezzlement. A couple of year’s later, the company was bought out. Karma’s a bitch.
@Rick: Never work for jerks. Or crooks.
Hmmm… sounds a bit shady. I would want to hear that from the CEO himself. I suspect the headhunter does have a non-compete/poach clause that he’s trying to finesse his way out of. The CEO might not be aware of the request made. At this point, I think it would be allowable to contact the CEO directly to be certain there are no misunderstandings.
My alarms tell me that this sounds like a loyalty test…maybe the CEO has already been in touch with his friend, and this could be a high stakes/high level game of chicken?
@Lesa: Ouch! That would be pretty bad!
That occurred to me as well, but the whole dance is shady and I’d beat a hasty retreat from the HH and the prospective employer.
Nick,
I really like your suggestion that since the situation is already a lost cause, the candidate “might consider having some fun with it.” Not only would I agree that the candidate should demand the CEO pay a year’s salary up front – with the aforementioned conditions attached – in exchange for the candidate’s agreement to resign from his current employer, but I’d also demand the headhunter to advance an amount equal to his entire contracted placement fee to the candidate, also completely refundable upon a successful placement. Otherwise, the headhunter has absolutely no skin in this particular game. Regardless of the complete farce into which the candidate has seemingly been drawn here, he can only benefit by demonstrating to both the CEO and the headhunter that he runs his professional life like a profitable business and is a proven expert at risk management – something that’s generally valued in the financial services industry.
Sheesh, Garp! You’re more fun than I am! We’d get into a lot of trouble together… ;-)
Something smells about CEO #1’s proposed path to his company. So on Monday you angelically impose a “no poach” rule on yourself/your company. But if the candidate is stupid enough to put himself on the street, via your manipulation, it’s now OK to scarf him up on Tuesday? & in the process insult the intelligence of your “friend” CEO #2. As if he/she couldn’t figure out what happened. And how about non disclosures? Seemingly ceo # 2 would pick up great insights on his friends operation in the bargain. As soon as the world “friends” popped up candidate needed to disengage from this particular chat, and find something else. Too many strangers in the mix, ceo#2, recruiter, and tbd aspects of ceo #1. I’ve seen managers take rejection personally. And if I’m so troubled about poaching, would I be troubled by not telling my friend one of his reports is looking around?
@Don: You found yet another nasty turn in this episode. Indeed, what about the CEO’s friend? If the candidate quits the job, gets the new job, will the candidate spill the beans that the CEO told him to “backdoor” the CEO’s friend? Ethics, indeed. Something smells.
Anybody with a phone and an internet connection can call him/herself a headhunter. The candidate’s judgement of the situation is spot on. This headhunter doesn’t know how to do his job, and the CEO is bad news. Or maybe it’s the other way around. Probably both! Even when we ask all the right questions up front, this nonsense can happen to us. At which point we walk, not ask the candidate to quit his job.
@Kira: Before there was an Internet, we used to say in Silicon Valley that all you needed to be a headhunter was a dime and a pencil. You could operate out of a phone booth and take notes on the wall. That wasn’t far from the truth. Still true today, unfortunately.
Having done search for 2 leading firms and on my own for 30 years, I’ve encountered hiring executives, HR executives and other recruiters who were found lacking when it came to the recruiting process.
While it is possible that this situation was the trifecta of naivete and/or incompetence among all three. My first thought was that the major fault lie with the recruiter.As others have pointed out, the recruiter didn’t ask the right questions up front or HR didn’t have off-limits discussion with him.
It is quite possible that the story the recruiter told the candidate wasn’t the true story. Possibly the recruiter made it up in an attempt to extricate himself from a sticky situation. In most, if not all, states it is easier to become a headhunter than a manicurist because only the latter needs to be licensed.
Run! Not worth the turmoil.
I thought in 2016 no poaching agreements were determined to be a violation of federal anti-trust law.
That’s mere FTC/DOJ “guidance” – not settled “res judicata” law. Don’t want to get too political here, but over the years, the Justice Department has issued plenty of flimsy opinions that have never been properly adjudicated in a competent court of law.
During this pandemic lockdown I had a headhunter tell me that the CEO absolutely required that I fly with my spouse, during stay in place order periods in both states, to have in person group interviews after I did weeks of web ex interviews. I suggested that I come and my spouse stay with kids at home. Someone refused. Don’t know who. Finally I relented and went with spouse because HH said you are top final candidate and it’s your job to lose. You know the ending. Didn’t get job. And even got ghosted for 5 days until I sent request for reimbursement. My biggest regret? I knew they were being unreasonable and I knew I should say forget it. Instead I allowed myself to be used. CEO wasn’t warm or that interested as soon as I walked in on day one of three days. I was not the top candidate. Still cannot believe this happened. I wasted so much time. At least neither one of us got Covid 19. That’s the only good news. And on the call telling me I didn’t get job, the HH said you were so overqualified I didn’t understand why you wanted this job!!!!
This seems a little shadier to me then other comments. What if the boss was going to work for his friend the CEO, but only wants to go if the “recruit” also works there with both of them. The boss knows of the no poaching and tells the CEO to get his HH to recruit the recruit first, then the boss will move over and business as usual at the new firm.
Screw them both. Sounds like boys club. Not worth it. Good luck next time.
Another thing to consider – it could be the recruiter who is attempting to protect his own interests. I have been in a situation where a recruiter was trying to recruit me for a role but was also attempting to keep this quiet as he also recruited for the organisation I was already working for! Any conflicts of interest may actually reside with the recruiter rather than the CEO, but the CEO’s alleged conflict of interest is just a ‘convenient excuse’.
Recruiting from a client, without that client’s knowledge, is the low of the low.
The way around this -as happened to me a couple of times- was to approach the client directly, asking for permission to approach the target recruit. Surprisingly, I was told, both times, to ‘go ahead, give it a try’.
Problem solved.