Headhunting FAQs (Part 2)

We discussed the first 7 FAQs in Part 1. In this Part 2, we will discuss the next 5 common FAQs.

1. What is a Success-based (or Contingency) Search Engagement?

This is an engagement where the search firm gets paid only if the firm successfully fills a requirement.

When is it appropriate to use?

Ideal for non-confidential and mid-level requirements. Also appropriate for generic positions which are likely to be found in the search firm’s data bank.

How best to use this search model:

It is best to partner with only one, or at most two, search firms.

Should you adopt this model, it is best that you give the search partner a deadline, failing in which you should have the option to select a second or third search firm. A reasonable deadline is four weeks.

A second model which is quite common among companies not familiar with search processes is awarding the search simultaneously to several search firms.

This model, known as a “horse race”, encourages speed at the expense of process. Since they have no assurance of getting paid, their priority is to send as many CVs to claim ownership and they increase their chances of winning the horse race.

The above-mentioned model has been one of the culprits behind malpractices in the industry. When there are no processes, it becomes a hit-and-miss affair. When firms are encouraged to compete based on speed and when they have no assurance of being paid, shortcuts happen and the big loser is the client.

Yes, the loser is the client.

Not only does it not have any assurance that they are getting the best candidates, the client also incurs the hidden cost of screening, interviewing and assessing – tasks which should have been done in the first place by the so-called search firm.

2. Guarantees: Do search firms provide guarantees for the quality and suitability of the candidates they place?

Yes, but make sure this is included in the contract to protect you from unscrupulous search firms. The usual guarantee is 6 to 12 months during which time the Client company should be in a position to determine whether to regularize the executive, extend his probationary period or let him go. Should the executive be asked to leave within the six-month period for performance reasons, the search firm, is under obligation to replace the executive at no extra cost, except out-of-pocket expenses.

Please note though that the guarantee will not apply if the departure of the executive is a result of an unplanned relocation, unplanned re-organization, take over by another company or changes in responsibilities or designation which were not spelled out in the job offer.

3. Off Limits: What are ‘off limits’ in the search industry?

A candidate placed by a search firm should never be enticed by that same search firm to pursue other opportunities. This is one of the most common malpractices which caused the black-listing of a high-profile but notoriously unethical search firm.

4. What are other examples of malpractices?

Recycling of candidates: Placing the same executive in other firms several times.

Fee splitting: This is done by two search firms to go around the “off limits” restriction on one of the search firms.

Peddling of resumes: This is resorted to by search firms as a selling tool, on the off chance that clients will find suitable candidates from the peddled resumes. In most cases, the owners of the resumes are not aware that their CVs are being peddled. This practice not only opens the clients to being complicit in the violation of the Data Privacy Act, it also is a betrayal of the executives’ trust.

Conflict of interest: This happens when a search firm does not fully disclose working for a competing company.

Short cuts: This happens when candidates are endorsed without the benefit of interviews, assessments and due diligence.

5. As the CEO or HR Head of my firm, how can I help prevent these malpractices from spreading and hurting us?

First, ensure that you have an accreditation process for service providers. This way, you can ensure that they are SEC-registered and therefore not the fly-by-night types.

Second, ensure that in the accreditation process, they present their own Code of Ethics. If they do not have any, have them sign an undertaking that they will abide by a Code of Ethics.