Clash of the Headhunters

August 3, 2009 8:42 PM

Headhunter #1 calls me about Cool Hedge Fund (CHF) and wows me with stories of its coolness. He sends my resume. CHF "has already picked someone" and that is the end of that, I figure. A month, maybe two pass and I get a call from Headhunter #2: have I heard of Cool Hedge Fund? Would I be interested in a spot there? "Uh yeah I think I've heard of them... I suppose I would be interested" say I, nonchalantly failing to mention my prior submission through a different headhunter. This time they bite and I get a past the screener and the six-hour gruelling interview and find myself on the short list, one more interview away from the prize. All is well until one day Headhunter #1 finds out that I have interviewed with CHF under the auspices of a different headhunter. He mentions that were I to get the job, it would be a "big mess" - something about who gets fees, etc. What can I do? Who can I trust? Will it inevitably end in a battle with headhunters mounted on frothing lawyers and the CHF running away from the whole thing screaming?

I have already heard one discouraging story from a coworker who was in a very similar situation and was told by the company that they were no longer interested in hiring him because it would entail legal issues re: headhunters. I've already spent considerable effort trying to get this job and it would really be perfect for me. I'm pretty sure they like me, but I don't know what kind of legal arrangements typical exists with these headhunters - just by HH#1 sending my resume once, is he then legally entitled to a fee if I am ever hired for any position there? So far HH#2 doesn't know about HH#1 - I want to tell him, well, mostly so I don't feel like such a conniving bastard (I'd rather leave that to them). But I will keep my mouth shut unless someone has advice for me... Thanks a lot in advance, mefi!

posted by Astragalus to work & money (33 comments total)

Oops - didn't realize how much f.p. real estate that would take up. Please forgive - I have only rarely emerged from lurking in my lurker-cave to make psot.
posted by Astragalus at 8:46 PM on August 3

Not Your Problem.

It's too late now to worry about it. If you don't get hired because of this, well, that's annoying, and not really your fault. Otherwise, it doesn't really matter to you. The dealing is between the company and the headhunters. All you did was show up to a scheduled interview, and did a good job. Not unethical at all. (It looks like the first headhunter was just bad at his job. Not Your Problem. :)
posted by jrockway at 8:47 PM on August 3 [1 favorite]

You should know what you've signed with HH1, right?
posted by @troy at 8:50 PM on August 3

OK thanks - I feel better about my own ethics - but I'm still worried that HH#1 will be an a-hole and try to scuttle my prospects by insisting on the fee. I wonder if he is in fact entitled to anything... It may be the case that the position HH#1 submitted me for was a different position than the one I interviewed for, and therefore HH#1 deserves nothing and should try being a bit more gracious to get managers to listen to him. This is what I hope...
posted by Astragalus at 8:52 PM on August 3

Ah - in fact I haven't signed anything at all. But the problem is that the CHF may have signed something saying in effect that they can only use me if they pay HH#1 - then the CHF will have potential legal issues and would perhaps rather not deal with me. I also wonder at what point in the process, if any, the sh-t will hit the proverbial fan.
posted by Astragalus at 8:56 PM on August 3

You owe nothing to HeadHunter 1. To him, you're merchandise that he moves in order to get a commission. He failed to move you, and now someone else has, and he thinks he can intimidate you or the company into either cutting him in or denying his competition a commission (thus leaving a slot open that he still might fill).

I've worked at a recruiter (in IT) and used recruiters to hire people. The company may have signed something with HH1, but I doubt it, and the fact that they're using HH2 implies that there's no exclusivity agreement with HH1. Headhunters want such an agreement, but it's rarely in the company's interest, and most companies who use recruiters understand that they're not valued advisors, they're just another channel for getting resumes.

You might lose the job anyway because of the situation, and that'll suck, but it'll serve to remind you that headhunters are door-to-door salesmen of the Fortune 500 world.
posted by fatbird at 8:58 PM on August 3 [1 favorite]

I also wonder at what point in the process, if any, the sh-t will hit the proverbial fan.

Whether it does or doesn't, it's not your mess to clean up. And frankly, if the company lets HH1 browbeat them into scuttling the deal, then the company doesn't sound that smart to begin with.
posted by fatbird at 9:00 PM on August 3

Yeah, they actually don't seem like the type of company that would be pushed around by a bunch of headhunters - they seem like if they wanted someone, they'd damn well hire 'em. This is what I hope anyway. Meantime I'll just try to keep HH#1 happy until I eventually disappear (to move in with my great-granny-in-law in Nunavut) and work my butt off 14 hrs a day happily ever after at CHF.
posted by Astragalus at 9:08 PM on August 3

Meantime I'll just try to keep HH#1 happy until I eventually disappear

HH#1 pulls this bullshit on you and you want to keep them happy?

Me, I'd just stop talking to them altogether. No contact at all. They ring me, I hang up. They email me, I bin it. If they come to my door, I pretend to be somebody else. Screw 'em.
posted by flabdablet at 9:12 PM on August 3 [3 favorites]

If it's a different position (same job/ different position), you have nothing to worry about.

If they haven't signed something regarding you personally with HH#1, you have nothing to worry about.

If they haven't signed something with HH#1 company for all hires, you have nothing to worry about.


If they have signed something about you specifically, or this specific job with HH#1, you have something to worry about.

The odds of this are on balance quite unlikely: you have little to worry about. Flag it with HH#2, and forget about it.

The moral of the story is you should never talk to recruiters about other jobs you are applying/interviewing for. It's none of their business.
posted by smoke at 9:22 PM on August 3

I've had this exact problem.

Keep cool, tell HH1 to sort it out with HH2 and not to call you again. If the HH mentions lawyers tell them that's fine, put it in writing then put it out of your head. He will go to his boss and his boss will say? "So? you lost, why aren't you out there making me money"

How can it be your problem? The hedge fund will pay the fee to the successful recruiter- The recruiter's argument has nothing what so ever to do with you, or your future performance as an employee.

Good luck with the job, and when it's bonus time remember me.
posted by mattoxic at 9:22 PM on August 3

The Street is awash with both people looking for jobs and headhunters trying to find jobs for them. The hedge fund has all the power here. If you are the person they want, they will tell the headhunters what's what.

It sounds like you'd be a relatively junior person rather than a hot shot portfolio manager. The headhunter won't want to ruin its chances of placing a Big Swinging Dick at that hedge fund because it put up a fuss over some junior hire.

If someone from the fund asks you about this, just repeat what you've told us: "Headhunter #1 said the position was filled and little later this other headhunter called me." Everyone uses multiple headhunters, so this isn't surprising.
posted by mullacc at 9:35 PM on August 3 [1 favorite]

Call the guy's bluff. Tell him to put his complaint in writing and send it your way, you'll look over it and so will your (possibly nonexistent) lawyer.

He won't waste the time.
posted by wfrgms at 9:52 PM on August 3

If HH1 calls you back, ask him why HH2 was able to get you so much further in the process than he was. That pretty squarely puts the blame on HH1.
posted by fatbird at 9:52 PM on August 3 [2 favorites]

You've dealt in good faith, and HH1 failed. Their failure is not your problem, nor, frankly, is it the hedge fund's.
posted by rodgerd at 10:15 PM on August 3

Ignore him, it sounds like he's pissed and mouthing off - he can't possibly hope to achieve anything by threatening you directly. You have no say over how the company decides who gets the fees and you didn't sign anything with him so you're not in breach of contract. You also don't even have the job yet so the whole issue could be moot.

Keep trying your best to get the job and let HH1, HH2 and CHF sort it out between themselves. Its not your problem.
posted by missmagenta at 2:31 AM on August 4

I think he's fucking with you only because the hedge fund won't let him fuck with them. I say just never speak with him again, but save all his emails. Once CHF either ires you or does not hire you. You should send their director of human resources a nice email detailing HH1's behavior, explain why this isn't conducive to their goals of hiring the best people, and ask if she wants his emails.
posted by jeffburdges at 4:08 AM on August 4

If I was feeling really mean, I'd forward this information to his other clients HR directors too. :)
posted by jeffburdges at 4:09 AM on August 4

Think of it this way - this is your potential livelihood. When people threaten that you need to take action, not just wait and see what happens.

If this company has any idea of what it's doing, and it probably does, it would not have dealt with your placement via HH2 if its contract with HH1 stated that by submitting your resume first they have exclusive rights to place you for a fee. Most larger (and or sophisticated) companies, including my own, keep a resume database and will know that you were already submitted by HH1. If the company made a mistake and now has an internal conflict others are correct that it's not your direct problem, but you should still take some action.

Let HH#2 about the potential conflict. They may ease your mind by telling you whether a contract exists between the HHs and the company.

Then let HH1 that it will be a "big mess" if you don't get this job because of his interference (this is somewhat hard to enforce, but still worthwhile). Many of these headhunters/agencies do nothing more than collect resumes and send them out to companies without making sure that the candidate is qualified, or following up with the employee/employer. I know because I have dealt with them both as a job seeker and an employer. HH1 sounds like he is one of these worthless sacks. You should also call the agency of HH1 (if he has one) and note this threat, (and it was a threat) to his superiors. Then let them know that you will not hesitate to name the agency and recruiter and their actions in public forums. There's a good chance they will cease and desist because of the potential loss of business, ie resume submissions. You might be concerned that they will no longer "help" you find your dream job, but really, based on their actions to date it seems unlikely that would ever happen.
posted by kgbrion at 4:33 AM on August 4 [1 favorite]

I worked in recruiting for 5 years (on the corporate side, not the agency side). We had recruiting agreements with every agency we dealt with detailing things like fees and how long HH1 would be able to claim a fee on someone they originally submitted - usually it was 6 months.

You are under no obligation to any of these people. Most of whom are worthless sharks who would throw their own mother under a bus if you told them there was money involved. Generally the only thing they tell the truth about is how many zeroes should be on the check, and even that not very often. Let HR handle it. We had a few occasions where this was an issue - less and less often as automation and search improved - and in most cases the two agents split the fee, and lawyers never got involved.

I agree with flabdablet. Don't take his calls or emails.
posted by nevercalm at 4:34 AM on August 4

Been in the same situation before. The headhunters will try and put all sorts of pressure on to you and come out with the whole threatening talk about you losing the job because the employer won't want the hassle and so forth. In short, everything that you have described so far.

Anyway, the upshot was I mentioned in the interview that there was a fight between two agencies. The employer laughed and said they would sort it out themselves and not to worry about it.

Agencies do not want to throw away a vital stream of potential revenue on one position. They are also aware that HR recruiters move around, and, if they have a bad experience from one agency, they won't use them again.

I got the job.

Good luck!
posted by ClanvidHorse at 4:43 AM on August 4

I don't think posters are being fair to HH#1. He "mentioned" that there could be a big mess -- unless there was more to the tone or content of the statement, that wasn't a threat, that's a simple statement of fact.

While OP doesn't have an obligation to HH#1, the hedge fund may well have, and HH#1 may know his firm to be one of the HH firms that are very aggressive about enforcing fees in just this kind of situation, else clients would simply decline the candidates and then call them back on the QT a couple of weeks later.

(HH firms tend to be more aggressive with hedge funds and other smaller / infrequent users than they are with big banks and brokerages, which have a lot of repeat business and big professional recruiting departments who maintain informal do-not-use lists for HH's who aren't thought of well.)

Doing nothing is hardly the correct strategy. OP should notify HH#2 and the hiring manager with whom he or she has contact at the hedge fund, and tell HH#1 that. They can do something, or nothing, and hopefully it won't impact OP's case to be hired -- but doing nothing would be the failure to disclose a material fact about one's being free to be hired. Such failure to disclose is going to be seen by any financial industry employer as immediate grounds to stop a recruiting process or revoke an offer.
posted by MattD at 4:50 AM on August 4

You've nothing to gain by further contact with HH1, and no moral/ethical obligation as they did not progress you as far as HH2 managed. Ignore further contact from them. Any mess that results is not your fault and outside your control.

If HH1 does seem to be using intimidation or is unpleasant to you, then you can keep his e-mails and share with the HR at present company at the end of the process (whether succesful or not).
posted by Gratishades at 5:40 AM on August 4

I was talking with a recruiter about this yesterday, as I'm in a similar situation. Here's what I learned:

When a client (company) needs someone, they send out a requisition, usually in a computer system that can be accessed by approved recruiting agencies. The requisition has a number attached to it, and gives a job description and so on.

When a recruiter has a person to submit for the job, he enters the person's name and resume into the same system, for the specific requisition with a specific requisition number. If that person is selected for the job, then that recruiter gets paid.

When a client (company) sends out a requisition, they can later change their mind and put the job on hold. This may mean closing the requisition, or not. When the job later opens, if the first requisition was closed, they open a new requisition with a new number. Then, resumes are submitted to the new number. This means that the person (you) are no longer bound to any recruiter. If the old requisition is simply made active again, it's the same requisition with the same number, so you are still bound to whichever recruiter submitted you because it's the same requisition.

If two or more recruiters submit you for the same job, and this is not noticed at first, and you are selected, then it causes a problem because both recruiters want to get paid. The actions the recruiters can take are:
- Fight it out to the bitter end. This results in the client (company) saying basically, "forget it" and choosing a candidate that doesn't have this problem. Lawyers won't get involved; the client will just pick someone else because it's easier.
- Agreeing amongst themselves who will get paid.

Recruiters can easily find out who has submitted you into the system, and when. It's in the database that the client uses to send out requisitions and receive candidate information. Sometimes recruiters can see this, but oftentimes they need to ask someone at the client's office to look it up for them.

So, your action is to get the recruiters to find out if it was different requisitions or not, and if it's the same requisition who submitted you first. Then, ask the recruiter who first submitted you to talk with the other recruiter about this information, in hopes that the second recruiter will agree to let the first recruiter get the money. The benefit for the second recruiter is that he maintains an excellent relationship with the client (company), even if he didn't make money on this particular job.
posted by Houstonian at 5:41 AM on August 4

but doing nothing would be the failure to disclose a material fact about one's being free to be hired.

You don't think that is overstating the case? HH1 just wants his money and is complaining to the employee because he thinks it will work.
posted by smackfu at 7:00 AM on August 4

Smackfu: the justice of HH#1's complaint it not the issue. It is a simple fact that headhunters in HH#1's positions regularly do make serious trouble for employers who are in the position of OP's prospective employer, because their business model fails if people can avoid their fees easily. The existence of this dispute is a real and material fact that one cannot pretend doesn't exist.

Once OP found out about the potential real problem, it becomes his duty (any prospective employer would expect) to disclose just like if his current employer was threatening to sue over a violated non-compete or non-solicit, or if OP had plans to take a 3-month vacation and wasn't free to start until Thanksgiving, etc.
posted by MattD at 7:48 AM on August 4

I think that fundamentally your (and others') point is a good one: that ignoring the problem won't make it go away and by sitting on the knowledge I now have it could end up at least looking bad in the end. My plan now is to choose the person who is most trustworthy to first find out if HH#1 is in fact legally entitled to a fee (i.e., whether it was a different requisition/position that I was originally submitted for or the same one) and if so, hopefully negotiate a solution that wouldn't cost me the job. Does anyone know what kind of fees headhunters typically get paid for placing someone? Say the job has a salary of $100k. If it's not too bad I could potentially even pay off one of the headhunters out of pocket - it might actually be worth it to get this job. Meanwhile, I'm actually looking at other positions with HH#1 - I figure it's in my interest to stay on good terms with someone who could screw me if they wanted to, and also it couldn't hurt to have a backup plan. I think I will talk to either HH#2 who seems like a pretty professional guy, and has placed other people at this firm (although my fear is that he will decide to promote a different candidate over me) or the person in the firm who is handling the recruiting - she seems like a nice person and could probably tell me right away what is going to happen. Thanks a lot for all your wisdom, mefites!
posted by Astragalus at 8:32 AM on August 4

You may want to step in and try to work something out between the HHs so they have a split fee (maybe 25% HH1, 75% HH2). HH fees in today's capital starved economy hurt employment prospects of lateral hires because of the heavy downpayment that hedges/firms need to invest in their employees. It could be further damaging if their clauses do not contain minimum work period stipulations that may nullify the fees. Good luck with the situation.
posted by stratastar at 9:02 AM on August 4

My plan now is to choose the person who is most trustworthy to first find out if HH#1 is in fact legally entitled to a fee (i.e., whether it was a different requisition/position that I was originally submitted for or the same one) and if so, hopefully negotiate a solution that wouldn't cost me the job.

This is not your job or obligation, and in fact you're probably making it worse by involving yourself. The headhunters and the company are familiar with this type of situation. You're not, and your apparent willingness to facilitate HH1's attempts to strongarm a piece of the action weaken the company and HH2.

You should do no more than letting HH2 know what's going on. Since it's his commission at stake, he'll effectively fight for you to get the job. Follow HH2's advice here: he's effectively your agent, and he has the greatest material stake in you getting the job. If he tells you to talk to the company, talk to them, but don't bypass him. Don't talk to HH1 anymore at all.

hopefully negotiate a solution that wouldn't cost me the job. If it's not too bad I could potentially even pay off one of the headhunters out of pocket

Nonononononono. For a salaried position, the headhunters fee is typically 50% of the first year salary, so $50k. This is also a terrible precedent, like paying a head tax for a job, and feeding HH1's shark nature.
posted by fatbird at 9:05 AM on August 4

I agree with fatbird -- your job is to be an informed observer. Do nothing except express a willingness to have this resolved and work with either headhunter. Stepping in too much will not make you popular with any of the three parties involved, and may complicate it to a point that they choose someone else.

Please do not offer to pay either headhunter. I see exactly why this might seem to be a good solution, but everyone involved has contracts and agreements in place. Each headhunter works for the client company; that's how they get paid. If you try to strike a similar agreement, they may not be able to accept it because they will have a conflict of interest in that they are then working for you and the client company. If one of the headhunters takes your money, he may still try to bill the client, and this is a huge, unethical mess.

I usually work as a 1099, and so recruiters do not take a percentage from me at all. However, with 2 of my clients, I've needed a company to "payroll" me. That is, I'm still paying 100% of my FICA and I'm still doing my own tax withholding, but they are entering my invoices into the client's payroll system. For this, I've found it costs about 12%. By necessity, they take much more if you are working as a W-2 for the recruiting agency. Their portion of your FICA alone is 7.5%. Then they've got overhead, expenses, and profit to make themselves. I know that on occasion I've talked with W-2 contractors who somehow found out the recruiter's uptick on their pay as billed to the client; these have varied from 35% to an eye-opening 100%.

But again, do not pay the headhunter yourself.
posted by Houstonian at 9:40 AM on August 4

Look at it this way: You have no particular expertise in this problem. You're not a headhunter and you're not an HR person. The conflict is about timing, (possible) overlapping agreements, and hiring procedures. Inserting yourself into negotiations is an amateur blundering in where he doesn't belong. It's properly not even a matter of negotiations, it's a matter of the company resolving its own hiring conflict from using multiple headhunters. And what's most likely is that the HR person, if they want to hire you, will tell HH1 to give up his posturing in exchange for a continued business relationship. HH1 can't afford to alienate the company, especially in this economy.

You ask in your OP "Who can I trust?" You can trust HH2 this much: He has a strong material stake in getting you hired, so he's on your side that much. Work with him to be the perfect candidate. I had this much sympathy for the recruiters where I worked: some people fucked them over really hard by being total morons. The long interview process was nearly over, the $75k commission was so close they could taste it, and then the candidate went to finally meet the CEO and said "So my friend used to work here and really hated it, and thought about suing you! I hope you don't treat me as badly as you treated him!"
posted by fatbird at 10:04 AM on August 4

In no way should you step in to try to negotiate the fee between the 2 HHs and the company, nor should give even the slightest thought to paying the HH yourself. Please trust me on this. These fees can be, as said above, quite high.

On the other hand, economies like this where the talent pool is vastly increased render the agencies almost worthless...there are so many people on recruiting websites right now bc of high unemployment. So the fee might be minimal, and not worth fighting for the HH. There are so many possibilities here, and you need not be concerned with any of them. This is a problem between HR and the agency.

As for recruiters having automated systems, that may not be true in every case. I'm still stunned at how many companies still work with paper systems. If they do have a database that pushes out reqs to agencies, then the whole fee thing really is no problem.

Either way, it is not your problem. If the company doesn't even bother to keep track whether they've interviewed you in the past 6 mos or a year, I doubt they're going to worry too hard about this.
posted by nevercalm at 3:53 AM on August 5

Update: I spoke to HH#2 about the problem and he was very patient and good-natured about the whole thing, saying basically that the issue was between HH#1 and him and that it wouldn't affect my candidacy and that I shouldn't waste another thought about it. He basically said that he and HH#1 would work something out. I just heard back from HH#1 who was also pretty nice about the whole thing - he said that normally since he had submitted first HH#2 would just be screwed and that would be that - but the deal was that the hiring manager decided to increase the fee and wanted the 2 headhunters to split it. Anyway I'm not going to think about it any more - tomorrow is my big final (6 hour hellish) interview and I hope everything works out to everyone's mutual benefit, as it seems it certainly could. I'll post a final update after I find out if I got the job, for the benefit of those who are also in this situation (both HH's said this happens periodically). OK, thanks mefi!
posted by Astragalus at 8:02 AM on August 10