THE STICKY STUFF !!

That's right, the great Sandra McCartt and Amy Ala are back with the 2nd installment of The Sticky Stuff! Find our first discussion here. As Sandra so eloquently describes us, we are "a classy internal corporate recruiter and the 'Phyllis Diller' of third party headhunting actually collaborating on something".

Send us your questions and we'll help solve all your recruiting woes or at the very least give you our no-holds-barred opinions on the good, bad, and ugly found in our industry. This week's sticky stuff -

Dear Sticky Stuff,

I am an internal recruiter. I just discovered that one of my co-workers is getting kickbacks from a third party recruiter. Sometimes it seems to be just gift certificates for dinner or drinks or something like that but now I think he is getting paid real money to push this recruiter’s candidates. He is eliminating candidates that I know are better candidates so the agency recruiter’s candidates are getting hired when they probably would not be if the best candidates were presented. I can’t prove it but I have overheard phone conversations that have convinced me he is being paid if the TPR’s candidates are hired.

What do I do? Do I ignore it , let him know I know and tell him to knock it off, call the owner of the Agency and tell him that one of his people is paying kickbacks, tell my boss. My co-worker is a good recruiter; I don’t know why he is doing this except that he likes the dinners and the money so I guess it’s simply that he is unethical. What should I do, or not?

Sandra says:

I literally hate this kind of crap. It happens a lot more than any of us would like to believe. I don’t like giving advice to anyone about what they should do in an unethical situation but I can tell you what I would do and have done when situations like this come up. I would scare the pants off the little crook by telling him a story about the recruiter at XYZ Company who got caught taking kickbacks from an agency. Lost his job, got charged with felony theft, conspiracy to commit fraud, graft, corruption and every other legal sounding word I could come up with. I would end the story by saying, “And you know how he got caught”? “One of his co-workers heard him on the phone talking to the agency recruiter and had noticed that he was eliminating better candidates for jobs to push the TPR’s candidates.” “Can you imagine how embarrassing and devastating that would be to have to go home and tell your wife and kids that you got fired for being a crook and may go to jail.”

I office shared with a recruiter that I suspected was in a deal like this with an HR manager. I waltzed in one day and said, “Hey, I am not supposed to say anything about this but one of my candidates is an auditor with (unnamed Big 4), he mentioned that they had been retained to do a defalcation audit of (un named company) because the board thinks somebody is padding invoices and paying kickbacks to vendors.” “He didn’t say but I suspect it is the purchasing department but I know you work with that client so just wanted you to know that there may be some turnover if they catch whoever is doing it.”

The gyrations that went on for the next few weeks were more fun to watch than an ant farm in a flood. He was on the phone with his office door shut more times than ever. He was digging through old invoices that had not been out of storage for years. I heard him through a very thin office wall calling his buddy in HR telling him that he needed to meet him for coffee at an offsite location to discuss something of a very sensitive nature. I have no idea how much of that had or had not taken place but it was obvious that some had or a lot. My guess is that it stopped with a screeching halt and both of them had a lot of paranoid sleepless nights waiting for the secret results of the defalcation audit. I know that for the next month or so until I moved to another location my office mate was as jumpy as a cat on a hot tin roof and he and his buddy had lots of hushed conversations.

The last laugh I had over the deal was when the phone guy came to disconnect my phones and asked me in passing if the other guy in the office ever found out if anyone was bugging his phone line because the phone guy had checked and there was no indication of any device on his line. Ah what tangled webs we weave when we deceive a deceiver.

Telling the boss is an option but without proof that can get pretty sticky unto itself. An anonymous letter to the owner of the agency might be an option. I would want to know if one of my group were involved in that sort of criminal activity and they would be gone. Course then I would be faced with calling the company myself to let them know what had gone on and who was involved.

Sometimes the hardest things happen when we become aware of things that we really wish we didn’t know.

Amy Says:

Wow. Just wow. This is wrong on so many levels, but one of the first questions I have to ask is where in the world is the boss in this?!? What Recruiting Manager would allow this to happen? Here’s what I mean – before my company allows a position to go to an agency we have already turned over all our rocks and decided to put it out for TPR. That means we STOP SOURCING. Why compete with our own resources? It’s just silly. So that needs to be the first conversation. Are we filling reqs ourselves or are we hiring a firm to help? And if we’re putting it out to an agency and they’re doing all (or even most) of the fills, why do we keep Fraud Boy around?

My guess is (besides the kickbacks) that it’s “easier” to place agency candidates. After all, some TPR is doing all the hard work. Screening for fit, probe, close, counter offer prep, all the work that goes into just getting someone ready for the interview. When the interview doesn’t go well, or an offer isn’t accepted, it’s the agency’s fault, right?

But this doesn’t really answer your question, does it?

So who owns these candidates being rejected over agency candidates? Maybe that’s your opening. If anyone YOU have sourced is being rejected, it’s time to talk. Have a conversation with your boss AND Fraud Boy, and ask what exactly this (agency) hire has that your internally sourced candidates do not. Sunlight is the best disinfectant, no?

Another option is to follow up on a specific candidate. Let’s say this candidate, who was rejected in favor of an agency recruit, followed up with you asking why they aren’t being considered. Again, in a meeting with everyone, ask why? After all, it’s only fair to give honest feedback to the candidate. Besides the fact that you are clearly misunderstanding something about what makes a “fit”, and you’re hoping that your esteemed colleagues (Fraud Boy?) can shed some light on to what you’re missing.

I am all about transparency, and I would be the first person in a staffing meeting to ask why these candidates are being rejected in favor of agency recruits. Damn the consequences, I’d call BS when I see it.

Although Sandra’s idea sounds a lot more fun.

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Replies to This Discussion

Permalink Reply by Amy Ala Miller on September 19, 2011 at 8:06pm

Bill, if I didn't know better I'd think you were trying to bribe some swag out of me... :) Still got your care package ready to go. You wouldn't believe the marketing trade show crap we got.

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Permalink Reply by Sandra McCartt on September 19, 2011 at 10:47pm

Ha, Amy is paying off a recruiter with trade show crap. I don't think that is fraud, i think that is God taking out the trash. Way to go Amy. :) Now when you go to the next trade show Schultz will be giving away swag with your logo and telling folks it's from his fav. client.

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Permalink Reply by Sandra McCartt on September 20, 2011 at 1:35pm

Looks like everybody is afraid to touch the "sticky stuff". Is this one that we all know about and don't want to acknowledge. :) What would you do if you as a recruiter found out one of your hiring managers was being wined and dined a bit too much by an outside recruiter? Ewwwww that's a sticky one along the same line.

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Permalink Reply by Tim Spagnola on September 20, 2011 at 6:52pm

Now I have heard of unethical practices in recruiting, but am I that naive to have never considered the possibility of kickbacks? The concept really never crept into my head, but you both illustrate some fine examples of how it can play a role. I'm not sure exactly how I would handle this situation if I were in these shoes, but think it would fall in line w/. Amy's suggestion of calling it out. Yet- when you factor in the relationship that I may have with the individual in question, and the impact it could have on my desk (future splits/referrals)- it certainly does make this one sticky situation. What would complicate things a bit further if it was brought to the attention of your boss and he/she had no problem with it. Perhaps even something that is a 'hush hush' practice to those more senior/established in the firm. Kickbacks huh? Learn something everyday.

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Permalink Reply by Sandra McCartt on September 20, 2011 at 7:11pm

Oh yes, happens on a daily basis. I once walked in the bank, saw a Sr. level HR type standing in line to cash a check. Walked up behind him to say hello and saw a check made out to him for over 15K from a local recruiter. When i said hello i thought he was going to strangle. But he knew, and he knew that i knew. He was not in his position long so i assumed that either he got very scared that i would blow the whistle or his company found out and he got a bus ticket out of town.

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Permalink Reply by Amber on September 20, 2011 at 7:33pm

@Tim- maybe it's naive, but better that then being one who perpetrates this. I never even thought of approaching any of my client's internal people with this type of proposition.

The employee in the scenario is in a pretty tough spot, I would talk to the boss not the agency. Of course you have to hope that the boss isn't turning a blind eye and/or participating.

This sort of practice is hard to manage if the company allows ANY sort of "gifts". Many corporations have a blanket policy of no gifts of any kind. No tickets, no cookies, no trips with vendors, etc. It sounds ridiculous, but I have had a hiring manager send me an email thanking me for the planner I sent him, but as his company policy did not allow gifts would I please refrain from sending him anything else - and he also said he gave the planner to a local organization. So even though a policy like that would not necessarily prevent the situation, it makes it a lot easier to see when it's happening.

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Permalink Reply by Sandra McCartt on September 20, 2011 at 10:42pm

The no gift policy is a formality that a lot of companies have. A lot of my clients have a nothing over 50 dollars. One has a policy like your client Amber. It is so strict that if i go to lunch with one of the department heads at my invitation they have to buy lunch with a company credit card if they have any social interaction with any vendor. One year i had been to lunch with so many of them so many times that i decided to send hams for Christmas to all the department heads. Oh my God. I didn't send one to HR because i didn't work with HR. When the HR manager saw the hams being delivered she had a cat fit. I had sent one to the president of the company with a note that said , "Merry Christmas and Thank you for your business and all the lunches.

HR went nutso, sent memos to everyone that they could not accept gifts from any vendor. One of the VP's sent me a thank you and let me know that they could not accept gifts. I suggested that they give them to their church or any of their associates who might be having a difficult time. The Pres went to HR to see what the big flap was all about and discovered a big basket of cookies from the temp firm they use sitting on the HR Managers desk. When he asked what the difference was between cookies and ham the HR manager told him the cookies were for everybody.

Mr Pres thought it was kind of ironically funny so he told HR that he was giving his to the VP of Finance since he had several kids , the VP of Finance said he was giving his to the VP of IS because he had all his inlaws for the holidays and on and on it went. They all gave theirs away and everybody got one. I have not however sent any more Christmas hams.

But this is not about the little thank you gifts or the bottle of wine or flowers on a birthday. This is the crooked stuff where a lot of money changes hands behind the scenes and nothing prevents it if you have two willing players. A lot of recruiters have been "enticed" by internal hiring managers who want a piece of the action. It starts out with a joking remark about "Wow, i have made you a lot of money this month, you owe me a steak and drinks or a bottle of scotch, ha, ha, ha." An oportunistic recruiter gets the picture and the boys go out for drinks a few times. And it builds from there until somebody like our anonymous person here finds out about it. That is when it gets really sticky.

If this happens to you just laugh and say "Wow, i really do appreciate your vote of confidence in my ability, i will drop your boss a note letting him know what a great job you are doing interviewing and selling my candidates on the company". "Even the ones you don't hire come away very complimentary of you and the company."

For our internal person here it might be the best course of action to leave an anonymous letter on the boss's desk since one never really knows who all the players are in a scam and a higher up exec. might be copied so it will roll down hill.

Before everybody starts thinking that any recruiter who makes a lot of placements with one company or one hiring manager is paying off somebody. There are a lot of situations where a hiring manager has a long standing relationship with a TPR who knows what he wants and can find it time after time. Be sure you are sure about "fraudboy" before making any overt suggestions because that can really get big time icky sticky.

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Permalink Reply by Barbara Goldman on September 21, 2011 at 9:41am

This happens. And, when it does nobody usually notices. HR has a preferred vendor, and it's easier. I wouldn't assume that there are kickbacks unless the evidence was very clear. Last year, I felt that something very wrong in an HR department. Since I had a long standing relationship with the COO of the company, I mentioned it to him, and the person was terminated. This is very rare.

Good recruiters don't have to pay for business. I used to send cookies, wine, etc. Since we are in a world full of people who may find offense to those things, I now send nothing. Hasn't affected business at all. Nobody can be bought for cookies.

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Permalink Reply by Jerry Albright on September 21, 2011 at 10:46am

In 1993 I finally made an appointment with the VP of HR (or similar title - I can't quite recall. He was at the top of the list there....) at a company who is now a household name. They are a very big, global company.

At the time they were in growth mode and needed quite a few contractors. We were dying to get in there and finally had a chance. It was all up to me - and my meeting with Mr. Big.

I recall sitting in his own personal waiting room outside his office. It didn't quite seem like a business/office type place. This was more along the lines of some rich guy's hangout. I don't think my description here is doing it justice. Let me just say I could tell something was different here, but couldn't put my finger on it.

Finally the receptionist let me know to "go on in". I did. I will never forget the meeting as long as I live.

Walking into the room I was greeted by a guy who looked more like the classical "pimp" than a business person. It set me back for a minute but I hung in there.

He asked me who I was and why I was there. I let him know I wanted to be considered as a vendor for his IT staffing needs.

He said something like this:

"Picture a big backyard party. The place is packed! Great music. Great food. Beautiful people everywhere you look. Everyone having a blast." He then asked me if I was following him or something like that. I said I was.

He continued. "The driveway is full of expensive cars. There are cars lined up down the block. The whole neighborhood is packed with people waiting for a spot to open up at my party. EVERYONE wants to get in."

"Sounds great" I said. (Trying to stick with the train of thought here but finding it quite odd....)

"Guess what Jerry? You're not even in the neighborhood yet. The only people that get in have something for the grill. Do you have anything for the grill Jerry? Why don't you go back to your office and see what you might be able to bring to my party."

And that was it. As I recall - he didn't say a word after that. I think I probably said thanks and took off.

I never called him back.

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Permalink Reply by Sandra McCartt on September 21, 2011 at 2:00pm

That is a great story Jerry. I saw more of that back in the late 80's and early 90's when money was flowing, oil was booming etc. etc. We had an agency that sprang up here started by three young ladies who liked to party. They quickly became known as the "Triple Triangle Hog Ranch".

Their deal was to take HR and internal recruiters and hiring managers to lunch, have a three or four martini lunch or 10 then waltz off to the closest motel about 3:30. They made a lot of placements until two of the wives of some guys at one of the oil companies figured out the deal, followed a couple of them one fine afternoon. Beat down a motel room door and took a lot of pictures. There were a couple of divorces, some firings and a lot of nervous folks doing a lot of talking. It made the papers due to the motel filing charges for destruction of property against the ex wives group.

The Triple Triangle was no more. I did hear however that the "ladies" had been able to find jobs at a car dealership and were doing fairly well in sales of Dodge Ram Pickups.

A lot of that stuff goes on too, sometimes it's services instead of money.