The Recruiter Blacklist: A Company-Wide Process to Combat Recruiter Spam

Working at an early-staged startup is bananas. It’s terrifying and fun and exhausting. It’s a lot like riding a unicycle for the first time. Blindfolded.

At my previous startup, I was in charge of hiring. Every time I wrote a job post, I’d get external technology recruiters banging down the door.

I’d let a few through the gates (or door, if it bothers you that I mix metaphors), only to find out that most of the time, I was being charged 20-30% to hire Johnny CTO.

When I tried to negotiate the fee, I’d always get one of two responses: (1) “I’m sorry, but that’s my firm’s policy,” or (2) “Fine, but you have to realize that a higher percentage helps me motivate my team to hire for you.”

That sucked, but I understood. The model was broken, and there was nothing I could do about it.

But, what sucked even more was finding out that the same recruiter had, two weeks prior, emailed one of our team members about an “amazing new opportunity!”

Standing firm on price I get. But attempting to break up my team and then trying to play nice with me now that you knew we had a need. Well, that felt dirty.

So, I created a company-wide blacklist. If a recruiter attempted to poach you, their name went on the blacklist. That way, anytime a recruiter hit us up about one of our openings, I’d cross-reference the list to make sure they weren’t trying to play both sides.

If you’re a recruiter, here’s what I’d tell you: you can attempt to poach my teammates. But, be aware that your name (and firm) goes on the blacklist. What’s more important to you?

Now, back to learning how to ride that unicycle.

-- This post was written by Josh, one of the three co-founders of underdog.io. It was originally posted on the underdog.io blog. --

Comment by Steve Jenkins on May 30, 2014 at 6:43pm: Josh,

I get it, Many start ups can't/won't use recruiters. You can usually find a couple of buddies to join you. I rarely call on start ups. It's not that I don't love to hear the excitement in the founders voice.......

It's because if a start up is THAT exciting, we recruiters get the call from the VC's. They are not about to mess around with resume mills or ads; they need the ROI. So they lean on seasoned/proven recruiters to find candidates who can make it happen.

Comment by Tyson J. Spring on May 30, 2014 at 7:03pm: This is comical.

"If you’re a recruiter, here’s what I’d tell you: you can attempt to poach my teammates. But, be aware that your name (and firm) goes on the blacklist. What’s more important to you?"

Be aware. blacklist. poaching. What is this, the Hunger Games? Is the NSA involved?

Is underdog.io a sure-thing multi-million dollar account waiting to happen? Should we all line up and wait patiently for the deal, rather than approach your talent on behalf of our actual paying clients?

More likely, it's at best an account that might produce 3-5 placements over the next couple of years until your next round of funding happens and foos ball tables, nerf guns, and in-house grilled cheese sandwiches take up the recruiting budget that otherwise would have been spent on true-blue headhunters who know how to get talent.

Usually, by the way, the person writing the checks isn't the one opening and closing the gate. So which one is it, are you writing the checks or are you the gatekeeper...or...errr....doorman, which metaphor were we using again? Because, while we all appreciate the insight into the startup world from such an accomplished startuper as you, I sense some holes in the story.

If you're not writing the checks out of your own bank account, than your blacklist is just a fun little game that's going on between you and your devs, and your time would be better spent looking for talent, not managing blacklists and approaching a forum full of recruiters waiving it around in an attempted threat.

It's not likely to create any issues at all for a recruiter who's qualified and smart enough to skip right past the gate and let your founders, the ones who write the checks, know what kind of value they can bring to the table.

Comment by Keith Halperin on May 30, 2014 at 9:35pm: @ Josh: I've yet to see a justification for why it's OK for a recruiter to target my company up until the minute I open a negotiation with them, other than to say 'that's their job' or 'that's business as usual.' Do you have one?"

I have two:

1) $$

2) Because we CAN.

-kh

Comment by Nicholas Meyler on May 31, 2014 at 1:09am: Thank you, Josh for posting this. Great topic! Please allow me to disagree, however.

If you're not a client, then you're inventory. I've had major in-house recruiters call me up and scream at me for recruiting their people, and I just said: "Why wouldn't I? Do you want to pay me a retainer to stay out of your company?" Apparently, some of them just don't get it. The same recruiters turn around a few years later and tell me they need my help because I'm the best recruiter they know... Companies like Intel and Micron used to block my email, now they simply accept it as part of life.

The whole idea that a recruiter contacting one of your employees is highly deleterious to you and your company is quite false. People are smart enough (and free agents who make up their own mind and their own rules) to decide for themselves if they should talk to a recruiter. They don't need "Big Brother" looking down at them all day.

I would suggest the alternative: Allowing recruiters to contact employees is actually beneficial to the company, because it improves moral, allows employees to learn about life in other companies, and enables employees to refer potential candidates, too. Any employee who is freely given the choice to speak to a recruiter when he wants is much less likely to be frustrated and discontent about how he is being treated.

The largest fee I ever charged ($151,000 for one placement) was a Micron employee who got extremely disgusted by the way the company treated its employees and refused to let them talk to recruiters. He described a meeting they held one time, where employees who had been observed talking to recruiters were fired on the spot, in public, in front of over a thousand people. Talk about giving candidates an incentive to leave their company! Of course, their HR people screamed at me and told me to stop recruiting. I didn't, and that's why I snagged their $billion candidate and stole him away. A year later, they called me up and offered me a job at Micron...

The few companies that have scolded me for my 'intrusiveness' are actually looking for that quality in an outside recruiter. Getting on the 'blacklist' is the first step to doing a lot of business, in many cases. I wouldn't be too quick to condemn any recruiter, because they might respond by putting your company on their 'blacklist', as well, which can be a great deal more expensive and damaging than anything you can possibly do to a recruiter.

Comment by Josh Goldstein on June 2, 2014 at 11:15am: Going to try to respond to some of these. Few things:

1. Our blog post is specific to startup recruiting. We've only hired for startups - we don't have experience hiring for corporate America.

2. Please try to keep this civil.

@davidwells - It sounds like you provide a lot of value to your clients. But, I still have a problem with this paragraph:

"I can understand your point of view in fact in speaking with non-clients who are transitioning into being clients we have discussed how we would poach out of their company and we do not apologize for it. It's just part of the business."

From my point of view, saying that you do something one way because that's just 'part of the business' is not really a justification at all.

@robmcintosh - Good point. We've changed the language.

@sandramccartt - I'm not sure I totally understand your argument. Of course our employees come from other companies. But, we don't then ask those companies to pay us for our service. That's the key distinction.

I appreciate the rest of your comments.

@jeremyspring - One of the key reasons why candidates are signing up right now is because we promise that they will be contacted by company founders/hiring managers instead of recruiters. It's a good point, but I don't see us selling our product to recruiters anytime soon.

Still, out of all the comments, yours was one of my favorites. It seemed logical to me. Thanks!

@jeffaltman - No, that's not what I'm saying. You're free to attempt to poach my employees. Just don't expect me to pay you for your services in the future.

Comment by Pete Radloff on June 2, 2014 at 11:37am: @Josh - nice work on changing the wording. Something productive came from this.

I guess after seeing the site, I'm a bit confused. You don't get paid by the startups who call the candidates you connect them with. How DO you make $$?

Comment by David Wells on June 2, 2014 at 11:44am: @davidwells - It sounds like you provide a lot of value to your clients. But, I still have a problem with this paragraph:

"I can understand your point of view in fact in speaking with non-clients who are transitioning into being clients we have discussed how we would poach out of their company and we do not apologize for it. It's just part of the business."

Josh my business is to develop business and recruit candidates. I never do the same out of both clients but until you become a client why wouldn't I target your people, provided they meet my requirements? If I did business your way then by extension I could not recruit out of anyone I am ever hoping to do business with in the future. That would limit my candidate pool quite a bit and limit my overall value. I think we just have to agree to disagree.

Comment by Josh Goldstein on June 2, 2014 at 11:49am: @pete thanks!

Haha, we're using a SaaS model. So, a startup pays a monthly fee, and it gets access to the candidate list.

It's our job to find awesome candidates. It's the company's job to reach out, interview, negotiate, and hire the candidate.

Comment by Pete Radloff on June 2, 2014 at 11:51am: So if a candidate registers with you and is currently an employee of a startup you work with, you won't help them? Because then you'd be purporting exactly what you are speaking out against here. Not being antagonistic, just trying to understand how you all work, having been a startup vet myself several times over.

Comment by Josh Goldstein on June 2, 2014 at 11:57am: Not exactly. We're not actively poaching people. Candidates must take the first step by submitting their information. We don't do any outbound recruiting. That make sense?

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