An “Off-Limits” policy is the stipulation that a search firm will not approach a company that it has worked for a set period after the last search.
Amongst executive search firms, off-limits policies do vary. Some firms will stick rigidly to a two year timeframe, others will limit this to a year, and some either don’t have an off-limits policy or if they do, don’t honour it.
Much like a lawyer or an accountant, search firms work on a retainer. They commit countless hours to thoroughly researching the market, approaching, interviewing and assessing the very best talent on behalf of their clients. So it seems completely illogical that a search firm would risk that relationship by poaching from the hand that feeds them.
And yet it happens!
We recently met with a contact from a major rail business who were looking to talk to new search firms because their incumbent supplier had unceremoniously pinched their Financial Director and placed them into a direct competitor.
Not surprisingly, the firm in question had burnt all future bridges with this client.
So what do you need to know about a search firm’s off-limits policy before working with them?
1. What is their policy?
Seems like an obvious point, but you would be surprised how little we are actually asked to clarify this when we start working with a client.
Companies share a lot of highly sensitive information with headhunters and as such shouldn’t have to worry about this information being used against them. You need to be confident that you can trust your search consultants with information regarding organisation structure, who is doing what within the business, salary information, sensitive contract/project details, strategic plans and an understanding of who the key people are.
If a consultant is upfront about their policies straight off the bat, and open to a straightforward conversation about their off-limits policy, then they are more likely to be a trustworthy business partner for the long-term.
2. Who is off-limits to them?
This is a crucial question to really drill down on.
When engaging a retained search firm, it’s easy to assume that, because of their size, they will have a greater reach in terms of uncovering talent. In reality, however, large firms who work for hundreds of different organisations will have a staggering amount of candidates that will consequently be off-limits to you.
Smaller, boutique agencies may actually be able to provide you with a far better service and range of candidates, so make sure you clarify who search firms can and can’t approach before signing the retainer.
3. When do search firms view it acceptable to recruit from a client?
An off-limits policy is an agreement not to actively solicit from their clients, not a promise that they will never ever recruit from them again.
In our opinion, there are only two instances when it is acceptable to engage with an employee of a company we have worked with; when the off-limits policy has expired or if an employee of a client directly approaches us saying that they are actively looking for a new role.
The first is pretty straight forward – we won’t include anyone from a client of ours on any of our longlists unless the off-limits period has expired.
The second, if a candidate of a client approaches us directly, is still an incredibly sensitive position to be in and we would carefully assess the situation on a case by case basis.
We have had candidates come to us for help to find them a new role from clients that we have been actively working with at the time, and unfortunately had to turn them down because we didn’t feel comfortable with it due to our close relationship and commitment to the client.
Executive search firms are there to make your life easier and find you the very best talent for your executive teams. The last thing you want as a client is to have that company take the valuable information you provide them with and start headhunting your employees. By thoroughly vetting a search firm’s off-limits policy before starting any work with them, you can ensure you not only trust that consultancy, but that they are also able to approach candidates in the right companies.
If you need to make any changes to your executive teams and have faced off-limits issues in the past click HERE to see how we can help.