Scams: Front Running
What is front running and what you can do to beat it
In an earlier article, The Resume, we discussed scams where candidates misrepresent their qualifications or fabricate them of whole cloth. In this article, we expose a scam perpetrated by agents purporting to represent either hiring companies or candidates or both. We call this front running since it is analogous to front running in securities trading.¹
In this scheme, a “man-in-the-middle” represents themselves as different things to candidates and companies. The grift might begin with a company job posting. The front runner reviews the job description and then looks on job boards for resumes of job seekers who appear to meet the job criteria. The grifter might harvest bullet points and descriptions of experience to fabricate an ideal resume to present to the company. Without a job seeker’s permission, the front runner approaches the company with the candidate’s resume or perhaps with the fabricated one.
Not necessarily knowing of the company’s interest, the front runner simultaneously contacts the candidate job seeker purporting to have an exclusive job opportunity. They will sometimes claim they are the only agency the company works with. The front runner attempts to get the candidate to agree to be represented by it.
It then turns around to claim to the hiring company that it is the representative of the candidate. Even without an agreement, the front runner can proceed as if it has one with the candidate. It is a industry standard courtesy that the first agent to present a candidate is given exclusive rights to that candidate by the company for a period of time. Thus, the front runner has insinuated themselves between job seekers and the company by making things up to both parties!
Front Running in Action
One front runner contacted us with a good candidate for an open position in Network Engineering, claiming that they represented the candidate. They even attempted to negotiate a salary, which we declined to do before evaluating the candidate. When we eventually met the candidate, he expressed surprise that the front runner had contacted us about him. He said he had never agreed to be represented by the front runner and stated his resume had been used without his permission. In the end, we ignored the front runner, worked directly with the Network Engineer candidate, and hired him! Found out in this way, the front runner disappeared.
In another case, we were contacted by a different agent purporting to represent a candidate. The agent quoted an hourly rate for the candidate. After we evaluated the candidate, we decided to hire. However, we suddenly learned the earlier quoted rate was not to be honored; it had increased 15%! Ours is a trust-based business and we expect that people will stand by their commitments unless extenuating circumstances intervene. When something as basic as the rate changes by that much, it’s a cause for concern. With regret, we informed the candidate and the agent that we could not proceed. We would rather walk away from a deal than work with people we can’t trust to keep their word. That seemed to be the end of things.
A week or so later, the candidate reached out to us wondering what went wrong. We explained that the quoted rate had changed dramatically and both the economics and trust had been compromised. The candidate was surprised; he hadn’t heard of this problem. He reported that earlier the agent had quote him a high rate. This high rate was greater than what we were offered; in other words, the agent would have to pay the candidate more than he would get from us! We both immediately saw that to get our attention and win a commitment, the front runner had made exorbitant promises to both parties, as a hook. The front runner then hoped to renegotiate with us so that they could eke out a margin. That was when the deal fell apart.
So, the front runner assumes two identities:
- Agent representing the hiring company (sometimes with claims of exclusivity).
- Agent representing the candidate.
But, in fact, the front runner represents neither party and has no prior business relationship with either. They engage candidate and company and learn enough about both so as to present themselves as representing one to the other. For example, they recited the candidate’s work history, current status, etc.; and they told the candidate that they represented us, describing the job opportunity and so on.
Deterring the Front Runner
What can be done to counteract this scam? We always validate that the agent has the right to represent the candidate. Similarly, we only work for companies that have retained us in some capacity to help them find talent. Companies should be very careful about receiving unsolicited candidates or proposals from agencies and avoid it most of the time. For one thing, these candidates might be fictional. If a company wants to work with an agency that has worthwhile candidates, it should take the time and effort to negotiate an MSA to cover normal business contingencies.
Still, front runners can be persistent and cagey. They can threaten (usually) unspecified action if you cut them out. They can be a nuisance. They can add complexity and cost to hiring. They can muddy the waters. They can poison a potential deal, since their dissembling sows mistrust and confusion among all parties.
The motivation for front running is easy to understand. To be fair, front runners are potentially providing an important service, by “making a market” or acting as a “matchmaker”. In securities trading, front running is only illegal when the broker uses insider information. In recruiting, there should be no opprobrium for agents who, without subterfuge, match candidates with jobs. The front runner could negotiate a “finder’s fee” with the company or “placement fee” with the job seeker. For high-level retained searches (e.g., executives or special technologists), a transparent fee structure is common, with some of it paid by the company whether successful or not. However, at lower levels in an organization, the reality is that few companies or job seekers are inclined to agree to fees in advance.
The iniquity of front runners is when they lack standing with either job seeker or company and still attempt to make a match by misrepresentation or outright lies.
Nevertheless, once front runners are detected and deterred, more skullduggery awaits the chastised hiring manager: candidate impersonation!
Footnotes
- Front running in securities trading occurs when a trusted agent, acting on insider information, purchases shares just before a known, often large trade, and thus profits from a run-up in price. Sometimes this is done programmatically in an exchange where any pending trade can be “front run” so that a buyer’s purchases are filtered through an intermediary that arbitrages knowledge of an impending purchase, costing the original buyer more.
Marie Christine Umali and Roxanne Bornilla contributed to this article with research and other information.
Mark Looi, marklooi (at) looiconsulting.com, is President of Looi Consulting, a provider of technical consulting services. One of the firm’s capabilities is rapidly building technology teams to accelerate client software development projects.
