Should you sign on with a career-placement service that says it can introduce you, for a four-figure fee or more, to top executives and help you find unadvertised jobs? Job seekers who post their resumes on the Internet often receive such tantalizing offers by e-mail. Most ignore these unsolicited sales pitches. Others wish they had.
Christopher McKee, a chief operating officer from Orange County, Calif., received an e-mail in January 2002, which read, "I am contacting you from Careers 2000 in Woodland Hills, CA." The e-mail went on to say, "We are an executive placement firm," and referred to a resume Mr. McKee had posted online. He wasn't unemployed, but was exploring a career change, so he followed up. "I thought it was a headhunter," he says.
Mr. McKee met with the firm's executives, who indicated that they worked with a select group of clients and would have to determine whether he met their standards. The $5,400 fee, he was told, would probably be refunded by the employer. If not, the firm would help to negotiate a salary differential that would compensate for the fee.
When Mr. McKee requested references, he was told that clients' names couldn't be divulged because of confidentiality. He signed on anyway. "They have a good marketing pitch, and, if what they said was true, it would be a good service," he says.
A brochure distributed this past spring by Careers 2000, which now called itself Careers 20/20, promised "access to unlisted and unadvertised opportunities," "personal relationships with most of the top executive recruiters in the country," "personal relationships with board members, CEOs, presidents, and other decision makers," and "direct mail to venture capitalists -- many of whom we know personally." Careers 20/20 also offered to mail letters of introduction to these superstars; the brochure included a sample letter signed by then-president Charles Dimon.
But all Mr. McKee received was a generic marketing plan. The promised mailings were never sent. When he used the firm's letter of introduction to send over 50 letters of his own, "all I got back was one e-mail saying they didn't accept unsolicited resumes," he says.
What They Promise
Careers 20/20 is among firms preying on vulnerable job seekers, calling themselves career-management, career-marketing, executive-marketing or retail-outplacement firms. They offer resume preparation and mailing, counseling in interviewing and negotiation skills and access to employment databases. They often promise much more -- specifically, access to jobs unknown to the public. Unlike traditional career counselors who charge hourly fees, they typically require payment in advance of $2,000 to more than $30,000.
Career-marketing scams have been around for at least the past two decades. Their operators have been the subject of legal action by different states over the years. The latest is in Kansas, against a franchisee of Bernard Haldane Associates, a career-marketing firm based in New York, N.Y., which has nearly 100 franchised offices world-wide.
"There are some problems out there. Kansas is not the only state that has gone after Bernard Haldane," says Mark Ohlemeier, public information officer at the Kansas State Attorney General's Office. "There are a lot of people out there looking for jobs, and it's just unfortunate when these services take advantage of their clients, especially in their time of need."
Holly Cherico, vice president of communications of the Council of Better Business Bureaus in Arlington, Va., reports an increase in the number of online complaints about career marketers as well as other categories of employment services. "The number of complaints will undoubtedly rise now that the economy is bad and there are more layoffs," she says. "You need to be clear whether you're dealing with an advisory service or a counseling firm or a job-listing service. People who have never been laid off before and have to look for a job for the first time think that career-counseling firms will get them a job. But what are they really promising? To help you with your resume and interviews."
'An Inside Track to Hiring Managers'
Charles Prooth, an information-technology executive from San Mateo, Calif., was contacted by a Careers 20/20 employee in March 2002. "He said he'd seen my resume on the Net and thought his company could find me a job quickly," Mr. Prooth says. "He said the company had an inside track to hiring managers, [human-resources] executives and other satisfied clients who shared job leads in the hidden market with them."
Mr. Prooth paid $4,500 to sign up. He noticed the job listings he received in the mail were undated photocopies. Then he recognized them as reprints of bulletins circulated to members of ExecuNet, a networking-membership group in Norwalk, Conn., which he also had joined. ExecuNet members -- employed and unemployed executives -- share job leads with each other, which are distributed in the bulletins.
When Mr. Prooth complained about this to Careers 20/20, its client-services director volunteered to research 10 companies of his choice for him. The information he received was from a corporate directory that listed executives who were no longer with those companies and business addresses that no longer existed.
Name Changes
As with Careers 20/20, the names of these companies can change in midstream, or they close and reopen elsewhere under new names. Careers 2000 was incorporated in 2000; Careers 20/20 in 2002. In August, the company announced that its assets were being acquired by Geneva/Cross Ltd., a limited-liability corporation registered July 1 in California. The new Geneva/Cross Web site displays testimonials identical to those on the Careers 20/20 site.
Mr. Dimon, Careers 2000 and 20/20's president, had been expected to consult for Geneva/Cross during the transition, but Greg Cynaumon, a former Careers 20/20 consultant who's now president of Geneva/Cross, says all ties have been severed. Dr. Cynaumon says the company will guarantee to refund clients' retainers if they don't get new jobs within six months or if their new employer doesn't repay the fee. "The career industry has a poor reputation," he says, "and I have instituted this policy in an effort to help our firm rise above the industry."
Before he started Careers 2000, Mr. Dimon was associated with Icon Management Group, a now-defunct career-marketing firm that was based in Irvine, Calif. Before that, he was with yet another defunct career marketer, Cambridge Career Transition Group, also in Irvine, which he operated with a partner.
Attorney Eugene Matthews, of E. Wellington Matthews & Associates in Los Angeles, is expected to file a lawsuit this month in Los Angeles Superior Court on behalf of a group of plaintiffs against Charles Dimon entities and executives, including Dr. Cynaumon. Mr. Matthews is representing former clients of Mr. Dimon who have contacted his firm in a "joinder of parties" lawsuit. Claiming fraud, intentional misrepresentation, unfair business practices and breach of contract, the plaintiffs are seeking to be repaid their original investments, punitive damages, attorneys' fees and general damages. They are suing Careers 2000, Careers 20/20, Geneva/Cross and the officers of the firms individually.
Careers 20/20's corporate status will not affect the lawsuit, Mr. Matthews says. He's doubtful about Geneva/Cross's money-back guarantee. If clients fail to follow specific procedures, disreputable career-marketing firms are known to say, " 'You didn't adhere to the criteria, so we're not giving you back your money,' " he explains.
Sayyed Bashir, a manufacturing executive in Laguna Niguel, Calif., who won a judgment of $2,400 for breach of contract against Icon Management Group, but has been unable to collect, is doubtful Geneva/Cross will change its spots. "It seems like they just want to move Mr. Dimon into the shadows," he says. "They can't avoid their liabilities just by changing the name of their company."
Complaints and Agreements
In September, the Kansas Haldane franchisee, Reed Freeman Management Group Inc., which operates two franchises in the state, agreed to refund $300,000 to clients who complained to that state's Attorney General's office, though it didn't admit to wrongdoing.
Haldane and the franchisees agreed to not represent that they could bypass the personnel departments of employers when they could not and that they had access to the "hidden job market," which they did not. They also agreed to desist from running solicitations disguised as job openings in newspapers, calling prospects whose resumes they found on the Internet for a "job interview," which was in fact a sales representation, and charging for services that weren't provided.
This agreement followed another in Kansas in 1999 in which Haldane entities agreed to not make false representations. Charges included representing that Haldane could connect job hunters with company decision makers when, in reality, it didn't have access to them and that Haldane research was exclusive and proprietary, when it wasn't. Haldane also falsely claimed it would do mass mailings, find jobs for clients within 45 to 90 days and negotiate refunds of its fees with employers. The Attorney General's office also required the entities not to place dummy classified ads, which make them appear to be headhunters or employers, to find prospects.
'Extraordinarily Adept Salespeople'
David B. Opton, founder and CEO of ExecuNet, says it's easy to understand why job seekers are susceptible to the companies' pitches. "Firms like these draw people by posting a job that sounds like a super-terrific opening, and wait for the resumes to arrive," he explains.
Likely candidates are told the job has been filled, but the company is very impressed and wants to talk with them. "They are extraordinarily adept salespeople and big strong closers," says Mr. Opton. "The tougher [the job market] gets, the better off they are because more people are desperate. They take advantage of the fact that people feel uncomfortable trying to expand their personal and professional networks."
McKenzie/Scott Partners, a career-consulting firm in Denver, provides its clients with access to a network of online databanks. Richard Siska, a Chicago sales vice president who was a McKenzie/Scott client in 1999 and 2000, says he was happy with the services he received. He admits that its information comes from published sources such as Dun & Bradstreet and Hoover's directories, newspapers and Web sites and may be out of date. "I could go to a company's home page myself," says Mr. Siska, "but it's easier to use their system. It's a matter of time. A job search, in my opinion, should consist of talking to people rather than researching."
Mr. Siska says that McKenzie/Scott never promised him access to jobs or unpublished information, and that he appreciated his relationship with his McKenzie/Scott mentor, whom he often called daily to get feedback on new opportunities. "When I got a call from a recruiter or a company," he says, "I'd put it on voice mail and call [McKenzie/Scott's office in Denver] to get information about that recruiter or company. They'd fax articles, press releases, anything else timely. It was public information, but I got it within an hour." Mr. Siska's mentor also helped him in role-playing to prepare for interviews.
Reading Trade Journals
Not all McKenzie/Scott clients have been so pleased. "While they deliver enough to be safe on the legal front, the quality, timing and follow-through are pitiful," says a New York marketing executive, who asked not to be identified. The executive signed up early in 2002 after receiving a sales pitch.
"I was totally underwhelmed by the resume and bio they did for me," the executive says. "They sent me lists of jobs with World Trade Center addresses and contacts that weren't at the companies anymore. They said they'd deliver the hidden job market, but what they did was tell me to read trade journals. I know they did some mailings because I got a letter from California thanking me for sending my resume, when I'd specified the New York area. I couldn't reach anyone by e-mail, and when I called, the voice mailboxes were often full."
McKenzie/Scott vice president of client services Robert Hughes says that the company prides itself on full disclosure. "With our client handbook, disclosure book, Web site, and Q&A, the chances of a client misunderstanding what we do is very low. We use third-party databases. They're 15% out of date because we get them from the leading database providers. Find us better databases, and we'll use them."
The disclosure book that McKenzie/Scott requires candidates to read doesn't include pricing information. Fees are often in the five figures. One client was offered a base package that started at $15,000, with add-ons for various services that could double that amount.
Sliding-Scale Fees
While Bernard Haldane has no published price list, Liz Vogel, Haldane vice president of public relations and marketing, says fees are "determined on an individual basis, based on the amount of time we expect to put in." Fees are typically 5% to 10% of the candidate's salary. The rationale, Ms. Vogel explains, is that there are fewer $200,000 jobs than $50,000 jobs; therefore Haldane will put more time and energy into working with the higher-paid candidate. The fee is paid up-front, but Haldane services are available to clients for three years, she points out. "The ultimate cost is lower," she says.
Haldane is conscious of the industry's tarnished reputation and is responding to concerns, Ms. Vogel adds. It has launched a client-care hotline (888-551-3051) and an online client-care center. "We're printing new materials so clients understand that if they have a complaint or concern, they can go straight to corporate. If there's a breakdown in the process, whether it's in our client's expectation or in our delivery, we want to make it right," she says.
A "client-friendly contract," explaining what clients should and shouldn't expect, is in the approval process. In the "shouldn't expect" category, according to Ms. Vogel, are "specific interviews, a job within a certain timeframe, or any promise of compensation in exchange for signing up. We're making it clear that they're not hiring us to give them leads and contacts." Haldane distributes testimonials, but doesn't extend to providing prospects with contact information on satisfied clients. "It's awkward to ask clients to put their names out there," Ms. Vogel explains.
Help with a Relocation
Charles Nusbaum, who had 15 years of sales and management experience and had run his own company in Virginia, contacted Denver-based Global Career Management (GCM) when he moved to that city. A representative assured him that GCM would find him a six-figure job, that he would recoup his $6,000 investment because GCM's negotiations training would help him get a higher salary, and that he would be given access to proprietary databases that "would uncover the 'unpublished job market.' "
Each week he received a one-hour meeting with a consultant and a mailing listing up to 10 companies. "They have consistently been companies in which I have no interest, that are often not practicing business in Colorado, that would lead to $10-an-hour retail jobs, that were not hiring at all, or that were even cutting jobs," Mr. Nusbaum says. When he complained, he was told to send the letters anyway because "it's important to get in front of as many people as possible."
GCM CEO Mark Renn says that his firm doesn't provide job leads. "We promise to work with clients until they get the position they want," he says. "We, as a team, figure out the right companies to network with." GCM uses commercial company databases, and "a 30-40% error factor is typical of any database. Our research staff works with these databases, and typically we cut the error factor to 10%," he says.
Seeking a Refund
Mark Peterson of Radnor, Pa., signed with Merrill-Adams Associates of Parsippany, N.J., for $10,800 in July 2000 in hopes of assistance in landing a CFO job. The firm promised to mail his resume to decision-makers but didn't follow through. After he protested, he was sent a few job listings from an interim executive-placement service that he'd already applied to. No one called him, he claims, and he had a hard time reaching the company by phone. When he managed to make contact, he says, "The counselor told me for the third time about a fellow who hired two college students to slide his resume under the door of each hotel room at a convention." The counselor urged him to attend industry conferences; when he brought up the cost, he was advised to crash the conferences during coffee breaks and pass his resume around.
After 18 months of frustration, he secured an agreement to be repaid half of his initial investment. Then Merrill-Adams closed, citing the death of owner Grant Shannon. Mr. Peterson has received only a few payments. The firm's former president, Charles Timmins, says the firm experienced a dissatisfaction rate of less than 5% over three and a half years. He's now with Personal Marketing Associates, a career-marketing firm in King of Prussia, Pa.
