Many people overestimate the need for confidentiality, but ultimately this decision should be made only by the job seeker. The problem with maintaining absolute confidentiality is that it tends to make your job search efforts less productive.
Mindset
It is important to keep in mind that, no matter how many steps you may take to keep your activities confidential, there is always the chance that they may be communicated to your employer. Ultimately, the only way to ensure 100% confidentiality is to do nothing, and that defeats your purpose. Nevertheless, be aware that it is possible to run an active job search and take several steps to minimize the possibility of your employer learning about your activities.
Resume
You can have your resume stamped "Confidential." Or you can have a prominent statement that says, "Effective care to protect the confidentiality of this communication is essential. Thank you."
In some extreme cases, people have not put their names on the resume itself, but only on correspondence that goes with it, and that correspondence emphasizes the need for strict confidentiality. Often the name of the current employer is not used, and a generic definition of the company is used instead.
Interviews / e-mail / Letters
Some job seekers needing to maintain confidentiality use the third-party approach in contacting potential employers, and in some cases even recruiters. A friend or associate writes a letter without mentioning the job seeker's name, describing the job seeker's background, achievements, and interest in the targeted company, asking that any replies be directed to them as an intermediary. The letter does not give details that would identify the job seeker.
Another approach is to state in letters, e-mails and phone discussions that your communication and activity is strictly confidential, and that your job would be in jeopardy were your employer to find out you are actively looking.
In general, you will need to avoid answering "blind" ads that do not identify the employer, or you will need to use the third-party approach when responding to them.
During the interview, reinforce the fact that your meeting must remain in strict confidence. Make clear the consequences, that you would either be embarrassed or lose your job if your activity were known.
Actions
Prepare yourself in the event that your employer finds out about your efforts and you are confronted about it. You might prepare a response along these lines: "Oh yes, it has always been my policy to test the market every three years. For my sake and the company's, I want to be sure I'm in the best place, making the most of my talents. So far I've never found anything better than what I have right here, and that still seems to be the case today. Don't you think that's a sensible way to make sure you do the best by yourself and your employer?"
Many employers will not expect such a reply and be taken off guard. They may well agree that it is a sensible thing to do and forget the matter. For employers who take a more aggressive view, you may want to remind them of your legal rights. Today, managers are usually highly cautious about how they handle termination. If things get testy, seek out a Human Resources officer, who will usually try to calm down the situation.
If exploring new situations places you under severe risk of termination, you can prepare in another way. Get a large volume of communication ready to mail or e-mail and get it out into the market at one time. This may make it possible for you to arrange a number of interviews in a short period of time, increasing the possibility that you would quickly find another suitable position.
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