To provide some context, LinkedIn has a specific setting called, Let recruiters know you’re open to opportunities. This setting works as the name implies - LinkedIn users who are tagged as Recruiters will know if you've set it to "Yes." Other users won't see the way you have set this flag, either way. Setting this flag to "yes" also lets recruiters see the job search preferences you've configured, if any - target employers and industries, and so on. This setting is sometimes referred to as the actively looking flag. It is meant to imply an active candidate, not a passive "yeah I'd think about it if the right job fell in my lap"" candidate - notably, LinkedIn only allows you to set this flag to yes for 6 months at a time, after which they flip it back to "no" for you (if you're still looking, you can go in yourself and flip it back to yes after that, for another 6 months).
In addition, and more relevant to your question, LinkedIn hides the setting of this flag from recruiters who work for your current employer. From their website,
In order to protect your privacy, we take steps to keep Recruiter users who work at your company, as well as related companies, from seeing the career interests that you share
This functionality has the obvious benefit of preventing your current HR department from learning that you're looking for another job. Your specific question was,
Has anyone set their LinkedIn settings to "actively looking" while still at a current job, and have you ever had problems with your current employer finding out you are looking?
So, while the other two current answers do provide good advice, they don't specifically address this "actively looking" flag. I can tell you a few things, from my personal experience and from working with other people who have found jobs via LinkedIn:
- The flag does what they claim. Users marked as Recruiters and who are employed with your company, or have an official relationship to your company that's represented on LinkedIn, can't see that you've flipped it to Yes.
- Other recruiters, including independent 3rd parties, can see that it's set to Yes. This is desired, of course, but it's also a potential loophole. If a Recruiter user who's not employed at your company sees it, there's nothing that directly prevents them from telling someone at your employer. Except, of course, that it would be very bad practice to do so (why would a recruiter want to do something that would be potentially harmful for a potential candidate?)
In the cases I'm aware of, no one has ever had their current role, or their career search, harmed by setting this flag to yes. Of course, this is anecdotal (although it seems like that's what you were looking for). In the end, if you're actively looking and applying for jobs, recruiters at other employers are going to know you're looking - the flag just takes that fact and broadcasts it to a larger audience, it's not inherently introducing new information. The good news is, recruiters are used to the fact that candidates who are currently employed are typically not going to want their current employer to know that, so behaviors that are already in place in the recruiting community generally support respect for the way a user configures this flag on LinkedIn.