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The Fordyce Letter

Straight Talk for the Recruiting Profession


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Jeff On Call: How Will Incorporating My Business Protect My Assets?



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Q: How will incorporating my business protect my assets?

While the person claiming money or some other relief will undoubtedly name you personally, a corporation offers an additional layer of protection by virtue of its separate legal entity status under the law. Legally it is a separate person for liability purposes. Not necessarily the only person, though.

You’ll pay initial legal fees and recurring accounting fees. You must comply with certain state meeting and recordkeeping requirements. You’ll also pay additional corporate taxes.

Unlike a simple sole proprietorship or general partnership that merely requires a fictitious business name filing with the local county recorder’s office, corporations are more complicated.

However if you take your corporation seriously, a court will too.

This means:

  • Fully and completely finishing the entire incorporation process. Filing the articles of incorporation, preparing by-laws and first meeting minutes, issuing stock certificates, opening a separate bank account, and completing any federal, state, and local requirements.
  • Maintaining the books and records required by federal and state agencies.
  • Filing all official reports required by federal, state, and local agencies.
  • Filing all federal and state corporate and personal tax returns, being certain they are consistent.
  • Keeping corporate activities financially and operationally separate from personal activities.

Of course, consult with your attorney and accountant before incorporating.

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To participate in future Q&As, email jeff@placementlaw.com. Keep in mind you should always consult with your own attorney. Nothing contained herein should be construed as legal advice. It is for your information only.

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Fordyce TV: A Case Story Approach to Recruiting



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In any economy, candidates have to be enticed to take new jobs, and clients have to believe in the value of using a recruiter.

How do you get their attention long enough to make your pitch? Advertisers and movie-makers know that if you can draw in an audience with a compelling story, they will be more receptive to your message. What’s your recruiting story and how are you communicating it?

Join us on Tuesday, August 4 for the next episode of Fordyce TV — Lynn Hazan, recruiter and professional storyteller, will show how to use storytelling techniques to better communicate with candidates, clients, and new business propects. Hear examples of when stories made a difference in her recruiting practice, and begin to consider how to make effective use of your own recruiting stories.

The show starts promptly at 2pm ET on www.fordyceletter.com (right before the show you’ll see a small TV logo — click the white arrow in the box and enjoy the show — if you don’t see the box at 2, try refreshing the screen once or twice until you see it). There will be a live Q&A session via the chat box after the presentation, too, so come prepared with questions.

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How to Quickly Identify ‘Good’ Accounts, Part 1



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Out of the millions of companies we have available to prospect for new business, how does one quickly decipher through it all and identify “good accounts?” This is arguably one of the most challenging tasks in the staffing and recruiting industry. And we haven’t even started selling yet!

Good Accounts Defined

What is a good account? That depends on your business model and sales objective.

For example, are you selling MSP or VMS type programs or are you trying to get a contract in place to be one of many suppliers to a large managed program? Or is your model such that your goal is to establish one-on-one relationships with the end-using hiring managers? Based on those different objectives, I would define “good accounts” differently, based on each of those unique sales objectives.

But let’s assume (and I think this is the case for most staffing/recruiting professionals) that your objective is the latter.

Your goal is to establish one-on-one relationships with the actual hiring managers so that you can sell value and generate high-end gross profit margins. Your goal is to avoid HR and Procurement at all costs!

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Jeff On Call: Is a Corporation Right for My Business?



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Q: Is a corporation right for my business?

If you have multiple owners (other than spouses) or employees, there are distinct advantages.

These legal entities exist because a properly established and maintained corporation is a separate person under the law. Therefore (at least in theory) the corporate assets and liabilities are not those of the owners (shareholders).

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Replay of Neil Lebovits on Fordyce TV



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Here is the video replay of the first appearance (we hope the first of many!) by Neil Lebovits on Fordyce TV.

In his dynamic presentation, Neil discussed the “real” perm fee negotiation secrets you may have never thought about. He shared the concept, closes, analogies, and potential scripts that can go along with it. He also took time to answer viewer questions at the end of his presentation.

For those of you who missed the live presentation — or those who want to view it again — enjoy the show!

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I Blame Kevin Wheeler! A Cautionary Tale…



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kevin-wheeler-largeIn April 2008, I attended the Australasian Talent Conference in Sydney and was delighted to meet some amazing people, such as Dave Mendoza, Shally Steckerl, Stan Relihan, and the legendary Kevin Wheeler.

It was a wonderful few days, and I was swept away with enthusiasm to engage deeper into the intricacies of HR strategy and away from day-to-day operations.

In particular, Kevin’s presentation had a life-changing effect on me.

He spoke at some length about Thomas Malone’s “The Future of Work” and the idea of the “Slash Worker.” That is, workers who combine two careers, such as Clergyman/Motor Mechanic or Writer/Geologist.

This idea really resonated with me.

I’d already written one book and really enjoyed the experience. If I could have, I’d have gone into writing full time. The problem is that profits from the sales of my book have been fairly steadily about the cost of a good meal per week since I published.

Since it’s impractical to live on the streets, eating one good meal per week, and have broadband, I decided I needed to become a slash worker. Thanks, Kevin!

Within three months, I quit my job as Operations Manager for a new executive recruitment agency. Why, I hear you ask?

Having occupied a research manager role in a company headed by a local legend, he headhunted me after he sold out to a large multi-national and then decided to start up all over again. But after all the fun of the start-up phase, I more or less had my old job back, though I had a better title and two monitors. And it took up about 70 hours per week.

So I quit.

I had three approaches on the table, plus an opportunity to buy a tea and coffee retail shop/restaurant; all of which would provide me sufficient spare time to do my own thing. I figured I’d quit and then work it out from there.

I quit and made three appointments to discuss the approaches — just as the global financial markets blew up and hiring freezes were instituted.

Seeing it as fate, we bought the hospitality business, a local institution that was 77 years old and needed a bit of TLC.

The plan was that along with my wife/ business partner Anne, we would run the tea and coffee shop and a small boutique HR consultancy. We both know quite a bit about tea and coffee. Our son became our chef and continues to do an excellent job.

The figures and information I had suggested that I could put in about eight hours per day in the hospitality business, then go upstairs to the office we took in the same building and get cracking on writing a blockbuster and solving the world’s HR problems for enormous fees.

“Where’s the problem?” I hear you ask. “Haven’t you made a killing? What are you blaming Kevin for exactly?”

Of course, the figures and information were wrong, horribly wrong. I have ended up working over 80 hours most weeks on the hospitality business, attempting to break even. The HR business has been confined to stuff we can squeeze in after hours, whenever that is.

There’s been no marketing of our consultancy — we’ve just picked up a few jobs via word-of-mouth. And the next three books remain largely unwritten.

So we’ve taken the decision to sell the hospitality business at a loss and launch ourselves full-time into the HR consultancy.

So where are we? We’re poorer and in need of a holiday, that’s where!

But yet, there’s an amazing amount of positives.

First, we’ve met a colorful array of people who have become friends, potential colleagues, potential customers, and even characters in future books.

Anne and I have worked together all day, every day, for a very stressful year and are still talking to each other. We’ve proved we can cope with anything.

We now have a much more extensive grasp on how hospitality and retail works.

And finally, without the last year, we would not be launching the business we are now.

So, thank you, Kevin Wheeler. The spark you provided has led us to where we are now.

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Business Development: The Truth About Getting Those New Job Orders



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Recently, I had a conversation with a staffing agency president who was interested in buying some guru or others insight for business development.

He said, “But Rachel, I don’t want any insight, I want a quick and dirty tool that will help me find and get job orders.”

In another case, the managing director of a contingent staffing agency said, “I don’t have enough job orders, I need MORE, a lot more so we can pick and choose what we work on.”

How fast do you think they will be out of business?

Let me make this crystal-clear to you as a person who has led million-dollar lead generation efforts for technology projects/staffing firms and was responsible for search agency business development: There is NO quick and dirty tool to get business and the days of picking & choosing what to work on are OVER.

The staffing agencies that are doing well today are the ones that:

  • Have a specific niche focus and do very well in what they do. They don’t just specialize in IT or sales, generally they specialize in IT security, SAP professionals, or independent sales agents for insurance. They focus on recruiting professionals where there is demand, scarcity, or emerging needs (they understand the market) and they work with recruiters and sourcers who understand these positions and can find and fill the orders. They have relationships with clients and understand where the client needs are and work to fulfill them — whether directly or through splits.
  • Understand that business development is a process and takes work to achieve relationships. One staffing agency recruiter/account executive talked with me about how she called month after month to contacts, especially when they told her “not right now”. One of the people she contacted for six months gave her a job order that was pretty significant. He thought of her first. I had that happen as well, seven months of calling, emailing, and watching the company to see if an opportunity would come, and it did. It takes time, effort, and patience to build new business.
  • They wisely invest in tools and support that will enhance delivery and fill job orders (client loyalty) or have direct impacts on business development effort. Instead of spending a few thousand dollars on branding, take your unique value proposition and engage someone who will work with you to do lead generation. Real branding can take years to develop — IBM didn’t achieve its brand equity overnight. Many staffing agencies do not have websites, though a website can be designed and built for less than $3,000 and SEO applied.
  • They know too that there is no magic bullet or shortcut to getting new job orders. Some staffing agencies invested in sales training methods and techniques, only to find the system created more complexity and even negative effects rather than positive. The best system is to understand your core competencies, what makes you worth working with, and how you can bring value to a new client and then bring that message to prospective clients. Value does not translate to cost either. One staffing agency executive had a unique focus , she could find and network with resources that could bring direct bottom line impact to organizations seeking to expand sales efforts in particular demographic markets. I worked with her to develop a 30 second pitch encapsulating that value. This, by the way, is also an example of a staffing agency that positioned candidates as a “solution” to a business problem — something articulated in a recent Fordyce article.
  • They also know the days of “picking and choosing” are over. I don’t know of any industry where organizations source business and then pick and choose which contracts or projects they will work on. If a company gets a project it can’t fulfill, it usually will enagage another firm to assist or pass it to someone else. It is ok to say “NO, this is not something we specialize in. However, I can refer you to XYZ if you have a need in this area.” Companies only go after business that they know they can fulfill or meets certain guidelines. Staffing agencies need to gain a better hold on their core competencies and source job orders that they know they can fulfill. From conversing with corporate recruiters in charge of agencies, they only will work with companies that have a track record of fulfilling job orders — the rest they are scrapping.

The Client Perspective

From the client perspective, no one has time to manage multiple agencies and spend time ramping-up or working with firms that have no ability to fulfill what they need. Just as agencies don’t have time to spend talking with or dealing with unqualified candidates, firms have no desire to deal with unqualified firms. Firms that repeatedly fail to deliver or do poorly will be dropped permanently from the roster and, in this environment, a reputation for failing to deliver is not one that you want to earn.

Many “experts” will emerge who will advise you on what to do or how to get job orders, if they haven’t made a business development call or closed business — pass them by. Be sure to ask, when your material, advice, or insight was applied — how much new business did your clients secure, in what timeframe? The best way to spend your limited funds on business development is to find a resource who will work with you to develop the message, write your website copy, develop emails, and make those hundreds of calls to establish the relationship.

There are incremental resources like me or actual agencies that do not require “big bucks” to help you. Spend your money where you get a return; if done properly, the money you spend will repay itself in new job orders.

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Trying It on For Size



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Will the era of more “project work” mean less clients interested in our services?

That’s the sinking feeling that washes over some recruiters when reviewing the latest Robert Half Technology survey, which shows that nearly three-quarters (73%) of 1,400 chief information officers interviewed said it’s beneficial to bring in prospective employees on a contract basis before hiring them for full-time roles.

CIOs were asked:

“In the current environment, how valuable is it to have a prospective employee work on a project or contract basis as a means of evaluation for full-time employment within your IT department?”

Their responses:

  • Very valuable — 28%
  • Somewhat valuable — 45%
  • Not-at-all valuable — 25%
  • Don’t know/no answer — 2%

Companies are understandably cautious and want to avoid costly hiring mistakes — and working on a contract basis allows IT professionals to avoid resume gaps — but does anyone else question this trend for our industry?

Jeff's On Call!

Jeff on Call: What Can I Ask In a Reference Check?



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Q: What can I ask in a reference check?

As many personal and professional questions as you like. Just be sure you have the consent of the candidate in writing. There are no specific restrictions, but of course don’t cross the line into asking about:

  • Race
  • Religion
  • Sexual Preference
  • Age
  • Physical Characteristics
  • Mental Health
  • Marital Status
  • Family Responsibilities

As long as you have the consent of the candidate, disclosure is the reference’s problem.

There should be a law against reference checking. It’s the most subjective, easily contrived and inaccurate way possible to gauge who will become a successful employee.

The area of law is known as defamation or defamation of character. There are two types — libel (written) and slander (oral). Three probes can be used to find out if you have a problem.

  1. The communication must be likely to interfere with the candidate’s employment.
  2. The communication must be false. (How do you know? Attempt to verify it, and document your efforts. This may be enough to prove your allegation.)
  3. The communication must be represented as fact rather than opinion. (“John was absent from work at least two days each month.”, not “John seemed to be absent from work a lot.”)

Since employment is considered important, false statements of fact are presumed (legally assumed) to be malicious (defamation per se) invoking punitive and exemplary damages without the usual burden of proof.

Fortunately, a majority of states have recognized a conditional privilege to protect those who obtain information about a prospective employee on behalf of a client. This was acknowledged in a typical case involving a nurse’s registry. (Judge v. Rockford Memorial Hospital, 17 IllApp2d 161, 217 P2d 687)

If you want to get candidates hired like crazy, pick up a copy of my book The Perfect Job Reference. It’s currently out of print, but you can get a copy from your library, used bookstore, or by Googling the title on the Internet.

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To participate in future Q&As, email jeff@placementlaw.com. Keep in mind you should always consult with your own attorney. Nothing contained herein should be construed as legal advice. It is for your information only.

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Fordyce TV: Perm Fee Negotiations



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Neil Lebovits, CPA, CPC, CTS — a Fortune 500 Staffing industry executive turned trainer — will join us on the next episode of Fordyce TV! Mark your calendars for Tuesday, July 21 — Neil will be talking about the “real” perm fee negotiation secret you may have never thought about.

In this fast-paced, highly energetic, information-packed episode, Neil will “go back to the basics” to share a technique that most recruiters, let alone clients, don’t even think about.

“You can never be overpriced when it is always the customer who will later decide if they WANT TO PAY THE PRICE,” he says.

It’s a simple but seldom used close that works almost every time, he adds.

“If what they fear now is true — that you are indeed overpriced — then they will indeed not hire your person later. However, if they are wrong now, then they will be thrilled that they saw your person!”

Neil will share the concept, closes, analogies, and potential scripts that can go along with it. This is a great method that can also incorporate all of your proven “fee closes.”

The show starts promptly at 2pm ET on www.fordyceletter.com (right before the show you’ll see a small TV logo — click that box and enjoy the show — if you don’t see the box at 2, try refreshing the screen once or twice until you see it). There will be a live Q&A session via the chat box after the presentation, too, so come prepared with questions.