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Collection Tip: Avoiding the ‘Employee Referral’ Scam


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Jeff Allen COllection Tip

Editor’s Note: Every Monday, Jeff Allen offers you a tip about what you should do to ensure you never miss out — or get beat out– of your well-earned fee

What Client Says:

The hire was through an employee referral.

How Client Pays:

Employee referrals are among the easiest and most common fee-avoidance moves. Here’s how they do it:

  • Select the candidate you want to hire.
  • Introduce him to an employee (preferably someone he could have known).
  • Ask the employee to “recommend” him.
  • Tell the candidate that the employee’s recommendation was the reason for the offer.
  • Tell the candidate that he shouldn’t be talking to that haunting headhunter.

If the client is just a little unsavory, the employee file can be filled with:

  • A backdated reference letter from the cooperative coworker.
  • A backdated, backdatestamped, back-stabbing application with the coworker’s name as the source of the contact.
  • A thank-you letter and copy of an employee referral check (“bounty”).

What can you do about it?  Haunt that candidate like you hunted him.  Write confirming letters about the results of interviews to the hiring authority.

You’re on the outside looking in.  Make monster faces in the window  Force your way into the process to make that hire a placement.

Clients get spooked.  They p-a-y!

More than thirty-five years ago, Jeffrey G. Allen, J.D., C.P.C. turned a decade of recruiting and human resources management into the legal specialty of placement law. Since 1975, Jeff has collected more placement fees, litigated more trade secrets cases, and assisted more placement practitioners than anyone else. From individuals to multinational corporations in every phase of staffing, his name is synonymous with competent legal representation. Jeff holds four certifications in placement and is the author of 24 popular books in the career field, including bestsellers How to Turn an Interview into a Job, The Complete Q&A Job Interview Book and the revolutionary Instant Interviews. As the world?s leading placement lawyer, Jeff?s experience includes: Thirty-five years of law practice specializing in representation of staffing businesses and practitioners; Author of ?The Allen Law?--the only placement information trade secrets law in the United States; Expert witness on employment and placement matters; Recruiter and staffing service office manager; Human resources manager for major employers; Certified Personnel Consultant, Certified Placement Counselor, Certified Employment Specialist and Certified Search Specialist designations; Cofounder of the national Certified Search Specialist program; Special Advisor to the American Employment Association; General Counsel to the California Association of Personnel Consultants (honorary lifetime membership conferred); Founder and Director of the National Placement Law Center; Recipient of the Staffing Industry Lifetime Achievement Award; Advisor to national, regional and state trade associations on legal, ethics and legislative matters; Author of The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide and The Best of Jeff Allen, published by Search Research Institute exclusively for the staffing industry; and Producer of the EMPLAW Audio Series on employment law matters. Email him at jeff@placementlaw.com.