Welcome to The Fordyce Letter:

The Fordyce Letter

Straight Talk for the Recruiting Profession


Ask Barb

Ask Barb

Are Your Recruiters W-2 or 1099?



Ask Barb

Dear Barb,

I have my recruiters all working on a 1099 and at a recent conference I heard you say that they may not qualify as an independent contractor. Can you explain further?

Stephen Z.
New Orleans, LA

Dear Stephen,

Talk this over with your accountant and go to IRS.gov and print out the various requirements which must be met in order for someone to qualify as a 1099 employee. If they do not meet 100% of the qualifications listed, you need to deduct payroll taxes. Better safe than sorry.

Barbara J. Bruno, CPC, CTS

Ask Barb

8 Suggestions for Retaining Your Recruiters



Ask Barb

Dear Barb,

How do I compete against the companies that offer my recruiters the ability to work from home, much higher commissions and provide them with an ATS, back office and support?

Sarah R.
Los Angeles, CA

Dear Sarah,

This is no different than your recruiters going to work for one of your competitors, except for the ability to work from home. Many recruiters

Ask Barb

IT Contract Staffing: A Lucrative Niche



Ask Barb

Dear Barb,

I want to begin to add contract staffing to my executive search firm and have several questions. Do I need to operate under a separate name? What is the best way to fund the payroll? Do I have to provide benefits for the contractors? My niche is IT; do I place contractors in my same niche? Sorry about all the questions, but I’ve only done executive search for over 20 years.

Dave G.
Baltimore, MD

 Dear Dave,

I’ll try to address all of your questions. IT contract is one of the most

Ask Barb

The ‘Go To Gal’ Who Doesn’t Want to Be



Ask Barb

Dear Barb:

In the past 15 years, I’ve opened new offices and even new divisions for my company. My owner just informed me that this year, he wants me to start up an entirely new niche in a different state.  I know I’m one of the few women who is single and not tied to the area, but I don’t want to start over again. Do I approach my owner or do I just leave?

One of my clients has been offering me a job for the past year and I know some of our competitors would love to hire me. Why does my owner think he can constantly do this to me?

Ask Barb

When In Doubt, Send Them Out



Ask Barb

Dear Barb:

This is going to be a loaded question, but I want to ask if you think men or women are better at our profession. I think women are more intuitive, and that the guys in my office often screen out candidates that our clients would hire.

It seems like the hardest people to convince are often my co-workers. You always say, “When in doubt, send them out,” and let the client decide.

Ask Barb

Lesson Learned: If You Signed It, You Have to Live With It



Ask Barb

Dear Barb:

How do I get around signing agreements that are written by my clients?

We just got burned by a client who hired someone from us and demanded a refund after nine months. I didn’t even realize the terms were refund vs. a replacement.

I have no intention of refunding the fee because I think their contract is unreasonable, but this is one of our best clients and I don’t want to lose their business. How can I make them see this situation from my point of view?

Can you give me a short script I can use when contacting them back? I’m a fair guy, but a refund after nine months is a ridiculous request.

John S., Fort Smith, AK

Dear John:

Ask Barb

Too Many Fee Options May Mean No Fee At All



Ask Barb

Dear Barb,

For years we charged 1% per $1,000 for direct placements, but that seemed to confuse our clients. As a result, we have several different fee options. We also charge a lower fee percentage if a client does not request us to conduct reference checks.

Our normal fee is 25%, which we will lower to 20% if a signing bonus is included in calculating our fee. When we place someone at the executive level, we charge a 30% fee, unless they make multiple hires from us and then we reduce the fee to 28%. For positions that pay under $20,000 we charge 20%.

Ask Barb, Business Development, The Business of Recruiting

Want a Big Biller? Hire A Hotel Caterer



Ask Barb

Dear Barb:

Is it me or is it getting harder to find people who will put in the hours to be good at this job? Out of the five people we hired last year, we only have two left, and they are average. They don’t seem to have the commitment or work ethic that my current employees have; they are out the door at 5:00 pm.

When I suggested they may have to conduct research or talk to candidates during evening hours, I met with resistance and was asked if I paid overtime for evening hours. You would think these people would be grateful for their job and put more effort in to achieving their goals. Is this something I need to tolerate or am I not hiring the right people?

Dave B.

Plantation, FL

Dear Dave:

Ask Barb, Fees

Do Splits Only With People You Know



Ask Barb

Dear Barb,

At the end of last year, I was contacted by a recruiter in New York for assistance on a search they were working. Bottom line is that I provided the candidate who was eventually hired by their client. My candidate started his new job and is doing very well.

Our agreement was that I would be paid 50% of the $32,500 placement fee when cash came in. It is 120 days later and I still have not been paid. The owner of the recruiting firm is not returning my calls. The recruiter I worked with offered to send me $2,500 toward what they owe me, which just adds insult to injury.

If I go to an attorney, I’ll end up losing a good portion of the monies collected. What would you advise me to do in this situation? I’m not a bank and want the $16,250 I’m owed. This is the first time I’ve done a split with another firm and it’s going to be the last.

Frank Z.

Austin, TX

Dear Frank,

Ask Barb

Training Your Staff Gives You the Edge Over the Competition



Ask Barb

Dear Barb:

In my last career, I had a line item for training in my budget. As an owner of a recruiting firm, I don’t budget money for training, yet I know that is one expense that can give me the greatest return on my investment. I get so many emails from trainers every week, and most of the information is not relevant or consistent. I opt out of many of them that send too many emails.

When I go to conferences, you can listen to three trainers and many of them don’t agree on how to get great at this profession. How do I determine which training is going to work and which trainers are just total BS?