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The Fordyce Letter

Straight Talk for the Recruiting Profession


Fees

Closing, Fees

Developing Exclusives – The Written Agreement

by on Aug. 16, 2011


exclusive contract

The agreement to work on an exclusive basis with your client can be confirmed either verbally or in writing. However, as a wise man once noted:

“Verbal agreements aren’t worth the paper they’re written on.”

The exclusive relationship is established verbally but should be confirmed in writing and signed off by both parties. If you are dealing with a reputable client who is sincere about utilizing your services on an exclusive basis, there should be no valid reason why they would not sign a document that confirms that to which they have already agreed. Therefore, we will concentrate on written agreements.

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Closing, Fees

Developing Exclusives – The Presentation

by on Aug. 10, 2011


exclusive contract

In our previous article we stated that “… exclusive relationships generally produce better results, in less time, while requiring the investment of fewer client resources than traditional methodologies.” However, this is a fact that may not be widely accepted by your prospect/clients. Therefore, in order to sell the concept of exclusivity, whether retainer or contingency, you must understand the justification for establishing such a relationship.

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Closing, Fees

The Power of Exclusives

by on Jul. 13, 2011


exclusive contract

The state of the economy notwithstanding, the opportunity to secure business on an exclusive basis may be greater today than at any time in the past ten years. Companies have no margin for error when filling mission critical positions and many of them are choosing to use fewer vendors who can produce better, more consistent results. This presents an increased opportunity to build exclusive relationships with your clients. However, in order to take advantage of this opportunity, you must be prepared to understand and properly present the benefits that accrue for clients through this type of mutually supportive relationship.

The major difference between a contingency client relationship and an exclusive client relationship may have been stated best by a client who said:

“If I understand it correctly, with a contingency relationship I’m in if it works. However, in an exclusive relationship, I’m in and it better work. Does that about sum it up?”

Yes, that about sums it up.

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Fees, Jeff's On Call!

Jeff’s On Call!: Candidates “In the System Already”

by on Jul. 5, 2011


law_gavel

This week’s inquiry comes from Rhonda Miller:

Hi Jeff,

I really appreciate your contribution of time and expertise in the Jeff’s On Call! column. Since I started reading it, I find that I have broader thinking on day-to-day scenarios and give more thought to the legalities of potential pitfalls. It is a much more enlightened perspective than before.

I have a placement in Illinois where the client has offered a 5K fee rather than the 25K required on my fee schedule because supposedly an in-house contract recruiter had the candidate in the pipeline (unbeknownst to the candidate) and had referred the candidate to some manager six months earlier – although not for any particular job.

This company is looking for employees with my candidate’s experience all the time. The manager didn’t act on the referral and then left the company. Therefore, nobody acted on the referral at all. (Since the candidate worked for a subsidiary of the client, it is possible that is how the contract recruiter got the resume. She is very aggressive, so it may have been on LinkedIn also.)

My fee schedule was signed before the client started using contract recruiters, and there is nothing about them in it. It provides that I have a 12-month referral period, but they say they had the candidate’s name in their system before my referral. There is no doubt that “but for” my efforts for four months, the candidate would not have been hired.

The internal recruiter explained the situation to the RVP for this division and came back with 5K in recognition of my efforts. She maintains that had this gone to her boss (who doesn’t want to pay outside recruiters) there would be no fee at all. I really worked long and hard on this deal.

What should I do? I don’t want to lose the 5K, but I also don’t want to give up half the fee in attorney’s fees and possibly even lose the 5K offered.

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Fees, Jeff's On Call!

Jeff’s On Call!: Split Fee Owed?

by on Jun. 27, 2011


law_gavel

This week’s inquiry comes from Sue Yager:

Jeff, I really need your help. As an avid reader of The Fordyce Letter for 10 years now, I have always appreciated your insight and knowledge of the recruiting industry, and find myself needing your help for the first time.

I believe I have more of a moral dilemma than a legal dilemma. Here’s the story: 4 years ago I worked with another recruiter, who was with another agency, and we sometimes did splits. This other recruiter emailed a resume to me and told me this candidate was fantastic, and asked whether she would be a good fit with any of my clients. I called the candidate and did a full interview with her even though I didn’t have any job opportunities for her at the time. I kept in touch with this candidate over the past 4 years, and she is now actively interviewing with one of my clients. I have not spoken to the recruiter who sent me her resume for about 2 years, and the candidate hasn’t spoken to her for several years.

Here’s my dilemma: Do I still owe that recruiter part of the fee? I want to do the right thing, but I don’t want to give away money unnecessarily either. (P.S., there was never a formal split fee agreement in place between us.)

Thank you for all of your help.

Respectfully,

Sue

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Fees, Jeff's On Call!

Get Paid When the Candidate Accepts

by on Jun. 13, 2011


money by Andrew Magill

Contingency fee recruiting has grown over the past 50 years into the largest segment of the placement industry. While today’s search firms bear little resemblance to the applicant-paid employment agencies that spawned them, one vestige remains: The fee is not considered due until the candidate actually starts. An “instant fall-off” means no fee.

It’s s though you’ve loaded a “feeshooter” and aimed it at your foot. You’re just waiting to pull the trigger when something happens between the acceptance and the start. It takes just one instant five-figure falloff to make you vow to never hobble away again.

We’ve been changing this since 1985 when we introduced it to TFL subscribers after a beta test with clients. It has worked very well. Nobody’s ever been arrested. Their success and our refinements over 25 years can now be yours.

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Fees, Industry News

Staffing Firms Rally to Fight Off Disclosure, Fee Limits Bill

by on Jun. 1, 2011


MAPS-logo

A coalition of labor unions and immigrant workers organizations is pushing a bill in Massachusetts to overhaul the state’s staffing industry.

If it’s adopted — almost half the state Legislature is listed as sponsors — the bill would impose a number of administrative obligations on staffing firms, and potentially limit some fees while raising costs. It exempts most professional workers, but it would apply to a broad range of workers, including nurses, clerical, blue collar, and similar. Violators could be fined.

Proponents, who were contacted but didn’t respond, are positioning the legislation as a “temp workers right to know bill,” highlighting provisions requiring staffing firms to inform employees for whom they’ll be working, how much they’ll be paid, where they’ll work, and what they’ll be doing.

“No such law currently existing in other states”

While on its face benign, other provisions of the bill limit some fees and essentially end temp-to-hire conversion fees. It puts a damper on the practice of shopping good candidates, by prohibiting candidate referrals without job reqs. Out-of-state staffing firms could be closed out of placing workers in Massachusetts unless they had an in-state office.

“There is no such law currently existing in other states,” says Stephen Dwyer, general counsel for the American Staffing Association. “It is more sweeping and more harmful than any, bar none.”

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Fees, Interviews

Learning From Mistakes: Trying to Place Travis

by on May 2, 2011


image source: opensourceway

image source: opensourceway

The great major champion golfer Jack Nicklaus was renown for many things. One of the least notable, but most poignant, was his amazing knack for really only remembering the good experiences in his illustrious career. His memory of seemingly every detail of winning moments is legendary. He can go back 30 years and tell you the club, yardage, wind direction, and how many clouds were in the sky for a single shot during a 72-hole tournament. Meanwhile, he could not recite any bit of the history that occurred during any of his defeats. No reason to hold on too tightly to bad memories anyway. I mean, who wants to carry that garbage around?

This kind of “selective memory” I’m sure has some psychological effect on elite performers. If all you can remember is the good, than your confidence is bound to remain high at all times. So, how do we learn from our failures if they are so easily deleted from our minds? Nicklaus has also said that he is able to learn from past experiences but move on quickly and “stay in the moment.” The real question is: how can we as recruiters adopt this mentality while still learning from our miscues? It’s a balancing act to be certain, but one that must be done.

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Fees, TFL archives

Fee Cheaters: The Basics for Trumping These Dirty Dealers

by on Mar. 30, 2011


money_bags

“Fee? I never agreed to pay a fee to hire anyone!”

“We never signed anything with your company!”

“You can say or do anything you want…we aren’t paying you!”

Anyone who stays in this business long enough will eventually hear those dreaded statements. Usually, these are people who know they owe you, but are liars. Lying fee avoiders are easier to deal with than the ones who really believe what they claim.

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Fees, Interviews

I “FIRED” My Candidate…and Still Closed $27k

by on Mar. 4, 2011


yourefired

Last month, I “fired” a candidate during the interview/offer process, and I am 100% convinced the only reason I still earned the fee was because… (are you listening?) I emotionally “checked out” of the torment and refocused my efforts on the things in my business I could control, which were sourcing and recruiting candidates for other searches on which my firm was engaged. After nearly fourteen years as a third-party recruiter, I have learned a thing or two about candidate or client control… IT DOES NOT EXIST!

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