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The Fordyce Letter

Straight Talk for the Recruiting Profession


Articles tagged 'Fees'

Fees, Jeff's On Call!

Whose Fee? Phantom Recruiters and Contract Terminations



ask-jeff4

Dear Jeff,

I have been in the industry for over 15 years recruiting across Europe and the Middle East, permanent search and selection for senior management up to board level positions across a variety of industries.

My team and I always look out for your column with intense interest. Even after 15 years in the industry I constantly learn new insights to improve our business and overcome the more unusual challenges. Thank you for that, because we could never get the information anywhere else at any price.

We have a long-standing client that asked us to start a contingent search a few months ago. We sourced a candidate, set up interviews, and finally an offer has been accepted. However they now realize the CV was

Industry News

Hiring Programmers. Degree Not Required



Glassodoor Q2 employee survey

Glassodoor Q2 employee surveyBy a surprisingly large percentage, CIOs  put more emphasis on skills and experience than on tech degrees from prestigious universities.

A Robert Half Technology survey of some 2,400 chief information officers at companies with more than 100 employees found 71% place “more weight on skills and experience than on whether or not a candidate attended college/university.” Another 12% said university prestige didn’t matter at all.

Now, that’s not to say most tech executives complete ignore degrees — 17% say they put at least some weight on a candidate’s education. But what the majority look for first are candidates who can get the job done.

Jeff's On Call!

Promissory Estoppel: The Way You Get Paid When the Client Changes Things



ask-jeff4

Hi Jeff,

I have learned a great deal from your “Jeff’s On Call!” column and also from your National Placement Law Center Fee Collection Guide. The column is certainly a place where rookies and seasoned veterans alike can get useful tips for the search industry.

I am a veteran recruiter with over 20 years experience. I have done both retained and contingency search.

We have finished an extensive (3+ month) contingency search on an exclusive basis. During the search, the client sent names for us to screen and recruit. Of course one of these candidates landed the position after we screened, recruited, referred, and set up the initial interview. The client has offered to pay only a partial fee since they sent us the name of the candidate.

Unfortunately, I believe this will end up being hashed out in court. Will it matter what the reason is for the sending of the names to our firm? What legal theories does this case center on?

Industry News

Crowdsourcing Arms Race: $100k for a President



NRG employee referral

NRG employee referralCandidate referrals are taking on the feel of an arms race.

The payments have been escalating: $5,000, then $15,000 (plus a shot at a trip around the world), then $20,000 and $30,000.

Now, NRG Energy, a Fortune 250 power and energy company, has trumped the others, putting up $100k as the reward to the person — individual recruiters can play, but not agencies — who refers the next president of a new NRG division.

 

Yes, indeed, NRG will pay you $100,000 if you refer a U.S. candidate who gets selected as president of NRG Home. If you refer yourself, the money goes to charity, but you get to pick which one.

Jennifer Wallace, NRG senior vice president for human resources says the company “wanted the referral fee to generate excitement and drive people to action. The position we are searching for is a unique one, so our crowdsourcing campaign had to be innovative as well.”

People can only refer one person, and it has to be done by August 22. Use this form to do the referring. The job description is here. The fine print is here.

Fees, Jeff's On Call!

Ask For An Explanation, But Send Them Only An Invoice



Jeff Allen COllection Tip

Editor’s note: Jeff Allen has heard every employer excuse that you can imagine for not paying up — and dozens more that defy imagination. A few years ago he began documenting them in a weekly collections column. Because of the importance of collections, Fordyce will periodically reprise the most common situations he addressed. The complete collection is here.

What Client Says:

We didn’t hire, but referred the candidate to someone else.

How Client Pays:

Since the client isn’t in the placement business, you’ll be unable to show that it

Jeff's On Call!

What Happens to My Fee When My Client Buys the Candidate’s Employer?



JeffOnCall_logo

Hi Jeff,

You have helped me collect fees twice in the past, and the Jeff’s On Call! column has greatly contributed to our success. This is just indispensable.

I have a question that really needs answering, and would appreciate your help.

A client of mine who has hired about 6 to 8 sales reps from me in the last few years gave me a search for a sales person when I ran into him at a trade show in Las Vegas. I placed the sales manager who gave me the search.

I scheduled 8 interviews and he liked one candidate best. They are scheduled to meet for a second interview with the VP of sales again soon. The candidate currently works for a competitor and the word on the street is my client may be purchasing them as soon about the same time as the interview. It has been a rumor for months.

The sales manager told me he did not know if they would pay my fee if they buy the company because the sales rep would be an employee of their company. I told him I didn’t know the legal ramifications, but as far as I am concerned I set up the interviews and will be due a fee.

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%.

Fees, Jeff's On Call!

The “Other Division” Fee-Avoiding Forward Pass



Jeff Allen COllection Tip

Editor’s note: Jeff Allen has heard every employer excuse that you can imagine for not paying up — and dozens more that defy imagination. A few years ago he began documenting them in a weekly collections column. Because of the importance of collections, Fordyce will periodically reprise the most common situations he addressed. The complete collection is here.

What Client Says:

The candidate was hired by another division.

How Client Pays:

This is a “forward pass” situation — sendout to A, hire by B.

Fees, Jeff's On Call!

Why You Should Never Say “But For” In A Fee-Fight



ask-jeff4

Hi Jeff,

Thanks for all the help you give through your column in The Fordyce Letter and elsewhere. I enjoy reading your advice in the Jeff’s On Call! column and would appreciate any help you could offer about a current situation.

I’ve been in personnel consulting business since 1983 and have some long-standing relationships with other colleagues and friends in our specialty area.

Currently, a situation has come up between me and one of these colleagues, Dean, and we are having difficulty resolving it so it is a “win-win” agreement.

Here’s the scenario:

Dean submitted a candidate back in August/September 2013 on a job order he took for a position at a company that we both do work for from time to time. The client did not hire the candidate at that time for that position. Dean’s submittal policy gives him credit for the referral for 12 months from the time of the initial referral.

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,