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Articles tagged 'Fees'

Jeff's On Call!

Jeff’s On Call!: Candidates Paying Back Fees

by on Oct. 31, 2011


law_gavel

This week’s inquiry comes from Tim Burkhart:

Hello Jeff — really enjoy your industry input and availability via The Fordyce Letter. Always helpful.

I have been in the placement industry since 1984. Always on the perm staffing side of the business. Our company focus is in the accounting and finance area.

Quick question: a candidate of mine living in the city where I work has taken a job out of state via another recruiter. The candidate shows up for his first day of work and gets surprised with a ‘please sign this if you leave in the first year’ agreement. Basically, it states ‘if you leave our employ in the first year(12 months) you have to pay back the fee.’ That was never discussed by the recruiter (ever) or the client (ever) during the whole interview/offer /acceptance process. Is this legal or is he truly bound firmly to the agreement? He feels he signed this under duress for fearing his job offer would be rescinded.

Tim

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Jeff's On Call!

Jeff’s On Call!: No Payment for Consultant Hires

by on Sep. 6, 2011


law_gavel

This week’s inquiry comes from Floyd Prescott:

Jeff,

Over the years, I have learned much from viewing your column with bemused detachment, observing the predicaments “less savvy” recruiters have gotten themselves into through slipshod practices with unsavory clients. With 15 years of industry experience, I assumed I had seen everything and had the bases covered. Never had a client who refused to pay, until now. Your outstanding expertise is badly needed here and now.

My formerly best client of 13+ years with 60 some placements has hired a candidate I showed them as a consultant for about 6 months and has stated they don’t owe me any compensation for his services since no permanent placement occurred. I am working on finding a permanent replacement which I may or may not be able to do and they feel that fee, if earned again, should suffice for both. I have argued that would be two separate events to no avail. I have some suspicion that they are using this chump, who agreed to work at a monthly rate based on the full time base they originally offered him (half what he previously earned) before determining he could not sell his property and relo, and then plan to discard him when the project is done and declare the search over, owing me nothing. They are paying for his weekly travel and he seems happy with the arrangement so far. Both parties have talked about making him permanent but the relo situation does not seem resolvable in this real estate market. The client has said they will (conveniently?) not consider a long-term commuting scenario.

I do not have a current signed agreement and have operated on a handshake since 2000. I do have a signed agreement from 1998 when I was with another firm that says any employment results in a fee (which has always been my understanding going forward from there). I know I have been an idiot but they have always had searches that I work on contingency and they have always paid my 30 percent fee. I did not anticipate this situation arising.

There is other money on the table here that would be resolved in a few months. Client has shown some marginal behavior in the past but has overall been reasonable. They are highly respected in the community. I would consider declaring “Broken Arrow” and calling in artillery and air strikes on my position if it makes sense and forgo future business as I have a hard time giving them a pass on this.

You advice greatly appreciated.

Regards,

Floyd

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Fees, Jeff's On Call!

Jeff’s On Call!: Candidate Fee Reimbursements

by on Aug. 29, 2011


law_gavel

This week’s inquiry comes from Neil Arden:

Hi Jeff-

Enjoy your column!

Thank you for providing you services to the staffing community through the Jeff’s on Call column. I look for your columns and articles in The Fordyce Letter every month and would recommend everyone in recruiting profession to do as well. They too will see how your responses and tips are insightful and helpful when needing advice for different situations.

A candidate we want to hire has an agreement with a recruiter who placed him at a bank as a mortgage banker. It is a 100% commission job but receives benefits. He has been there for 3 months and has not had any luck closing loans. The deals he has brought to the table for the bank have either fallen through or been put on hold because of the overlays/underwritings of the bank. With some of the new regulations arising from the Dodd-Frank bill, he doesn’t see the light at end of tunnel with this company. He feels it is best to look around, but when he approached his recruiter who placed him at his current position (in good faith), the recruiter told him he will have to reimburse him the $10,000 placement fee he received from the bank.

My question is regarding a non-salaried/exempt employee; is a candidate liable to reimburse the placement fee to the recruiter, if the candidate wants to resign from his company within the guarantee stated by recruiter, if he is not earning enough income to provide for his family?

Is this agreement enforceable in court, when an employee cannot survive financially nor provide for his family?

Thank you!

Neil

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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!

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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Fees, Jeff's On Call!

Jeff’s On Call!: Start Date Payment

by on Feb. 1, 2011


fordyce-default

This week’s inquiry comes from Helen Stefan:

Hi Jeff:

I really love the column you are doing for TFL. I have found this a particularly helpful post and have often referred to it for educational purposes.

I could really use your expertise. Recently, I began working with a new company and made certain they endorsed our fee schedule which stated our terms (amount due on candidate start date). The hiring manager endorsed the terms and sent them back. A placement has resulted. Upon receiving the formal offer letter from this hiring manager, I was told that under no certain terms would we be paid on “start date.” In fact she argued that her corporation did not pay recruiting invoices until 90x following start date and that we would have to take this up with corporate. Having never experienced this before, I thought this might be something you would be able to help with. Do I have any recourse other than to send this to collections?

Best Regards,
Helen Stefan

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