Include Commissions in Your Fee Schedule When Placing Sales Pros

Editor’s note: Jeff Allen has heard every employer excuse that you can imagine for not paying up — and dozens more that defy imagination. Over the last 18 months, he’s documented one a week. 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 hired the candidate at a lower starting salary.”

How Client Pays:

The victim of this is the salesperson placer. Since the candidate’s base rate is the only promised (“guaranteed”) compensation, the client argues that commissions aren’t included in the fee computation.

The variations are endless, ranging from actually paying the candidate less at the beginning (often with a wink and a promise) to excluding the value of perks (up to 40%). For this reason, vigilance plus verbiage is necessary.

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Vigilance is your responsibility. Verbiage is mine. Here’s what I recommend:

The estimated gross compensation includes projected commissions, bonuses, incentives, and perquisites. It shall be estimated at not less than the amount earned by the candidate in his last position.

If that scares you, then start placing at a fixed fee.

Otherwise, you’re a visible victim.

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.

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