Jeff on Call: Two Fees, One Candidate?

ask-jeff3

Q: Can the employer be required to pay two fees for hiring the same candidate?

What? Two fees for one placement?

Absolutely! It happens around a half-dozen times a year in our office.

We estimate employer applicant tracking systems are less than 10% effective.
Job title differences, department differences, maverick managers, slow HR departments,
software glitches, or other things will slip the candidate through.

Many clients try to protect themselves with PSA (Placement Service Agreement) terms
like, “If a candidate is in our database, you won’t get the fee.” So if you see this, be sure
to insert a short time-limit (like three business days) for the client to notify you in writing
of a prior submission. This gives you the opportunity to check the facts.

Then “fill it and bill it or kill it!”

Be careful of the, “We already know him!” trick when some employee of the client has some acquaintance (real or imagined) with the candidate. If they worked for the same previous employer, this happens frequently.

The prior referral must be tied to some objective, verifiable acts, like a written employee submission for a referral fee (“bounty”).

An e-mail or regular letter from the client explaining the referral period and notice requirement is another simple way to clarify this.

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If there’s no PSA that short-circuits your fee schedule, use a referral period.

We don’t lose cases because we use this wording:

“Our fee is due in the event a candidate we present is engaged to perform services, directly or indirectly, in any capacity by the client or any of its affiliated entities, within one year from the date of our last communication with the client regarding the candidate.

It is also due if the client refers the candidate to any other person or entity and the candidate is engaged to perform services within one year from the day of the referral from the client.”

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To participate in future Q&As, email jeff@placementlaw.com. Keep in mind you should always consult with your own attorney. Nothing contained herein should be construed as legal advice. It is for your information only.

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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2 Comments on “Jeff on Call: Two Fees, One Candidate?

  1. Jeff,
    In my opinion, the real issue here is search firms attempting to create a fee obligation on a candidate they were never asked to find, yet decided to submit anyway. Our true “partners” in the search profession work the positions they are asked to, and are paid proper fees for doing so, but what they don’t do is get an agreement in place and then spam us with candidates we don’t want, or need, while failing to produce the candidates we asked them for in the first place. Even worse, they typically alter the candidate’s expectations to position us as the “bad guy” if we don’t proceed with an interview. For better or worse, that is the typical pattern(M.O.) of the (primarily contingent)search industry, and as such we have changed our agreement to reflect a certain position, supported by an actual requisition number.
    So, if the goal is to obtain a fee while alienating a client, then I would recommend filing suit. I also understand that certain small firms may try to pull this stunt to save a fee, but in the publicly traded world we don’t respond positively to firms attempting to turn an hunting license into a license to kill, and are happy to deploy extensive legal resources to make that point.

    Cheers,

    Barry

  2. Gee Barry,

    It sounds like you might want to try actually vetting the recruitment firms that you work with. Check them out, check references, do your homework! That way you could add value and pick the best one or two firms to work your searches rather than using a bunch of weak sister firms chosen simply because they are willing to sign the typically onerous PSA.

    Here’s a novel and productive way to use PSA’s: Any firm strong enough to be willing to walk away from the ridiculous terms set forth in most PSA’s – those are the recruiting firms you should want to work with. Those firms actually fill enough jobs so that they don’t have to put themselves at risk by working under rules that only consider the needs of the client and leave the vendor wide open to getting ripped off.

    If a firm “empties their filing cabinets” on you, then it is likely that you haven’t done your homework. In any case, immediately send them a registered letter stating that you will no longer accept their referrals.

    By the way “Barry”, you would gain a lot more credibility on this site by being proud of who you are rather than hiding behind a nom de plume.

    Tom Keoughan
    http://www.toyjobs.com

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