Placements and the Law

SHIFTING THE POWER BASE FROM
CONSULTANT TO MANAGEMENT

Over 80% of hirers that responded to a survey indicated that their primary loyalty was to the consultant rather than to the firm that employed the consultant. While not particularly surprising, this does create a serious dilemma for management. Managers become unhappy when they think that an exiting consultant will walk away with 80% of their business.

Can you do anything about it? According to those same hirers, you can do plenty.

Most commentators said this occurred “because that’s the only contact I have with the recruiting and placement organizations. The only other people I hear from are the bookkeepers inquiring about the check. I never hear from a manager or owner unless there’s a problem or a dispute.”

Why should managers become involved with their consultants’ clients? We can think of dozens of reasons and have espoused some of them in other issues of The Fordyce Letter. Here are a few of them to ponder:

**No matter how competent your consultants may be, the hirers like to think that management takes an interest in what’s going on and how they’re being serviced. It’s great for their ego to think they’re important enough to attract management attention. And they are. All of them.

**With a broader overview, managers can expand business horizons through personal contacts. The favorite consultant may be doing a great job at filling technical openings, but probably never asks what other areas may need servicing.

**A management contact can be a great sounding board and an early-warning system for potential problems.

**Continuity can be reinforced through management contact. If a hirer knows that your organization cares – and you, as the chief executive, value their business, now and in the future – they are not nearly as likely to follow the consultant to his or her next destination.

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**Ed Koch, when he was mayor of NYC, ran around to his constituency asking, “How am I doing?” You should, too. The question itself means that you care about the client and the work being done for them through your subordinates.

**You have the authority to make things happen if you play your cards right. You don’t if you’re not even in the game. EXAMPLE: A manager calls a company to introduce himself, but his primary reason is to find out why business with that client is off by more than 50%. The client tells him he’s using another source with a 5% lower fee schedule. He admits he doesn’t like them, but bucks are bucks, right? The manager offers to meet the competition’s fee schedule but requires that all openings be given to his firm exclusively for 60 days and, in addition, negotiates for a partial reimbursement of expenses incurred during searches. Client agrees. Business is now up 50% from previous levels.

We’re sure you can think of dozens of other reasons for leaving your ivory tower. A Brief Caution: Don’t let your consultants lead you to believe that the client only wants to deal with them. It just isn’t so, and they may be trying to cover up something you should know about.

One isolationist manager started an experimental program of contacting employers that his firm had made placements with or received job assignments from. In his first six months, through breakfast and lunch meetings, he met almost 60 of them personally – and his firm is doing four times the business as in the same period of the previous year.

Since he initiated the key-contact program, companies now call him or his consultants to place business, and he has eliminated the need to hear from consultants about why they can’t do business with this company or that. He knows better.

Jeffrey G. Allen, JD, CPC, turned a decade of recruiting and human resources management into the legal specialty of placement law. For more than 32 years, Jeff has collected more placement fees, litigated more trade-secrets cases, and assisted more search and 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 many best-selling books in the career field. He can be reached at Law Offices of Jeffrey G. Allen, 10401 Venice Blvd., Suite 106, Los Angeles, CA 90034; (310) 559-6000; jeff@placementlaw.com.

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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