Your Candidate Can Collect Your Fee If You ‘Forget’ To Get A Signed Agreement

As long as the placement industry continues to do business without employer-signed fee schedules, candidate introductions and interview confirmations, it will be on the outside looking in. It’s cold out there, too.

Every day, we hear the “answers” to the question: “Why is it unnecessary or impractical for an employer to sign a fee confirmation?”

Among them:

  • Placements happen so fast, there’s no time to obtain a signature.
  • Hiring authorities aren’t authorized to commit their employers in advance to the payment of contingency fees.
  • It’s “customary” for the placement industry to operate on a handshake.
  • The employer is bound by the “acceptance of referrals” provision in an unsigned fee schedule.
  • The employer has the “burden of proof” to show that it didn’t hire as a result of the referral.

Unfortunately, the correct answer is “None of the above.” None of these arguments budge a judge.

Judges are budged by agreements that are legally enforceable. They sit bored on that uncomfortable bench day after day watching placers trying to forge links in a chain that’s broken. At one end of the chain there’s a piece of paper we call a “fee schedule.” At the other is an invoice for a placement. Somewhere in mid-air are various other pieces of paper called job orders, sendout sheets, and interview confirmation slips. Once in a while, there’s a letter from the recruiter to the “client” — rarely is there any reply.

Open most placement files and you’ll see nothing else to “prove” an agreement by the employer to pay the fee. (Resumes, background information sheets, notes about the employer, annual reports, product literature, and want-ads placed by the employer don’t even remotely qualify as proof of an agreement.)

Amazingly, we win these cases. In fact, our collection ratio is getting embarrassingly high. We’re not too embarrassed to brag about it, though. Your lawyer can brag, too, if you set the case up right from the beginning.

“Clients” don’t do what you want. The key is to use your leverage with the candidate while you still have it. That leverage will enable you to deputize the candidate as though he was under oath as reciting: “I solemnly swear to mention you, only you, and nobody but you, so help me Hunter.”

No, you don’t have to administer the oath. There’s a three-step, less obvious way at three critical checkpoints in the placement process:

1. The Cold Call

The typical ice-breaker with a potential recruit has you overcoming objections. Invariably, the most qualified candidates are the toughest to warm up. But once you get past the inertia of complacency, all recruits are basically the same. They all want to:

  • Retain their present job security.
  • Have you update their resume.
  • Interview only with companies that match their self-image.
  • Interview only for jobs they know will increase their happiness.
  • Interview only after usual business hours at convenient places.
  • Pay nothing to you.

The typical recruiter befriends placeable candidates like a missionary converting the heathen. After 20 years, I remember the feeling as though it happened last night — excited, flattered, and oh so committed to helping this stranger. Truly a knight in shining armor, magnetically bonded to this person I never met.

That is where most recruiters start to lose their fees. They’re afraid of losing candidates. They shudder at calling them too much ; cross their fingers that their spouses won’t pull them back; pray that they show up for the interview; and call to debrief them within seconds after their return. I’m sure some recruiter has even tried to debrief the parties during the interview!

Candidates are unaccustomed to having a public relations agent. They’re not quite sure how to react. So when the recruiter falls all over himself to please, they enjoy.

What’s really happening? The recruiter is compromising himself and his fee. He’s not asking for anything in exchange for his advice, advertising, and agony. He keeps saying how his “clients” will pay the fee; how it “costs nothing to consider career opportunities.”

What’s wrong with this picture? The approach selects and trains turncoat candidates — people who dance, get married, then forget who introduced them. It’s downright antisocial.

A candidate needs to be informed that he’s in a value-for-value relationship with you just like an employer. You need to inform him. You’re not a missionary in the job jungle. You’re a headhunter.

In addition to background information, you want a short, signed letter (handwritten is fine):

  • Thanking you for “representing” or even “assisting” him. Two sentences will do:

Thank you for your assistance presenting my background to prospective employers. I look forward to hearing from you regarding job opportunities.

  • Including a list of employers the candidate has communicated with in the past year.
  • Including a list of employers the candidate won’t consider under any circumstances.
  • Agreeing to mention your name during the interview(s). Only one sentence is necessary:

I agree to state ___________________ is the source of my referral on any employment application and in any interview with clients you locate.

2. The Job Presentation Call

I know you’re excited. Even ecstatic. I remember that feeling too. Who wouldn’t be? You’ve got a four or five-figure fee on the fire.

You call the candidate, and if he’s not there you leave “urgent,” “important,” and “emergency” messages.

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Have you ever noticed how much less excited candidates are than you? That’s because they don’t have a four or five-figure fee on the fire. They have a fuzzy fantasy future. Nobody likes to leave a known situation for an unknown one. The fear of the unknown is the most powerful demotivator in the jungle.

In his classic Self-Renewal, John Gardner said it all: “We don’t know that we’ve been imprisoned until we’ve broken out.” That’s why candidates punch holes in your ecstasy with questions about work, quirks, perks, fringes, benes — and the one you really can’t answer this early — salaries.

All of a sudden your excitement turns into defensiveness. You’re trying to justify why the job in the jungle is better than making license plates up the river.

Your excitement should be tempered with objectivity. Once the name of the “client” (not really — but that’s what we call a contingency-fee, no-commitment, non-exclusive employer) is revealed, you’ve broken your lever.

So here’s what you do:

  • Tell the candidate you’ve located an excellent opportunity.
  • Ask him when he’s available for an interview.
  • Tell him you’re going to send the details of the client, place, and date of the interview in an email to his personal address. In the email state:

I am pleased to inform you that the client we discussed by phone on ____________ is ______________. The interview is with ____________ it’s ____________ on __________at ______.

I would appreciate an email reply immediately to confirm that you will be meeting with Mr./Ms. ____________.

Pursuant to your email of ______________ please state on any application and in the interview that we referred you.

What will the candidate do? Call and decline to interview because he doesn’t like the company? Perhaps, but he would have done so anyway. Decline to mention your name? Of course not. Show up and not mention your name? Perhaps. But so what? You’ve established the one thing that forges the link you need. You’ve established you’re the source of the hire.

Many recruiters simultaneously send a copy of the email to the client. In chess, it’s called “checkmate.” We’ll never see the case. The client can’t wiggle out of the hook at the other end of the chain.

3. The Debrief Call

Most recruiters handle this rather well. They listen carefully, and use the information to try to align the client and candidate.

The only thing they don’t do is ask the candidate whether he followed through on mentioning them. It’s as though they’re afraid the fee will blow the placement. It may — but considering the alternative, ask. There are only two responses you’ll receive — “Yes” or “No.” Regardless, send an email to the employer with a copy to the candidate that says either:

We were pleased to refer _____________ to you on for the position of ______________. I understand _____________ mentioned that we referred him/her to you, and I look forward to hearing from you in the event you wish to pursue hiring him/her.

or:

We were pleased to refer_____________ to you on for the position of ______________. Since we referred him/her to you, I look forward to hearing from you in the event you wish to pursue hiring him/her.

You don’t need to administer the oath to your candidate if you follow these steps. Try them — we’ll never see the case, but let us hear from you anyway. Call up and brag! There’s no law against it.

Best wishes — it works.

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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