There are 5 main things people get flat out wrong about recruitment placement fees. Most of the things people get wrong are before they even have a candidate get back door hired and have to go chasing down the money they have already earned. Number 1 is getting a contract signed. Number 2 is avoiding arbitration clauses in your contract. Number 3 is knowing you have the right to remain silent when someone does not pay you. Number 4 is knowing when to turn it over for collections. Lastly, number 5 is never telling your client you have voided their contract. If you can do these 5 things, you will help yourself out tremendously in not getting back door hired in the first place but also making it much easier to collect the debt.
#1. Get A Contract Signed: Having a signed contract is a game changer for collecting debt. It makes it much clearer cut on whom owes what money to whom if there is a dispute. Some might say it was implied when they decided to work together. This a very weak argument when it comes to getting paid on past due debt. It is even weaker than verbal contracts. Some of the shortfalls with verbal contracts are that they cannot last longer than a year, and if the contract cannot be fulfilled in 12 months, it no longer exists. Save yourself a headache and time and just get a contract signed!
#2. Avoiding Arbitration Clauses: Our in-house attorney Samantha Cole hates arbitration clauses when it comes to collection accounts for a good reason. Many people see this clause and assume it is the best way to handle everything, but this is not the case. It seems great with email contracts, but if something goes wrong, it can backfire on the person who was doing everything right. It is no longer on the person who did something wrong and the costs are instead split evenly between the 2 parties. We have seen many people get themselves into trouble agreeing to this clause.
#3 Knowing You Have the Right to Remain Silent when Someone Does not Pay You: Many times after it is clear someone is not going to pay, people start trying to “fix it” on their own. In doing this, people often end up backing themselves into a corner with trying to take less money because less money is better than no money at all. This really hurts their case when they hire someone to fight for their money on a commission, and they have it on record saying they would be “happy for just half of the money.”
#4 Knowing when to Turn It Over: Very similar to number 3, you have to know when to hold ‘em and when to show ‘em. Sometimes, a phone call is all it takes to get someone to pay your past due debt. Other times, it is best not to hold on to them for too long and risk the company going out of business before you can recover your money or even wait too long and have the statute of limitations run out on you. It is all about evaluating what is best for you and your company and how much time and effort you want to put into something before you hand it over to someone else.
#5 Never Telling Your Client You Have Voided their Contract: You have done everything right up until this point, and you have a bullet proof case. There is no reason you should not get paid and then you say you have voided their contract. This might sound a little obvious, but we have seen many people get caught up in this moment and shoot themselves in the foot with this. If you try to collect on a voided contract, it is like trying to collect on a debt that never existed. This makes it very sticky when people void the contract and do not want to turn over any “bad” information with the account and hope for the best. This leads to a very big mess that is hard to clean up.
Taking time to make sure all your t’s are crossed and your i’s are dotted can pay dividends when trying to collect past due debt. If you stay away from these 5 big mistakes so many people fall into, you will save yourself a lot of time and headaches.