Back Door Hires Case Study #4 “We paid another recruiter.”
"We paid another recruiter."
Out of all of the Backdoor Hire issues, this one is the most difficult to collect for a number of reasons. The other aspect that is typically true about this type of Backdoor Hires is there is not typically a good or bad guy. You have two different perspectives, and both sides believe at their core they are in the right.
With that being said, we still collect a lot of money for clients that are told they paid another recruiter. If you are ever told this, PLEASE do not just take what they say and move on. More than likely you are owed a fee, and depending on the facts, the debtor may owe two recruiters for the same hire. The reason this can happen is the hiring company has an obligation to track the resumes that come into their company and make sure they know where each one came from. This type of Backdoor Hire is why you really need to make sure you have a signed contract with all of the safeguards that we discussed in the earlier chapter. The contract spells out what they are supposed to do, and what happens if they hire a candidate that you presented.
The problem with these types of Backdoor Hires is only about half of our clients have a signed contract. If we do not have a signed contract, our fallback position is procuring cause. If it was not for your actions, the candidate would not have been hired. The problem with that argument is if they paid another recruiter, they could try to claim the other recruiter was the procuring cause, and they may be correct. If you had an agreement that said something similar to, "If we present a candidate, and they are hired with 12 months from the last presentation, a fee is owed," the procuring cause will become less important. www.backdoorhires.
Let me share with you a few of the darker sides of this type of Backdoor Hire:
- Sometimes when they tell you they paid another recruiter, they are lying and there was never another recruiter.
- We have seen on a few occasions where the HR manager takes your candidate's resume you sent over, and they forward to another recruiter they have worked with for years. In a few cases we have uncovered that the HR manager was receiving a cash kick back from another recruiter. This type of Backdoor Hire does not happen often, but it does happen from time to time.
Let me also say that sometimes you will hear the argument "We paid someone else", and what you find out is that they paid an internal referral to an employee that recommended this candidate. If you hear this argument, please understand that this is a totally different type of issue and they definitely owe you a fee. This usually happens once you tell the candidate about this position; HR then searches the company through LinkedIn, finds out there is someone at the hiring company who used to work with the candidate, and reaches out. These fees will be owed because you were the procuring cause. If it had not been for your actions, the candidate would not have reached out in the first place.
Now, what do I recommend you do first when you are told, "We paid another recruiter"? Go through your checklist. Do I have a signed contract, and what does it say? Do a little digging and ask who presented the candidate first. Ask who the other recruiter was that they paid. Did the candidate know of this position before you talked to them, and do you have proof that you disclosed the position to the candidate? (Helpful hint from the author: it is always much easier if you have an email documenting that you told the candidate about this position, and he confirms in writing that he does not know about this position.)
Once you get this information, call me and let us talk about the specifics of your Backdoor Hire. These types of collections are VERY difficult to collect, and if the debtor has said, "I am not paying you because [we paid someone else]," please keep in mind that they have said the magic words I mentioned a few chapters ago. You need to stop talking and get either your attorney or myself involved.
Case Study Number One:
Fortune 500 company
Fee Owed: $26,000.00
Reason for the Dispute: They paid another recruiter that presented the candidate 6 weeks after my client had presented the candidate. The hiring company and our client had a signed agreement stating they are owed a fee if the candidate was hired within 12 months of the last presentation.
Resolution: After working our way through the layers of bureaucracy and the hiring company's legal department, the hiring company paid the full fee and our client rebated 50% back on two future hires. This was a win/win scenario. Our client was paid, the hiring company received some value back, and our client saved a revenue source.
Case Study Number Two:
Mid-Sized 100,000,000 Sized Company
Fee Owed: $19,000.00
Reason for the Dispute: They said they paid another recruiter, but after a little research we found out that they DID NOT pay another recruiter. It was, in fact, an internal referral. We also found out that about one week after our client presented the candidate an internal employee made the recommendation, and they paid him a small finder's fee. Our client did have a signed agreement, and we collect the full fee of $19,000.00.
Footnote: If our client did not have a signed contract, we would have been lucky to get half of their fee.
Wilson Cole is the founder and CEO of Adams, Evens, & Ross-NC,LLC, the nations largest credit and collection agency design exclusively for the staffing and recruiting industry. In 2008 he was inducted into INC Magazines, "INC 500" for being the CEO of Adams, Evens, & Ross-NC,LLC,, the 307th fastest growing privately held company in America. This exclusive group of other INC 500 CEOs includes Bill Gates of Microsoft and Larry Ellison of Oracle.In 2007 Recruiting & Staffing Solutions Magazine's Editorial Staff named him " The Billion Dollar Man" due to the fact that he had collected or helped his clients collect more than 1 Billion dollars in past due debt over his career of almost 20 years as CEO ofAdams, Evens, & Ross-NC,LLC,