“The candidate called me back on their own.”
I cannot tell you how many times per week I get a call from a panicked recruiter with the same story that their client has just told them. They are not going to pay a recruiting fee for a candidate that they presented a few months earlier because the candidate reached out to them on their own at a later date. About half of these cases are with larger Fortune 500 Companies, and the other half of the cases are with very small Mom-and-Pop type shops. I can tell you after 25 years of collecting on these types of Backdoor Hires that the size of a company will typically determine if it was a case of the right hand not knowing what the left hand was doing, or if it is just a blatant disregard for the fee that is owed. Larger companies want you to present the candidate, but it is not uncommon for that same candidate to reach back out to another division at a later time. They will talk to a friend that they found only after the initial presentation, or go to the company’s website and fill out an application on their portal. With a smaller company, the candidate may reach out to the company and either the owners do not understand that he would still be owed under that scenario or they are just adamant that you did not provide any real value to them; so, they justify not having to pay a fee. With this type of Backdoor Hire, you almost always have a tale of two stories. With a larger company it is typically their bureaucracy, and once you bring it to the hiring manager’s attention, they will fix it on their own without having to get us involved. With the other scenario, the hiring company is a smaller firm, the opposite of that is true. When you call the owner of that company, he will either ignore you or tell you that he does not know what they owe because you did not do anything more than sending a resume. As a general rule, 90% of these will have to escalate to get paid.
Regardless of the scenarios that I have described, it also boils down to how well you were covered on the front side of the presentation. We are going to be far more successful if you have a signed contract, I know I am starting to sound like a broken record, that has some type of wording stating if they are hired within 12 months of the last presentation or discussion then a fee is owed. With this type of collection, we also need additional documentation. I want to see an email where you are presenting the job to the candidate. I want documentation showing that this specific company was discussed with the candidate, and it is very clear he did not have a clue that this company was hiring or a position was opening based on his or her email. I know a lot of my clients as a general practice will run a position by the candidate before they are presented to the hiring company. In most cases, this is done with a phone call. It is fine to do that, but I would request that as part of your process you add a follow-up with them in an email to recap the conversation you just had. If you simply put it in your notes and the candidate is later hired, the argument you could face is that you can write anything in your notes. Email is a more reliable document that shows when that opportunity was presented. The reason why I want you to document that conversation is it will help us collect the account if it comes to my office for collections; it will also ensure that about half of these cases will be collectible on your own. In some cases, it is very common for you to present the candidate, and the hiring manager rejects that candidate before you ever set up an interview. The candidate then reaches out to him at a later date directly. The problem with this scenario is the hiring manager honestly did not want the candidate. You got the interest up on the candidate so high, he either reviewed LinkedIn, saw someone there he knew, and applied directly on his own or he went in to apply for a different division of that company.
Assuming that you have a signed contract that says if you presented a candidate and they are hired for any position in any capacity within any division, and you can show that you presented this job opportunity to the candidate then either one of us will be able to argue procuring cause. That candidate would not have been hired for that position if it was not for your actions in the first place.
Whether or not the candidate is hard because it was a very large company or a smaller company, we will always hear a very similar argument in either case. That argument typically sounds like something along the lines of, “We do not feel that we owe a fee or a full fee because your candidate contacted us directly, and you did not do anything to screen a background check or set up any of the interviews.” I am sure about half of the recruiters that are reading this particular paragraph are shaking their head saying that does sound familiar. I have certainly been told that before in scenarios like this. The good news is, assuming that you have a signed agreement with the clauses that we have discussed earlier and possess,, what I like to refer to as the “Smoking Gun email” where you presented this opportunity to your candidate, we can point to the agreement and say it is not our client’s fault that you have breached the agreement and excluded our client from the process. These two business practices that I just described, having a signed agreement and a companion email, get 50% of all of your Backdoor Hires under this scenario resolved before you have to get us involved. In addition, it will make sure that we have all the documentation we need to get your Backdoor Fee collected.
Case Study Number One:
Large Fortune 500 Company
Fee Owed: $20,000.00
Reason for the Dispute: Our client presented a candidate, and the candidate was initially rejected based solely on their resume for an engineering position. A few days later, the candidate was overzealous and applied online for the same position. A different hurrying manager interviewed and hired the candidate totally unaware that the candidate had been presented two days earlier by our client.
Resolution: The company ended up paying the full fee because our client had a signed contract with all of my favorite provisions, and they had an email documenting that this position was presented to the candidate. Once we were involved, we connected with their legal department, and their legal department ensured that it was paid in a prompt manner.
Case Study Number Two:
Small-Sized 5 Million Dollar Company
Fee Owed: $12,000.00
Reason for the Dispute: Our client presented their candidate. The owner of the company did not hire the candidate partly based on the fact that he did not want to pay or incur an additional $12,000 recruiting fee, so he went with another candidate. At a later date within 60 days of the presentation, the candidate reached out directly to the owner to say he was not under contract with the recruiter, and the candidate was hired by the company. When our client confronted the owner of the company, he was told by the owner that he didn’t know what they were charging a fee for because he really did not do anything other than present a resume and the candidate was not under contract with the recruiter. Our client did have a signed agreement, and they had an email showing the candidate was presented.
Resolution: This particular account had to be litigated because the owner refused to resolve the issue when they were placed for collections. Our forwarding attorneys sued the debtor, and 30 days before the court date the debtor negotiated and made an offer to settle on $10,000, which our client accepted. In my opinion, this case would have been much more difficult to collect, even with litigation, if our client did not have an email trail and a signed contract.
Wilson Cole is the founder and CEO of Adams, Evens & Ross, 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, 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 of Adams, Evens & Ross.