Back Door Hires Case Study #9 “Yes, we hired them, but other candidates did not last as long as they should have so we are taking them as a credit.”

This argument is very similar to the argument discussed earlier in the book, "The candidate did not stay through the guarantee, therefore, we do not owe a fee". The difference with this argument is it is often made by one of your larger clients that you have worked with for an extended period of time who you have made multiple placements with. The hiring company's argument usually happens when you have, for example: a candidate that you place in the Southeast for a sales manager position who does not work out in the end. They decide to promote internally and not allow you to replace the position in the Southeast. Then, as you place a candidate in the Northeast position, they want to claim that this candidate is their replacement. The biggest question that our clients have to ask themselves is, do they want to have a dispute with their client over one position? That can sometimes be an absolute yes because this client has a history of paying slowly and is taking up too much of your time. To add insult to injury, they are not wanting to pay you for a completely different search in a different position.

In this chapter, we are going to assume that your scenario is you want your money, and you are willing to let the relationship go with this specific client. Again, I cannot emphasize this enough, 90% of these cases could be avoided and you would be able to collect your fee on your own without us getting involved, if you had a signed agreement that had very specific parameters on how the guarantee is utilized. In plain English, you want some wording that explains all guarantees for a specific position and guarantees on candidates cannot be offset by different positions. I recommend you get that specific with your clients because it is not only good from a collection standpoint but, in my opinion, it is very good from a client relationship standpoint. It spells out what those roles are, especially if you have a high level of turnover at a specific client. The best example I can give you is the one I used earlier in the book: you need to treat the guarantee and credits almost as a prenuptial agreement that states if things take a turn for the worse, then this is how we are going to solve the problem for you and your client.

I can tell you when we do run into these types of scenarios, it is almost always going to be some form of settlement vs. having these types of cases go through court. The reason I do not like these cases to go through the legal system is because they have a higher percentage of our clients being countersued in the midst of the legal process. This is because their attorney inevitably claims that you did not screen properly and caused your client significant harm by providing them with incompetent, unscreened, and unvetted candidates. In 25 years, we have only had one or two clients actually lose a countersuit. The problem with countersuits is that they create additional expenses for the defense portion of the attorney fees rather than having the attorney handle the collection on percent contingency. If you do run into these types of collections, please do not misunderstand me when I am saying we do not run it through the legal system as often. We still collect 75%-80% of these scenarios. I am just a bit reluctant for the client to run it through the legal system because the debtor is going to build a defense based on the same facts. If our clients carry Errors and Omissions Insurance, I am not as concerned about that because we have noted most policies cover the legal defense portion of those types of claims.

With this being the last chapter, scenarios, and case studies, I feel it is my duty to go back to our basic frame. You absolutely need to have a signed agreement and specifics on how things are handled when it comes to presenting candidates, hiring candidates, and what happens when candidates fall off. We often find these types of claims are the biggest dispute areas when there are splits done between recruiters. Make sure if you are doing a split with another recruiter, you get an agreement signed that guarantees are handled when there are multiple placements being made at the same company for different positions.