How to Recover from Past Due Recruiting Debt
Wilson Cole | May 14, 2021
When it comes to debt, it can feel like a deep dark hole that you cannot climb out of. It is worse when you are in debt due to someone else not paying their part in time. As a recruitment company, you are extending a service to companies and they pay you for finding them highly skilled employees. So, what happens when a company does not pay you in time? You end up with past due recruiting debt. Essentially, this is a debt you incur when a client does not pay you on the agreed upon day. At first, you may think this is not a huge deal, but it can quickly spiral into a serious problem for your company. Every employee needs to be paid and in order to pay them you have to be paid by your clients. It is a circle of money that cannot handle being broken by late payments from a client. Unfortunately, any company is susceptible to falling into this kind of debt and you need to be prepared on how to handle it.
Have a collection specialist on staff
One of the best ways to recover from past due recruiting debt is to have a collection specialist on staff. They should be in charge of collections and making sure that all of your clients pay you on time; this also means that they will take control in situations where you have not been paid and action has to be taken against a company in order to get that money. This is a preventative measure that will keep you from ever falling into recruiting debt, but you cannot always fight this problem on the front end.
Recovering from debt is hard, especially when it is not your fault. The first step you need to take is setting any legal processes in motion to collect what you are owed. This may be a lengthy battle, so you should get that started as soon as possible. Once you do this, leave that worry to the legal experts and move on to what you do best: recruiting. You need to work on finding money from somewhere else to fill that debt and the best way to do that is to find more clients and start making more money.
Growing your business can be hard, but it is necessary when trying to recover from past due recruiting debt. Take a look at your current group of clients: are you targeting a specific industry or looking to cover a variety? If you are dedicated to one industry, then you should make sure that you dominate all other staffing agencies involved in that field. If there is even one business that you have not signed as a client, then go after it! For those of you staffing in multiple industries, see if there are other opportunities that you may not have taken advantage of yet. Is there a new group of companies moving into your area? Tap into any resource you can find and try to build up your client base. The clients that are your source of revenue, so make sure you are making as much money as you possibly can.
Who you choose to staff your clients with
The second part of this equation is who you choose to staff your clients with. The pool of employees you send to your clients are the money makers for your company, so you should be constantly looking for new people. Think of yourself as a talent scout and you are looking for the new stars of each field. You should have your recruiters looking at new graduates, experienced workers, and everyone in between. We are in one of the hottest periods of the job market which means that there are a lot of people moving around and you need to entice them to be recruited through your agency. In the end, your clients are paying for you to present the best workers in their field. If you live up to your end of the deal and place top matches with your clients, your reputation will go up and more companies will want to enter contracts with you.
Every deal you make as a company has a circular effect. We see this when you are trying to recover from past due recruiting debt and your entire company feels the loss of money; we also see this when you are sending good matches to your clients and you start signing more contracts. The cycle will keep moving and you have to make sure that you are prepared when an issue sends your company into debt. Rely on your collections specialist and legal team to collect the debt and use the rest of your team to find new clients and resources to make up the difference. If you take all of these steps, then not only will you recover from past due recruiting debt, but you will be making more money than before.
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.