The Billion Dollar Problem That Recruiters Did Not Know They Even Have

The Billion Dollar Problem That Recruiters Did Not Know They Even Have

Wilson Cole | May 14, 2021

Problems are abundant when it comes to the staffing and recruiting industry. They come in different shapes and forms and many of them can easily be spotted. However, there is one billion dollar problem that many recruiters didn't even know they have. This is called back door hires.

Everybody knows that backdoor hires happen but they don't recognize it when it happens to them. This is called the billion dollar problem as many staffing and recruiting companies lose out on a large sum of money because of back door hires. But what exactly is this billion dollar problem and what can you do about it?

Understanding The Billion Dollar Problem

Many clients don't realize that they're owed when a debtor tells them that they find somebody that's worked or they say "gee we don't know you for this backdoor for this placement because we already knew the candidate". This is a very common excuse that will be used and you're assured that Back Door Hires will collect 80% of the time. There are a number of ways you can make it easier though and that's to have a possessory period, and to make sure that your contract is consistent.

Have a Possessory Period

Every staffing and recruiting company will want to have a possessory period in their contracts. This ensures that they'll be able to hold their clients liable to pay for their services. This includes even if the candidate was supposedly hired by another staffing and recruiting company. With this in place you're almost always guaranteed to get your fee even if it means your client will have to pay both staffing and recruiting companies for their services.

Keep Your Contract's Possessory Period and Other Details Consistent

To have a solid contract you're going to want everything to be consistent. The possessory period included. You could have a clause that protects you 110% but another clause mentions that you don't owe them a fee if they did this or that. These consistency problems can cripple your contract. If your contract is not solid and there are a number of inconsistencies then it might be rendered invalid. This makes it much more difficult to get the fee that you're owed and you might not even get it depending on how bad your contract is structured.

If They Make Excuses, Shut Up and Call Us

The one thing that we recommend whenever they say "hey there was another recruiter we're not gonna pay you" or "we already knew the candidate, we're not gonna pay you" or anything in between, is to shut up and call us. This may sound blunt, but it's the truth. Whatever you say can and will be held against you once you come to collect. Whatever happens, cease all communications with the offending company and get the people that need to be involved, involved. Get us involved and get your attorney involved so you have the best chance of collecting your owed fee.


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.