How to Solve a typical Recruitment Company Issue – Back Door Hiring
At Credit Management UK we have vast experience working within the Recruitment Industry and wanted to highlight how we have been able to help Recruitment companies we have worked with.
One of the main issues we have experienced is the issue of Backdoor Hiring.
Backdoor hiring- episode 1
This is an issue facing many recruitment firms whether taking on a previous temporary worker or conspiring with candidates to employ them directly whilst trying to get away with payment in introducers fees.
As previously a credit manager in a national recruitment firm providing temps and perms to construction, engineering and IT industries and then subsequently working for many recruitment firms since setting up CMG UK I have a vast amount of experience in making sure our clients get paid.
In a series of blogs, I will go through some case studies with you to show how we have helped our clients get paid for back door hiring.
Company- Firm of solicitors
Role-PI Solicitor
The Company and our client entered into discussions to provide candidates to expand the Companies PI department. The role was discussed, fees were agreed and one CV for a possible candidate was sent to the company.
The CV was rejected by the company claiming the candidate did not have enough relevant experience.
Some months later the candidate was found to be working for the company in the role that was previously discussed with our client.
An invoice was raised for the discounted terms initially agreed.
The Company refused to pay the fee stating they had initially rejected the candidate and was entitled to subsequently change their mind without incurring any fees from my client. They also stated the candidate was reintroduced to them by a friend of the candidate who is an employee of the company.
Our client’s terms and conditions state that if a fee is not paid to terms, any discounts negotiated will be cancelled and the full fee at the contractual rate will be due, therefore a 2nd invoice was raised for the balance of the fee when the initial invoice was not paid to terms.
A well worded Letter Before Action was sent to the company detailing what our client would rely on in court and bring their attention to relevant clauses of our client’s terms and conditions.
Subsequent to the Letter before action there was a rather heated email exchange between our client and a director of the company where the company stated they would rigorously defend any claim and claim their costs of dealing with the matter. With our support and assistance in wording emails in response to the company our client broke down each excuse for non-payment.
The final act of the company said that the candidate had not given our client permission to submit his CV to the company and they would call the Candidate as a witness if the matter went to court. The Company was trying every bullying tactic in the book.
However, our client had taken our advice of confirming every conversation in writing and produced an email from the candidate agreeing for his CV to be sent to the company. Once this email was received, the Company paid the initial fee by bank transfer, sending an email to our client stating the payment was in full and final settlement of the debt. On our advice, our client did not respond to the email but awaited confirmation that the payment had been received in their bank.
Once received a further Letter Before Action was sent to the Company for the outstanding interest, compensation and the 2nd invoice.
The Company again objected saying they had made payment in final settlement, we confirmed that the final settlement had not been agreed and therefore the balance was due. They very reluctantly paid the balance of the whole outstanding debt including compensation & interest.
Important points
- Keep detailed notes & emails not only with your prospective client but also with the candidate. Confirm conversations in emails.
- Ensure your terms and conditions say acceptance is when the employer meets or agrees to meet with a candidate that you have put forward to them. It is then irrelevant if the meeting was arranged through you or directly without your knowledge.
- Make sure that any discounts you agree from your standard rates are conditional on payment being received to the agreed payment terms. This will give you more leverage when negotiating payment.
If you are currently experiencing a situation like the above we can provide a review of your systems and processes and assist you to strengthen underperforming areas as well as coach your staff to ensure you will always get paid for any back door hiring as well as promoting best practice.
We can also assist you with specific back door hiring debts as well as general credit control. Please contact us to see if we can help on 03332 413 203.
