Today’s guest blogger is Wilson Cole. He is the CEO of BackdoorHires.com and Adams, Evens & Ross, the nation’s largest credit and collection agency designed exclusively for the staffing and recruiting industry. In 2008 he was inducted into INC Magazine’s, “INC 500” for being the CEO of Adams, Evens & Ross, the 307th fastest-growing privately held company in America. Adams, Evens, & Ross has helped more than 3,000 staffing and recruiting firms recover more than $1 billion in past-due debt and is an NPAworldwide Endorsed Program.
“We already knew the candidate.”
The most common excuse we hear from debtors that do not want to pay a recruitment fee is, “We already knew the candidate.” In most cases, these types of backdoor hires are the easiest to collect. The biggest hurdle for us to jump is to help the debtor understand that knowing the candidate and knowing they are looking for a job are two very different things. We also have the backdrop that the owner of the company is MAD; they are not really angry with the recruiter, but they are mad at either themselves or their HR manager because they did not have a better pulse on what candidates were actually available.
Typically, we get two versions of this argument that “We already knew them.” For the first one, I can follow their logic; the other one is a character issue on their hiring company and tells volumes about the person on the other side of the desk.
Argument Number One:
We already knew him and talked to him last week at a trade show. I have so many recruiters call me and tell me about this scenario, and then they follow up with asking me, “Do you think they owe me?” The answer to that question is a definite yes. The fact that they know the candidate is 100% totally irrelevant unless the candidate is actively interviewing or in discussions with the hiring company. If you recruit in a niche industry, then it is not at all uncommon that everyone knows everyone. This is especially true when it comes to sales and marketing candidates and, to a lesser degree, higher level management. They see each other at trade shows; they are talking to each other and referring clients and prospects back and forth at different times. The difference is knowing someone and knowing that they are ready to make a change that is the key. The fallback position is always going to be “procuring cause.” If it was not for the recruiter’s actions making that connection at that point in time, they may have never known that the candidate was available at all. I do understand the frustration that the person signing the check must feel. They knew the guy and their people spoke to the candidate, yet no one mentioned it. They are hiring, and now a $35,000 fee is owed. If you find yourself with that argument, simply ask the hiring company if they bring it up: if we follow your logic that we knew the candidate but we were not interviewing the candidate, then that would mean that we could not bring you any candidate that you have ever come in contact with? Once you phrase it that way, about half of the hiring companies will, reluctantly, go ahead and pay your fee.
Argument Number Two:
We already knew the candidate; Steve in Marketing worked with him a few years ago. When you hear this argument, understand that the hiring company does not want to pay your fee, and they have created an excuse to justify stealing from you.
Let me explain:
Assuming that the candidate is not actively or has not been actively interviewing with this company, what happens 95% of the time that we hear this excuse is after you ID the job to your candidate, they then Google or go to LinkedIn and see that an old business associate works for this company. So, they reach out to their former business associate and ask, “What is the company like?” or, “put in a good word for me,” etc.
This is a perfect example of “We knew them already, and after you made the association, we realized that we had mutual connections.” Please understand this is not a real reason; this is more of an excuse. Also, realize that I am not saying do not tell your candidate where you are presenting them. I am saying you should always do that, unless the search is confidential. I want you to tell them, but I also want you to document these conversations in email. Notes from your system will not hold up when their attorney gets involved, nor will call records. The best type of documentation is an email chain where you present the job to the candidate in writing. If you are not already doing this, it is your first homework assignment that I want you to do for the rest of your career: document everything through an email chain. I also want you to understand that the longer you wait to take action on this type of backdoor hire, the harder it will be for us or anyone else to collect. If you continue to talk to the hiring company, you run the risk of saying or doing something that will make the account uncollectible.
Case Study Number One:
Mid-Sized Electrical Company Backdoor Hired a Sales Rep
Fee Owed: $27,000
Reason for the Dispute: We have known the candidate for 10 years
Our Argument: You also know about 300 other sales reps in your industry, but how many of them do you know that are looking to make a change? Our client found the best talent before he left to work for another competitor.
Resolution: The debtor paid the full fee within two weeks.
Case Study Number Two
Small-Sized Electrical Company Backdoor Hired a Sales Rep
Fee Owed: $32,000
Reason for the Dispute: The candidate worked with our VP five years ago
Our Argument: The paper trail shows the candidate did not know about the job opening until after our client presented the opportunity in writing. The candidate then searched and found this former associate and called asking for them to put in a good word.
Resolution: The debtor’s attorney got involved and we went back and forth another 2 weeks. The case almost went to court, but the debtor offered to pay $25,000. Our client accepted and now uses the former client as a source.