How to deal with a client who refuses to pay the placement fees??

The candidate is offered a job and now the client comes back to me saying they wont pay as that resume was in their system - though they admit my candidate wasn't interviewed by anyone before and they were trying to schedule an interview for a different position. All the interview took place and I arranged for it and at last even had to convince the candidate about the salary... did everything and at last getting such a note of discrepancy!!!
FYI - This is a new client of mine and I don't have an agreement with them and the terms was as and when we make a placement they will send the agreement to me...
What should I do in this situation?? Looking forward to your valuable suggestions..

Views: 3787

Reply to This

Replies to This Discussion

looks like you are learning rule #1 the hard way...Never give them any candidates until you have the agreement. That is when you have the most negotiating power since they cant to see the resumes.

Sounds like they may have had no intention of paying you, so I am wondering how well you screened your client. You can try talking with them, they are clearly giving you the run-around, but you may loose a client. On the other hand it doesn't really sound like you had a client to begin with, so I would send a copy of my invoice to everyone up the chain of command and call the candidate. You should let them know the type of company they are going to work for.

Good luck. Sorry to hear you are learning so many valuable lessons the hard way.
Thanks for the reply...

Julia Stone said:
looks like you are learning rule #1 the hard way...Never give them any candidates until you have the agreement. That is when you have the most negotiating power since they cant to see the resumes.

Sounds like they may have had no intention of paying you, so I am wondering how well you screened your client. You can try talking with them, they are clearly giving you the run-around, but you may loose a client. On the other hand it doesn't really sound like you had a client to begin with, so I would send a copy of my invoice to everyone up the chain of command and call the candidate. You should let them know the type of company they are going to work for.

Good luck. Sorry to hear you are learning so many valuable lessons the hard way.
Has the candidate accepted the offer?
Do you have this condition in your email record????

"I don't have an agreement with them and the terms was as and when we make a placement they will send the agreement to me."

I agree with Julia, you cannot under any circumstance act on good faith .... it needs to be in writing to avoid this dilemma which can be costly for all involved not to mention crushed hopes, God Forbid.

So again, - Do you have this condition, "when we make a placement they will send the agreement to me" in your email record????
PS This is one more reason why everyone should have a blog .... if they don't pay up I would name names, titles, company and location ... the whole detailed story here on RBC and let them know in advance that in 21st century there is such a thing as bad publicity. They are not an employer of choice nor should be allowed to market themselves as such with such dishonorable practices.

Moreover if they do not honor their word and pay up in 30 days of stat date ... let them be apprised of the fact they you will immediately start hiring their employees for there competitors. An old and very smart friend told me this strategy. It works both ways.
Slouch said:
Has the candidate accepted the offer?

Not yet... Because of the holiday season the candidate will be getting the hard copy offer letter only after Jan 5th, however he accepted the offer verbally and is now waiting for the offer letter in hand.
Dave Mendoza said:
Do you have this condition in your email record????

"I don't have an agreement with them and the terms was as and when we make a placement they will send the agreement to me."

I agree with Julia, you cannot under any circumstance act on good faith .... it needs to be in writing to avoid this dilemma which can be costly for all involved not to mention crushed hopes, God Forbid.

So again, - Do you have this condition, "when we make a placement they will send the agreement to me" in your email record????

Yes.. a similar sort of email is there wherein we did fix up the fees for any placement.

What really happened is I was am dealing with the hiring manager who is still working on this case.. and he is fine with the candidate and to pay the fees for this placement.. he is the main guy responsible for taking care of the interview and even who gave the offer... Now.. one candidate's friend who works with this client is acting weird by telling them that the candidate is his friend and he was trying to schedule an interview with these guys already and "no need to pay third parties for this guy" and this has gone to the top management... and this is what's creating the issue..

Before going ahead with this candidate, candidate did mention to me that he has given his resume to his friend earlier but no interviews took place and also no follow ups at all.. and I contacted him for another position - not the same position and he wanted me to go ahead with the submission. Before submitting I did enquire with the hiring manager if he has gone through this resume before and he did say no and I can very well sent the candidate to him for review.

The core point here is - until now no interviews took place through anyone else other than me for this candidate with this client and the hiring manager knows that I even had to convince the candidate about accpeting this offer in terms of salary.... everything's done now from my part!!!!
Hello J.nibu. I'm one of the "tough love" crowd here.........and sorry - but it looks like you're going to lose on this one. You ignored one of the primary red flags in our business when they refused to sign an agreement. From the very beginning they were saying "we are going to screw you" and you ignored the message.

Did you send them an agreement and they did not want to sign it - or do you expect your "clients" to send an agreement for you to sign? Though I guess that doesn't really matter. Is this another agency?

Either way - your best bet in my opinion is to send them an invoice and include all communication between them and you regarding the entire interview process. Unfortuntately we just don't have near enough detail on this to give helpful input.

Consider the fee you won't be getting here as an investment in your own education.

Keep your spirits up and move on.
If the candidate hasn't accepted the offer, tell him all about it. Tell him what kind of employer he is signing on with. You probably owe him that much and you probably will loose the client either way. If they treat you this way, they won't have a huge regard for their internal talent either. I might consider moving them from the client column to the target column.

J.nibu said:
Slouch said:
Has the candidate accepted the offer?

Not yet... Because of the holiday season the candidate will be getting the hard copy offer letter only after Jan 5th, however he accepted the offer verbally and is now waiting for the offer letter in hand.
Unfortunately, this is one of the biggest problems on the contingent fee side. I have heard countless stories.

Without a letter of engagement or contract, you are on very soft ground. Now, if you had a signed agreement, there is established court precedent. Hopwever, there are clients who will still play the game of "we had that name already," your agreement notwithstanding. In that instance, courts will typically side with the recruiter if you can show that had it not been for your efforts, the employer would not have hired the candidate for that position.

In this case, you can argue that you had a verbal agreement -- a verbal contract -- and you honored your agreement. You can push them and probably get paid some amount of money. You can probably even talk to their corporate compliance department or service, assuming they have one. However, lesson two is to be very careful with HR executives. Far too many are less than ethical on these matters and hell hath no fury than an HR executive who is forced into a payment. They DO talk at their little meetings... And you can kiss that client goodbye. That is why I prefer retained search.
Hi J.nibu,
Sorry to hear about the situation you are in. I agree with what has been said so far. I agree that you should touch base with your candidate on this situation but before doing so, inform the client, in a non-threatening way (if you both have not gotten to a hostile place yet with this issue) that you will be informing this candidate of the current situation and that could cost them a hire. They know they are pulling one over on you since they never knew about this candidate's resume being submitted beforehand by an internal employee. They have spent time, as well as you have, in qualifying this candidate and moving on an offer. They are not going to want to lose that. If they care about hiring this person, they will have a reaction to you having to inform your client(candidate) of this situation. It is the professional thing to do as you are working on their behalf to secure them a position with a good company. The client will at least realize then that you will not go away quietly by letting them steal your candidate.

Best of luck, do let us know the outcome.

Karina Manriquez
Recruiting Specialist
Resourceful Recruiting
T: 617-297-2232
karina@resourcefulrecruiting.com
www.resourcefulrecruiting.com
For some reason I want to disagree with the general concensus here on getting the candidate involved.

This is between you and the company. (I refrain from using the world "client" so loosely in these situations.) Threatening them with turning them into a source company, badmouthing them, etc. is not going to get them to turn their ship around. There is no value (other than making yourself feel better for the moment) to any of that.

Informing the candidate will do nothing for your fee situation. The company will most certainly convince the candidate you are somehow at fault - and that will add no value. You will only look like a sore loser.

Very simply put - you have no leverage here. You've already provided the services. The candidate has accepted.

Send the invoice including all documentation. Follow up with them letting them know you expect to be paid. When/if they do not pay turn it over to a collections attorney who will work on contingency.

Take the high ground. Take the hit. Move on. (After sending the invoice.......)

Reply to Discussion

RSS

Subscribe

All the recruiting news you see here, delivered straight to your inbox.

Just enter your e-mail address below

Webinar

RecruitingBlogs on Twitter

© 2022   All Rights Reserved   Powered by

Badges  |  Report an Issue  |  Privacy Policy  |  Terms of Service