One of the beauties of contract staffing is the opportunity to earn a conversion fee on top of your hourly recruiter income if your client decides to hire the contractor direct. In order to get that conversion fee, you need to have a Conversion Fee Agreement in place from the start of the contract assignment. But how do you know when to include a Conversion Fee Agreement in the client contract?
It is a good idea to have one in place for every contract placement you make. Even if an assignment is not considered to be "temp-to-perm," there is always a chance that an offer of employment could be made somewhere down the road. Although you may think there is no chance of the client hiring a contractor direct, it's better to protect yourself in advance than to be unprepared later if the time comes. After all, you have nothing to lose by adding a Conversion Fee Agreement to your client contract, but you could lose thousands of dollars if you don't!
Establishing a Conversion Fee Agreement is as easy as adding language to your contract with the client company. We have free Conversion Fee Agreement samples available if you are uncertain what language to include in the contract. If you utilize a contract staffing back-office, they can do it for you. For instance, Top Echelon Contracting's Client Services Agreement (CSA) contains a standard non-compete clause that states the client cannot hire the contractor for a period of one year after the assignment has ended without the recruiter's approval. We can easily substitute your Conversion Fee Agreement in place of this non-compete clause to help ensure you will receive a conversion fee if the candidate is hired direct. Remember, a contract staffing back-office should not take any portion of your conversion fee. They are also not under any obligation to invoice for the conversion fee or to assist with its collection.
Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.
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