When is a hire a hire?

I have a question for the sector.

We've been working on a contingency search for a client since May 10, 2010 for a director level position in a non degree college in California. We have sourced a number of good candidates and the owners [husband/wife team] have looked them over and interviewed most of them with feedback that we've sent them good fits. However, the last communiction we had on the search was that they wanted a few more candidates. Also, they go dark on us for periods of time.

I learned the week of the 9th that they have "brought a candidate on as a "consultant" and are letting him show them what he can do for the month". Needless to say, I sent an invoice to the client for a start for our fee, based on the hiring salary they indicated at the onset of the search.

By the way, we learned of this from the candidate and not the client. The last word from the client before this was that they had not decided and to send more candidates -- then they went dark.

Of course this billing received an immediate, negative response from the client indicateing that they did not hire the candidate and that he is/was a consultant and that they "may" hire him, but won't make that decision for about ten days to two weeks". Thus his position is that no hire was made and therefore no fee is due. I was also accused of being paranoid that we'll get our fee and not to worry, but they may not hire this candidate.

When the husband owner called me, he asked why I did not call him via phone instead of just sending an invoice. My reply was that we had been awaiting their feedback on other candidates and that we had not heard from them. Until, of course, we learned of the "non-hire" [my term]. By the way, he said that they are not paying the candidate anything, he's working for free, and that he may pay him "something" when the consulting period is over.

My position is that we sourced a number of good candiates and they liked them. They have in fact "hired" a candidate as a consultant and are getting the benefit of his labor to help their operation. It seems that the only party to this transaction not getting a benefit is our firm.

The client has accused us of being un-ethical, paranoid and insinuating our firm is not acting honestly, because they have not hired this candidate. They also indicated that "if they do hire" we'll get paid, but they will never do business with us again -- which is okay with me.

I need some guidance here. If I'm wrong I'll say I'm wrong, but it seems to me that we met our contractual obligation and should be compensated for it.

Could I get your reaction to this and some validation of whether we are right of wrong?

Thanks

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Replies to This Discussion

Permalink Reply by Sandra McCartt on August 19, 2010 at 12:48am

You are correct...sort of. It might have been more prudent to pick up the phone. Call your client and say something like.

"Mr. Jones, Clyde just checked in with me to let me know that he had joined you on a consulting basis so both of you could be sure this was going to be a long term fit." That's great news for all of us. He indicates that you are paying him x during the consulting period. Here is how we handle this kind of a temp or try it before you buy it situation. We will bill you 20% of whatever you pay him at the end of the first month he is on a consulting basis and every month thereafter that he is working for you on a consulting basis. If he goes perm with you we will bill you for the permanent placement fee that we discussed less what you have paid us while he was on a trial basis. If he doesn't go perm you will only owe us a % of what he was paid while he worked for you. Let me caution you about having someone work for nothing. I believe that he will have a claim for wages if he works there even a day or two but check with the work force office to be sure about that. I am delighted that we found someone you were interested in enough to give him a try. I will check in with you at the end of the week to see how he is doing."

"I am sorry that you feel we are paranoid and unethical but please remember that you agreed to contact us if you wanted to hire one of our candidates so perhaps if you had called me we would not have had this misunderstanding." "But the good thing is that it looks like we found someone that is worth trying so let's hope this goes well and you hire him on a perm basis" "Then we will all be pleased at a success."

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Permalink Reply by Jerry Albright on August 19, 2010 at 10:47am

My first concern was with your "client" description. A husband/wife team at a non degree college? What the heck is that?

They have already decided to do whatever they want here. You've been purposely kept in the dark.

Every sign I see is pretty obvious. They are not ethical and should be treated as such.

I'd lay odds you will not get a dime unless you take them to court. What kind of company/college/whatever brings someone in as a "consultant" without a clear understanding of what they will pay them and when.

These guys sound as shady as anything I've heard of in quite a while. You should have never started recruiting for them in the first place.

Did they sign an agreement? What does it say? If they didn't - you've got your work cut out for you.

Sorry.

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Permalink Reply by Thomas on August 19, 2010 at 11:05am

Jerry,

Thanks for your comments.

The enterprise is a private postsecondary school that is non-degree and has financial aid. It is for profit so the owners just happen to be a husband wife team.

We do have an agreement with a minimum fee, so I think we're protected -- sort of. They are adamant they have not hired, so no fee is due to us at all. They'll pay a fee, if they hire him. Our position is that whatever they want to call our candidate, he's a hire. Although they say they are not paying him. I asked outright, does that mean you're not paying him? The reply was yes, maybe I''ll pay something when he's done.

What I think is happening here is that they are using him for the month to help with a class start and once that is done, they'll kick him to the curb.

I did ask, what if you don't hire? The response was that they'll want us to send more candidates. That was before our second conversation when he accused us of being paraniod on getting our fee an dunethical, etc.

It was clear that they were "back dooring" us on the hire.

Where it stnds now is we'll need to see what they do with the candidate.

I apprecaite your thoughts on this.

Tom

Jerry Albright said:

My first concern was with your "client" description. A husband/wife team at a non degree college? What the heck is that?

They have already decided to do whatever they want here. You've been purposely kept in the dark.

Every sign I see is pretty obvious. They are not ethical and should be treated as such.

I'd lay odds you will not get a dime unless you take them to court. What kind of company/college/whatever brings someone in as a "consultant" without a clear understanding of what they will pay them and when.

These guys sound as shady as anything I've heard of in quite a while. You should have never started recruiting for them in the first place.

Did they sign an agreement? What does it say? If they didn't - you've got your work cut out for you.

Sorry.

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Permalink Reply by Thomas on August 19, 2010 at 11:16am

Sandra,

Thank you so much for your reaction to my situation.

I think that under normal circumstances I would have done much of what you suggest. However, the account rep/recruiter on the account could not get any feedback from them on candidates and all of a sudden we learn that the particular candidate is hired as a consultant. It appered that they were purposefully hiding the fact that they had hired our candiate.

We do a fair bit of temp to perm for professional positions, but that is worked out up front and is under a seperate agreement that deals with the hassle of that kind of search. Plus the fee structure is reflective of that kind of search.

The problem I have is the cleint is adamant that they have not hired him, are not paying him, may pay him "something" at the end of the month and thus no fee is due to us at all period -- unless they hire him. Then they'll know if they will hire him in the two week time frame I mentioined earlier. My "radar" tells me that they really are leading the candidate on to getthrough a rough patch this month and plan to cut him. I do hoep I'm wrong.

I'm sure I could have handled it better, but who would expect this from a client. You have to enter into a relationship trusting that the client is reputable and will deal with you honestely and in a forthright manner.

Again, thanks for your thoughts.

Tom

Jerry Albright said:

My first concern was with your "client" description. A husband/wife team at a non degree college? What the heck is that?

They have already decided to do whatever they want here. You've been purposely kept in the dark.

Every sign I see is pretty obvious. They are not ethical and should be treated as such.

I'd lay odds you will not get a dime unless you take them to court. What kind of company/college/whatever brings someone in as a "consultant" without a clear understanding of what they will pay them and when.

These guys sound as shady as anything I've heard of in quite a while. You should have never started recruiting for them in the first place.

Did they sign an agreement? What does it say? If they didn't - you've got your work cut out for you.

Sorry.

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Permalink Reply by Sandra McCartt on August 19, 2010 at 12:42pm

Wait them out. Stay in touch with the candidate..closely. If they cut him rebill them on your temp fee schedule for what he made if they cut him before your guarantee period for perm hire is up. When they call you to tell you that they didn't hire him and won't pay the fee if he has been there longer than your guarantee period tell them it's due because you had no agreement with them to place a consultant, he has been there longer than the guarantee period so they can either pay it or it's attorney time.

You may be a little paranoid because of the unethical way they brought him in but behind all paranoia is a lot of reasonable cause and effect. They just got caught so they are trying to make their lack of ethics yours. I would call all the other candidates that they interviewed to see if they had been contacted. If not give them a heads up to call you if this flakey client does contact them and ask them to come in on a trial basis. Maybe i am being paranoid :) but if you sent them multiple candidates they may have enough people in the cue to get them through about 6 months of free labor for no hire.

I would make it point of honor to get something out of them then tell them you don't work the way they do so you are delighted not to send them anyone else...Ever!

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Permalink Reply by Thomas on August 19, 2010 at 1:10pm

Sandra,

Thanks for this. It's all good counsel and I appreciate it.

We shall keep our eyes on this and see how we can resolve it to our satisfaction.

I guess this is how we pay for all the good experieice we gain in the business.

Regards,

Tom

Sandra McCartt said:

Wait them out. Stay in touch with the candidate..closely. If they cut him rebill them on your temp fee schedule for what he made if they cut him before your guarantee period for perm hire is up. When they call you to tell you that they didn't hire him and won't pay the fee if he has been there longer than your guarantee period tell them it's due because you had no agreement with them to place a consultant, he has been there longer than the guarantee period so they can either pay it or it's attorney time.

You may be a little paranoid because of the unethical way they brought him in but behind all paranoia is a lot of reasonable cause and effect. They just got caught so they are trying to make their lack of ethics yours. I would call all the other candidates that they interviewed to see if they had been contacted. If not give them a heads up to call you if this flakey client does contact them and ask them to come in on a trial basis. Maybe i am being paranoid :) but if you sent them multiple candidates they may have enough people in the cue to get them through about 6 months of free labor for no hire.

I would make it point of honor to get something out of them then tell them you don't work the way they do so you are delighted not to send them anyone else...Ever!

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Permalink Reply by C. B. Stalling!! on August 23, 2010 at 9:14am

Rewrite your agreement so it is covered for the next client. But this happened to me my first year in recruiting. The client was 3 mile from my office and I never met them before, my mistake. Once I went to their office and they had to deal with me face to face the whole thing changed and I did finially get paid my $10,000 fee. My client hired my candidate. Then told me the job had been filled. I found out 30 days later was filled with my candidate.

Have you or your recruiter met the client before?

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Permalink Reply by Thomas on August 25, 2010 at 1:11pm

C.B.,

Thanks for your thoughts on this. As a matter of fact, I have met the husband. Our offices are in Scottsdale and they are in LA. We met at a related industry conference earlier this year in Las Vegas. Seemed like a nice guy.

It is funny that most everyone I talk to about this, and I try to present the strory objectively, all pretty much have the same opinion of the client.

I do plan to re-write our agreements to ensure that a hire is in fact a hire. Although, it seems to me that someone working in an office [for pay or not] is still covered by our minimum fee.

I did hear from the client while I was on the road last week and will post that shortly.

Again, I appreciate your input on this.

Regards,

Tom

C. B. Stallings said:

Rewrite your agreement so it is covered for the next client. But this happened to me my first year in recruiting. The client was 3 mile from my office and I never met them before, my mistake. Once I went to their office and they had to deal with me face to face the whole thing changed and I did finially get paid my $10,000 fee. My client hired my candidate. Then told me the job had been filled. I found out 30 days later was filled with my candidate.

Have you or your recruiter met the client before?

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Permalink Reply by Thomas on August 25, 2010 at 1:14pm

Folks,

Here is what I received last week at 8 pm on THursday night from the client:

First Note [This was his understanding not mine]:

Tom,

I think we were clear on this at the conclusion of our last phone call, but wanted to clarify our position in writing for the avoidance of doubt.

We have not yet hired Candidate name. If we hire Candidate name, we will remit the required fee to you within 30 days of the date of his hire in accordance with the terms of the Contingency Search Recruiting Agreement we executed in May.

Sincerely,

Note 2 [Good riddance]:

Tom,

Also probably clear from our last call, but please consider this written notice that we would like to terminate our agreement with you. Please note our change of address effective June 14, 2010.

Sincerely,

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Permalink Reply by Sandra McCartt on August 25, 2010 at 1:24pm

However you respond to note 1, in response to note 2 i would make it very clear that you agree it has not been a cohesive working relationship due to their lack of communication concerning the candidate now working for them, but to be clear if they hire any of the candidates you have submitted to them (provide a list of all candidate names) within the next year, either on contract or permanent basis the full fee will be due the day they are on site performing any job duties for any position within the organization.