Way back at the beginning of my recruitment career, in 1989 in London, I was drilled in the importance of verbally confirming with the client the terms of business, followed by a confirmation fax (these were the days before email).
If the client did not agree to the terms, then we did not do business with them. There were no ifs and buts; we either had an agreement or we didn't.
Fast forward 26 years and it pains me to see recruiters eagerly start work on a vacancy without any agreement about the terms of business.
The moment you invest any of your time on a vacancy without an agreement (verbal is binding but can be very difficult to prove and uphold so written is safest) you are asking for trouble. Your negotiating position weakens with every hour you invest in a vacancy when terms are not agreed, and the client knows that!
I am not a lawyer so the suggestions below are not intended to be any substitute for qualified advice on this topic:
Here's what all agreements in permanent recruitment should specify (as a minimum):
- The way your fee is calculated (eg % of candidate’s commencement remuneration)
- The point in the process at which your fee(s) is/are due (eg after a shortlist is presented, after the candidate has signed a letter of offer or started the job etc)
- The period of time for which the terms cover the introduction of a candidate (between 6 and 12 months is common)
- The coverage of the terms (eg specifying that referring any candidate to another organisation does not void the terms)
- Whether the fee is contingent (success-only) or otherwise
- A cancellation fee (if applicable) and the basis of the calculation for such a fee if a specific amount is listed in the terms
- The payment terms once the invoice is issued (14 days is common)
- The guarantee and its timeframe (eg replacement during first 3 months etc)
- Exceptions to the guarantee (eg redundancy etc)
- What action is deemed to be an acceptance of the terms (eg interviewing a candidate etc)
In the online world and the world of clients having their own databases, I would suggest a couple of additional clauses in your terms, something along the lines of this:
- These terms cover
all candidate introductions. There is no
exception for candidates who are on the client's database or connected through
any form of social and/or digital media (eg. LinkedIn, Twitter, Facebook, etc)
with the client and/or the client's employees, if those candidates have not
been spoken to by the client about the vacancy within 28 days of the vacancy
being registered with us.
- Candidates introduced by us can not be added to or included in the client's database of candidates until the candidate has been interviewed by the client. If the client wishes to add candidates who have been introduced to the client and who have not been interviewed, to the client's database, written permission is required from us. Failure to do so constitutes a breach of these Terms. A service fee is charged for this service. This service fee will be deducted from our placement fee should the candidate be hired within 12 months of introduction to the client by us.
We would love to be operating in a world where everybody could be trusted to ‘do the right thing' however one person's version of ‘doing the right thing' and another person's can vary significantly when things don't go to plan.
Protect yourself fully when your client agrees to your terms. Ensure they sign those terms. If they don't agree or refuse to sign the terms (same thing in my view) then stop wasting your time with that client and move on. If you don't, then hindsight almost always reveals the folly of your optimistic and imprudent decision.
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