When it comes to finding the right person to fill a role, recruitment agencies can be a massive help by doing a lot of the hard work for you. Their knowledge of your business, the market and the skill you require can be invaluable in your search for the right candidates, however, it can be hard to keep track of who’s been referred to you, who referred them and when that referral took place.
A typical scenario
Delux Recruiters speculatively send Joe Bloggs Ltd an email with a CV for Ms White, together with their T&Cs, which state:
- Joe Bloggs Ltd are deemed to accept the T&Cs once a candidate has been introduced to them;
- sending Ms White’s CV to Joe Bloggs Ltd constitutes “an introduction”; and
- if Joe Bloggs Ltd engage Ms White within 6 months of the introduction they are required to pay Delux Recruitment a referral fee amounting to 10% of Ms White’s gross annual salary.
Joe Bloggs Ltd are not interested in recruiting anyone at that time and wouldn’t want to pay the referral fee. They ignore the email from Delux Recruiters and forget about it. Five months later Ms White applies directly for a maternity cover position and is subsequently engaged by Joe Bloggs Ltd, who Delux Recruiters then invoiced for a referral fee they don’t want to pay.
This scenario is common and can often leave employers owing referral fees to recruitment agencies in situations where they weren’t expecting to pay them and can damage a previously good relationship between a recruitment agency and potential employer.
How to handle your recruitment partners
Below are some suggestions for addressing of the common problems that arise between businesses and their recruitment partners.
“What do I do when I am sent unwanted CVs and T&Cs?”
Recruitment agencies often email CVs of potential candidates to recruiters (sometimes speculatively) together with copies of their T&Cs.
Often the T&Cs will say that a recruiter will be deemed to accept the T&Cs once a candidate has been introduced to them.
Often any CVs attached to the same email would constitute “an introduction” so in theory a recruiter may be taken to accept the T&Cs without even signing them.
- If you receive unwanted CVs and/or T&Cs from a recruitment agency email them back and say that you do accept referrals/introductions and the T&Cs are not agreed.
- If you are potentially interested in the candidate you should state that you don’t accept introductions/referrals without first agreeing T&Cs. You can then review the T&Cs and agree any amendments to them with the recruiter.
- The T&Cs accompanying the CVs may vary slightly or be updated over time so you shouldn’t assume they will simply be the same terms you have agreed previously. If you regularly use a particular agency, try to agree T&Cs with them to govern all referrals received from them.
“What if I receive introductions from several recruiters for the same candidate?”
If you engage someone who has been referred to you by a recruiter you will usually have to pay a referral fee.
However, if that person has already been referred to you by another recruiter then you may be liable to both agencies for a referral fee.
- Agencies T&Cs often say that you must inform them within a certain number of days if someone they refer to you has already been referred to you by someone else. Failure to do this may mean you are liable for the referral fee.
- You should keep a record of who has been referred to you and when they were referred. You can then keep tabs on whether a candidate has already been referred to you by another agency.
“What if I engage someone directly who I didn’t know had already been referred to me?”
You will usually still have to pay a referral fee, even if you didn’t know or forgot the candidate had been referred to you.
Referrals may be made directly to a team head or another employee and the recruitment team might be unware that a referral has been made.
- Ensure that any CVs and T&Cs which aren’t sent to the person/s responsible for recruitment are rejected. This will often need to be flagged to personnel.
- Keep a central record of CVs/referrals that have been made to you, when they were referred and when the relevant period for when payment of a referral fee expires.
The problems identified above are by no means an exhaustive list. Additionally, recruitment agencies T&Cs are likely to differ, so if employers are unsure of their legal position they should ensure that they take legal advice. The rules surrounding transfer fees for agency workers are different and are not covered in this note.