A major problem that every staffing and recruiting company faces each day is the threat of backdoor hires. We call this the billion dollar problem because of how many staffing and recruiting companies lose a substantial amount of money because of it. The worst part is that not all staffing and recruiting companies are capable of taking this problem on their own.
Table of Contents
What You Can Do To Protect Your Business From Backdoor Hires
This billion dollar problem is a difficult matter to handle. This is especially true since the debtors that would rather backdoor hire your candidate rather than pay your fees will have a number of excuses that they will be using. From knowing the candidate beforehand to hiring the candidate as a consultant rather than a full employee are just some of the popular excuses. Despite this however, there are a number of ways you can ensure that you can get your rightfully owed fees which we will be discussing below.
Have a Signed Contract, Personal Guarantee Or Both
It cannot be stressed how important it is to make sure that you have a signed contract when you’re selling services to a client. This is a written guarantee that your client owes you for the services you gave them. A personal guarantee is also a good idea as it safeguards your transaction from your client declaring bankruptcy.
The company is the one that shoulders the weight of a transaction and not any singular person. However, with a personal guarantee you can tie the transaction to the person.This lets you get your owed fees regardless of the state of their company.
Ensure That Your Contract is Consistent
It is important to make sure that all of the information on your contract is consistent. A clause in your contract could protect. There have been cases where our clients have voided themselves out of their own contracts due to inconsistent wording. This made it much harder to collect the debt that their client owed. So make sure you go over the contracts you’re handing out to make it easier for you to get your rightfully owed fees.
Have a Possessory Period
Another tool in the arsenal of every staffing and recruiting company is the presence of a possessory period in their contracts. A possessory period holds your clients liable to pay your services or product fees regardless of the circumstances surrounding the transaction. This includes the common excuse of hiring the candidate through another staffing and recruiting company.
If Your Debtor Continues to Make Excuses, Stay Silent and Get A Third Party To Help
One thing that should always be done when dealing with companies that continue to make excuses is to stay silent and let a third party like a lawyer or professional collections company you’ve hired interact with them. This is because of how everything you say or do from that point on will be used by your debtor’s lawyers to try and get your debtor out of paying your fee. You cannot imagine how many times we’ve seen someone say something that ruined their case and gave the debtor an opening to get out of paying their fee. So stay silent and let someone who knows how to handle it do the talking.