Insight on Three (3) Changes in Collecting Staffing and Recruiting Debts Over the Decades
Over the last 20 years I have seen a lot of changes when it comes to collecting staffing and recruiting debts. A lot of things have remained the same, and our clients are still making the same mistakes. There are systemic changes in the industry when it comes to collecting past due placement fees and temp staffing. The thing that I find most odd is that changes have very little to do with the economic ability for the debtor to pay. So I want to take a moment and share my insight on three changes that I have noticed over the decades, and a few of the changes are very current changes.
Back-Door Hires and conversion fees
This is the newest and in my opinion the fast growing change in the industry. We have seen a 295% increase in back-door hires over the last 18 months and the sad news is these figures are increasing every quarter. This has been the biggest increase to our collection fees this year. The amount of money that recruiters and staffing firms are leaving on the table is mind blowing. The thing that surprises me the most is our clients tell me, “ Yes that happened to me last year,and well, they said they got the candidate from another source so I figured what could I do? So I dropped the issue.” Dear God, why would you walk away from a fee that is owed to you by a client that is either too incompetent to keep track of candidate or a thief ?
This change I think is something that has always goes on, I do not think the change is that it happens more than it used to. I think the change is, technology has not gotten to the point that you catch it more often. The Industry numbers that I read last month said that 3% of your candidate that you present are going to be back-door hires. Think about that! You present 100 candidates or Temps and 3 of them will get hired and you are not paid a fee.So my advice is this, track your candidates! There are a few services out there that do a pretty good job. If you need more information just send me an email to wilson@aercollections.com and I will put you in contact with a company that provides that service.
Judges do not undervalue your services
Yep, image that. There are some people out there that say "Really you want 25% , 20% for a direct hire or conversion fee? That seems excessive. What did you really do, you just supplied a couple of resume?" I am sure you have heard it all before. The issue now is we are hearing that more and more from the courts. So what do you do? You make sure that you get an agreement signed. 
Yes , signed. This turns the tables on the court, they now are enforcing a contract vs. a verbal agreement that two people discussed on the phone. I have a lot of clients tell me “ I emailed the agreement to them and they did not sign it.” Please get your agreements signed. With out a signed agreement, can we collect? Yes, we can, but it makes it much tougher and if the accounts goes to suit then we run the risk of a judge telling our client that he just does need the value for what you are wanting to charge.
The debtors attorneys are getting smarter about local laws in regards to staffing and recruiting
For example: In the state of Massachusetts their Supreme Court ruled more than a decade ago that you have to have a signed agreement or its not a deal. Guess what , the attorneys are now getting wind of this change. In the State of New Jersey you have to be licensed by the state to be a recruiter or provide staffing, or you cannot use their court system. 
That comes from a law formed back in the late 1970's, but guess what? The attorneys are using that more often. So the rule of thumb is get a signed contract and if you are going to deal in NJ then get Licensed as well.So what do I predict that we will see over he next 20 years? The fact is I see big opportunity for the Staffing and Recruiting Industry. I see a growth opportunity for our clients like they have never seen before. But I think you have to manage the process better on the front side than you have in the past. The fact is with all the changes that I have seen over the last 20 years the good news is the defense for all of these change are really the same as they have always been, that first line of defenses are:
- Know who you are dealing with and how they pay their vendors.
- Get a signed agreement .
- Keep track of who you send out on interviews.
It really is that simple. If you should need for any of your collections issues then call me at 800-452-5287 Ext 6578 or Email me at wilson@aercollections.com.
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