In the turbulent world of tech recruitment, agencies may encounter underhanded tactics from clients seeking to circumvent fair compensation and contractual agreements. This article sheds light on eight common client frauds and equips IT recruitment entrepreneurs with essential precautions to counteract such deceit.
1. Not Paying The Bills
In different parts of the world, the reality of clients evading payment is a common menace. For a UK-based entity like Talando, the usual recourse might be to threaten legal action or share the unfavorable situation with potential candidates, or publicly to urge payment.
However, without a major local office to enforce these measures, the threat may not hold as much weight. Previously, the mere mention of our UK-based head office and a call from our legal department would often resolve payment issues swiftly. Yet, as a global entity, we have found that this isn’t always the case.
The reluctance to dive into disputes and the treatment received as a self-employed individual providing services were among the key reasons for joining a systemic and global company.
This scenario emphasizes the necessity for IT Recruitment Entrepreneurs to have a well-structured payment assurance system, ensuring that services rendered are duly compensated, irrespective of where the client is located.
2. Claiming A Candidate “Failed” The Probationary Period
In some instances, clients may claim that a candidate did not pass the probationary period and request the candidate to play along, while asking you to find a replacement for free. The only way to navigate such tricky waters is to build strong relationships with candidates so that such a scenario becomes improbable.
Staying in touch with those who supposedly failed the probationary period can provide insight; and if they continue to get paid by the client or start receiving payments again, then issue a new invoice to the client (if you provided the candidate). This added layer of communication can serve as a protective measure against fraudulent claims and ensure fair dealings.
3. Changing Requirements Midway or At The End
A very common situation that can only be prevented by a clause in the contract, either a fixed payment or a percentage of the minimum possible fee amount, which is paid in any case under such changes, which unfortunately, you couldn’t influence. It’s important to think through when exactly such a moment occurs and there’s a whole field for variations here.
We personally decided to take a penalty if we had provided candidates that we recommend as suitable for the vacancy before the requirements were changed.
4. Negotiating a Fixed Tiered Payment Structure Based on Candidate Experience Levels
The client hires a person for a higher position, claiming that your candidate is more junior and your fee, accordingly, is lower. There may also be a situation where a person is taken for another position (called differently) and a totally third amount is offered to you.
In such cases, it makes sense to describe in as much detail as possible who is considered a junior and who is a senior, and it’s easiest to tie it to the salary. If the candidate is paid a certain range, then it corresponds to a predetermined fee.
5. Non-payment Of The Amount Intended For Candidates Research
In this scenario, clients may withhold part of the payment meant for research, justifying this by claiming that the candidates provided were not up to par and thus, cannot be considered as shortlisted.
The core issue here revolves around what exactly is stipulated in the contract and what period is considered as completed work. It’s crucial to have a signed act of completed work, post which payment should be guaranteed.
Additionally, it’s noteworthy that if the client has conducted a certain number of interviews with the candidates you presented, then it corresponds to the obligations being fulfilled on your part.
Understanding the client’s reasoning behind withholding payment can provide insights on how to better structure the payment terms in the contract to prevent such occurrences in future engagements.
6. Working With Your Candidates After You’ve Terminated Cooperation
Unfortunately, this can mostly be foreseen or tracked by the candidate who shares the joy with you. However, it’s better to conduct an independent audit with an analyst or researcher from your team, who will check where exactly your candidates work, according to LinkedIn, or contact candidates before New Year or other holidays, and at the same time find out how things are and where the candidate is now.
7. Passing Stop-lists Developed With You To Other Agencies
This entails a very complex chain, and tracing it is an extremely challenging task. This action enables them to fill the vacancies using your candidates without compensating you for the groundwork.
A potential countermeasure to this deceitful practice could be abstaining from working with other companies on the same vacancies concurrently. Through such a measure, the likelihood of your client passing on valuable candidate information to competing agencies is significantly reduced.
8. “I Signed A Contract With You, But It Turns Out I Didn’t Have The Authority, Thanks For The Work, But My Director, CFO, etc., Don’t Confirm The Willingness To Pay.”
A very rare and strange situation, but it makes sense to be alerted if all communication is focused exclusively on the HR manager or any representative of the company who is not the COO, CEO, CFO. Especially if the contract was signed by the HR manager himself.
In this case, it is advisable to ask directly and in writing about whether he has such rights and just in case ask to communicate with someone from the management or at least inform that you have now started working with such an employee and signed a contract, will be glad to keep in touch with them (on LinkedIn for instance). Rarely for the tops, such news can be unexpected, and they will warn you themselves that they are not aware.
Conclusion
Unfortunately, the list can continue and, I am sure, you may share even more strange, intentional, and accidental situations when a client deliberately plays games in negotiations or invents ways to not pay and outsmart. However, if you have a well-thought-out contract, are an international company, and clearly understand and know your rights and obligations – the chance of such behavior are reduced.
Of course, personal relationships and how well you assessed all participants in the recruitment process and the one who decided whether to work with you or not are important in the first place.
Wishing you the prevention of uncomfortable situations and only pleasant, solvent, and fair clients!