Recruitment Agencies: Is there hidden revenue you could be chasing?

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We understand that due to the current COVID-19 situation, recruitment agencies who serve industries impacted by the pandemic are finding it extremely difficult. As an agency owner, you may have furloughed some or all of your staff and are currently trying to keep your business afloat during this time of uncertainty.

Although new business may be close to non-existent, there are other ways you can help your cash flow. With recruiters so focused on the placement aspect of their role, auditing their past candidates to see if they have ended up with the client they introduced them to is often forgotten about.

Unfortunately, even with the best of relationships with your client, back door hires do happen. This could be by accident due to another department within the business hiring your candidate, the client hiring your candidate at a later date for a different role or the unwillingness to pay your introduction fee. With any of these scenarios, you have the right to invoice your client for the introduction fee, however, we must stress that your introduction fee clause in your terms of business is clear.

So, if your workload has reduced or worst case has disappeared, why not use this time to investigate back door hires that might have happened without you knowing.

Take a look below at a back door hire case we were involved in and how we successfully collected the debt in full:

Debt: £6,000

Challenge: Our client provided permanent recruitment placements. They discovered that the debtor had taken on an employee and not advised our client. My Debt Recovery was instructed 5 months later.

Solution: The debtor initially denied liability and became hostile. On behalf of our client, we issued a Letter before Claim. A 6-week payment plan was agreed to recover the debt but payments were missed so we filed court papers. A Judgement was obtained and payments recommenced for the originally agreed term.

Result: Debt collected in full over 6 weeks, plus all costs and interest totalling £7,500.

If you have found cases of backdoor hiring within your agency, contact our team to see how we can help you recover revenue owed to you.

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