Below is Allen’s latest collection tip for recruiters:
What the Client Says:
“We hired the candidate at a lower starting salary.”
How the Client Pays:
The victim of this is the salesperson placer. Since the candidate’s base rate is the only promised (“guaranteed”) compensation, the client argues that commissions aren’t included in the fee computation.
The variations are endless, ranging from actually paying the candidate less at the beginning (often with a wink and a promise) to excluding the value of perks (up to 40%). For this reason, vigilance plus verbiage is necessary.
Vigilance is your responsibility. Verbiage is mine. Here’s what I recommend:
“The estimated gross compensation includes projected commissions, bonuses, incentives, and perquisites. It shall be estimated at not less than the amount earned by the candidate in his last position.”
If that scares you, then start placing at a fixed fee.
Otherwise, you’re a visible victim.
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Allen, the world’s leading placement lawyer, has collected more placement fees, litigated more trade secret cases, and assisted more placement practitioners than anyone else. He’s also the author of 24 books and a regular columnist for The Fordyce Letter, one of the leading publications in the recruiting industry.
Know how to collect your well-earned placement fees? Test yourself! Visit Allen’s Placement Law website and click the “Placement Fee Collection Quiz” button. Allen can be reached via telephone at 310.559.6000 or via email at jeff@placementlaw.com.