Bristol-based Menzies Law are reporting a 25% increase in disputes over recruitment fees in the last 12 months. Speaking on
Recruiter.co.uk, owner of Menzies Law, Luke Menzies identified two scenarios in particular where disputes are increasing.
Scenario 1 – Back Door Hires
So called Back Door Hires occur when a recruitment agency introduces a candidate to an organisation, who subsequently hire that candidate at a later date or for a different position. The agency can claim that, because they introduced the candidate in the initial instance, they are due a referral fee.
Scenario 2 – Fee Fight
Fee fights occur when there is a dispute between two or more agencies over who introduced a candidate to an organisation. This could happen when two or more agencies are supplying candidates for the same position. It could also happen when an agency introduce a candidate for a role, who is ultimately unsuccessful, but is then hired at a later stage for a different position after a second introduction from a second agency.
Of course, legal disputes can be expensive, stressful and time consuming. No organisation, irrespective of size wants to be drawn into these resource heavy disputes.
Is Technology the answer?
Fortunately, there are a number of ways that technology could be the preventative measure for avoiding legal disputes.
Vendor Portal
A Vendor Portal or Agency Portal helps in-house teams to stay in control of their PSL. Crucially, they can prevent agencies from submitting a candidate that has already been submitted for a vacancy. By avoiding this duplication it means agencies are crystal clear on who made the all-important first introduction.
Candidate Source Tracking
Recording the source of every candidate has several reporting benefits, one of which is source attribution. Making sure that your recruitment software is able to automatically attribute the candidate source helps to inform marketing spend and further solidifies agency attribution.
E-signatures
E-signatures and online document signing are a great way to agree legally binding terms with agencies on your PSL. E-signed documents are much faster than traditional documents and carry the same legal weighting. By putting fast, legally binding agreements in place with your PSL you can reduce disputes and increase compliance.
Commenting on the issue, Eploy CTO Chris Bogh said, ‘The issue of ‘first introduction’ has been around for some time, but as skilled candidates become more scarce, there is more likely to be crossover between agencies. We think some of the technologies that we’ve developed for the Eploy Recruitment Platform, such as our Vendor Portal and E-signatures go a long way toward alleviating this issue, leaving in-house recruitment teams to focus on recruiting top talent.’