Kearney • Boyle & Associates, Inc.

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WHEN TWO RECRUITERS SEND THE SAME CANDIDATE

One of the frequent problems hiring managers have is determining who should get paid when two recruiters send the same candidate for a job opening. In the May 2004 publication of The Fordyce Letter, this issue is addressed on page 4:
 

Another Recruiter Previously Sent the Resume

"This assumes that a fee will be paid - to someone - just not to you. It is known as a Candidate Source Recognition or Candidate Ownership problem and may be the cause of more heartache than any other employer pretext. It is also the excuse that causes employers to, perhaps, be liable for the payment of two fees. Much depends upon the written agreements involved.

Many years ago there existed an organization called the Professional Employment Research Council. It was formed as a liaison between HR types and TPR's in an attempt to educate employers on how to work with our industry…one good thing did come out of their efforts was the verbiage regarding who should get paid when duplicate referrals are made. Their solution (which they tried to teach to employers) was to insert the following into all written communications with recruiters:

'In case of more than one referral, the source whose referral caused the action leading to the eventual hire will take precedence. No fee will be paid unless the hire was the direct result of interest initiated and stimulated by the agency.'

This 'stimulation of interest' policy elicited some positive action on the part of many firms. Its use was encouraged with the following attempt at enlightenment:

'Any employer who puts that simple phrase into an agreement will eliminate 90% of all the agency fee disputes that they might ever have so long as they require everyone to sign the agreement. They will also eliminate any requirement for logging in or date stamping resumes which can substantially reduce record keeping expense. Most fee disputes result because one resume (or phone call) got there first, but another (duplicate from another source) actually stimulated interest and resulted in the hire. Case law and arbitration history clearly favor the 'stimulation of interest' method as more equitable than 'resume logging.' In other words, the one that stimulated interest usually wins in court so why not make that company policy.

Resume logging or 'first contact' as a policy actually invites fee disputes when situations like the following occur: Recruiter A sends in a resume in July when no opening exists. Recruiter B sends in the same resume in October when an opening does exist. Both claim a fee. Recruiter A sends in a resume in July and there is no interest. That same applicant initiates direct contact via an advertisement in October. Recruiter A claims a fee.

Recruiter A, knowing of the 'first contact' policy, rushes in a poorly prepared resume taken over the phone in order to beat out Recruiter B. Recruiter B interviews the applicant and significantly improves the resume, sending it in a few days later. The second resume stimulates interest. Both recruiters claim a fee.

Recruiter A sends in a resume which is logged in and routed to Engineering Manager #1 who puts it in his bottom drawer or his waste basket. Recruiter B sends in a resume several weeks later which is routed to Engineering Manager #2 who calls Recruiter B with some questions about the candidate and then subsequently hires him. Both recruiters claim a fee.

Note that none of these problems occur when the phrase quoted above is worked into the agreement. Most experienced recruiters actually prefer the stimulation of interest approach because they've all had problems with resume logging and most consider stimulation of interest the only fair way."