Great Ways to Reduce Staffing Industry Risk

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Great Ways to Reduce Staffing Industry Risk
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• One thing stays constant in business and that is
  risk.
• This is especially true in the staffing and
  recruiting industry because of the number of
  problems the industry as a whole has to deal
  with. 
• But what exactly are the options available to you
  to minimize the risk involved when working in the
  staffing and recruiting industry?

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The Root Of Staffing Industry Risk

• Before we tackle the ways you can cover yourself
  and minimize the risk involved, we first have to
  take a look at the root of the problem. Staffing
  and recruiting industry risk stems from the fact
  that they offer a service where candidates are
  presented to clients and they are paid for the
  service. There are certainly times when the
  process goes smoothly, but more often than not,
  the staffing company will run into a problem
  called backdoor hiring.
• Backdoor hires happen when a client hires a
  candidate without notifying the staffing company.
  This causes them to lose out on the fees and
  practically work for free.

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What Can Be Done to Reduce Staffing Industry
Risk?

• There are a number of ways you can tackle the
  risk 
• involved in the staffing industry and backdoor
  recruitment processes. 
• Weve explained them below to help you be able to
  make the right decisions to reduce the chance
  that you have to deal with this problem and be
  able to quickly recover in case you do have to
  tackle it head on.

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Ensure That You Have a Signed Contract That
Covers You Legally

• There is nothing more important in the staffing
  industry than making sure that you have a
  contract. 
• A contract is a legally binding document that
  ensures that you are protected. However, it
  wouldnt do much if the provisions in the
  contract end up voiding you out of your own
  contract. 
• Yes, weve had a client that had a provision that
  voided them out of their own contract. Make sure
  that you constantly check your contracts and
  revise as necessary to avoid being in the same
  situation.
• You should also ensure that you have a written
  and signed contract. This is due to verbal
  contracts only being valid within twelve months
  of the interaction. They can also use the fact
  that there was no signed contract as a defence in
  court. This makes it easier for your client to
  avoid paying you your owed fee.

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Consider a Personal Guarantee

• One of the worst things that could happen to a
  company is to declare bankruptcy and close their
  doors. However, it is also a problem for every
  single company that they owe. If youre one of
  them then you might just be out of luck. However,
  a great way to make sure that a company pays you
  even if theyve declared bankruptcy is to have a
  personal guarantee signed.
• You may be wondering how a personal guarantee can
  help you collect. The main reason why a personal
  guarantee helps you collect on backdoor placement
  fees is because it ties liability to the
  individual running the business and not the
  company. This means that even if the company,
  which is its own entity, closes, the debt is
  still owed by the individual running it.

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Improve Relationships With Both Clients and
Candidates

• As a staffing and recruiting company, you have to
  understand that you are providing a service that
  will be paid at a later date. This opens up the
  possibility of you providing that service and
  your client simply running away with the fruits
  of your labor without paying you anything in
  return. This is why having good relations with
  both your clients and candidates.
• It takes both of them to agree to the hiring for
  it to turn into a backdoor hire. If your
  candidate trusts you more than the client, it
  will be rare for them to agree with the backdoor
  hiring proposition of the client because they
  have nothing to gain and everything to lose from
  it. The candidate may even warn you of the
  clients plan to backdoor hire them and you can
  stop a problem before it even happens.

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Have an Audit Trail To Follow

• A valuable tool for reducing staffing industry
  risk is to have a paper trail for each of your
  clients. This lets you track everything that you
  need to make sure that you can minimize your
  staffing industry risk while also making it
  easier for you to track any backdoor recruitment
  processes that might have gone unfound. You
  should ensure that the audit trail youre
  following has all the info that you need to
  create a solid case in case it comes to that
  point.
• This includes any agreements, both verbal and
  signed, information regarding the fees owed and
  the candidate himself.
• Weve had a case where the lawyer of the debtor
  defended the case by saying that the candidate
  that they hired wasnt the same person as the one
  that was presented to them several months back.
  The audit trail of our client proved it otherwise
  and the case was deflated in an instant.

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Use Technology To Your Advantage

• The staffing and recruiting industry, like many
  other industries, has evolved over the years. Not
  only are the styles that used to work in the past
  less effective, but they are slowly becoming
  outdated by todays standards. However, the great
  part about the progress of the industry is that
  there are many great tools that you can use to
  improve your odds of success and reduce the
  amount of staffing industry risk you have to deal
  with.
• An example is the online service provided by Back
  Door Hire Solutions that lets you credit
  check any company for free. This opens up a
  number of possibilities for you while also
  closing the door on the risk.

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Have a Team of Lawyers or Professional
Collections Company Available