As the economy experiences downturns, companies often look for ways to cut costs. One of the areas that often gets targeted is the use of recruiters. To avoid paying recruiting fees, some companies may turn to "backdoor hires" through personal connections or other non-traditional means.
But even in tough times, there are steps that recruiters can take to stay ahead of the curve and continue to bring in business. As a team who has extensive experience working within the Rec2Rec space, The Doherty Group has a few key tips to share.
First, it's crucial to have a robust credit control system in place. This means keeping a close eye on the financial health of your clients and being proactive about collecting unpaid invoices. Having clear and detailed terms of business that outline the expectations and responsibilities of both parties is also a good idea.
Andy Hallett, Recruitment NED, and SThree Former Director, suggests that being close to your clients and candidates is the easiest way to stay in control of getting paid. If you are seen as a strategic long term partner by all sides and not just a transaction you are likely to move further up any payment queue.
But if this is not the case, our recommendation if you face legal issues such as fee disputes, internal employment contracts, or backdoor hires, is Barry Cullen (or how most of us know him as - Backdoor Barry). As a lawyer with a specialisation in serving the recruitment industry, he is well-equipped to assist in resolving these types of problems.
Another important step is to be aware of the legal implications of backdoor hires – are your terms of business protecting your placements? Recruiters should familiarize themselves with the laws and regulations that apply to the recruitment industry and take steps to ensure that they are operating within the bounds of the law. One great resource we recommend is The Contract Doctor.
Helen Phillips, Director of The Contract Doctor, brings over a decade of experience in the legal field to her role. The Contract Doctor provides start-up and SME recruitment companies with access to cost-effective legal and compliance guidance, thereby minimizing risk and promoting business growth.
Finally, recruiters can use BobCheck, a software that helps to prevent backdoor hires by tracking the way companies are sourcing and hiring employees. With BobCheck, recruiters can quickly identify when a company is using non-traditional means to bring on new employees and take steps to address the issue.
Overall, while economic downturns can present challenges for recruiters, there are steps that can be taken to mitigate the impact and continue to bring in business. By implementing a robust credit control system, having proper business terms, and being aware of the legal implications of backdoor hires, recruiters can stay on top of the situation and continue to find success in their industry.