There have been some stirring debates around a Globe and Mail article where I was quoted recently. A mother wrote to the newspaper’s Nine to Five section, about a recruiter potentially sabotaging her son’s job search. As expected, one of the debates centered around why the mother was writing in about her son’s dilemma (a question that came to my mind too). But much of the ado was generated due to some confusion on how recruitment agencies work.

So let’s go through some of the questions that arose from the article:

Q: How does payment to a recruiter work if a job candidate is searching for jobs with several recruiters?

A: The short answer is: an employer does not have to pay a recruitment fee to several recruiters with whom a job candidate is working. An employer would only pay a fee to a recruiter if he or she has a signed contract with the placement agency, and if the employer hires a candidate that the recruiter put forth.

Here’s the most important takeaway: Employers hire recruiters to find job candidates because they do not have the expertise or time to sift through hundreds of jobseeker profiles to find their perfect match. A recruiter’s biggest asset is his or her ability to cut through the clutter, to “read” an employer’s needs and seek out workers who have the perfect skill set and social fit. Moreover, recruiters can also approach both unemployed candidates and people who are currently employed – to gage their interest in an open position. Therefore recruiters can identify the best candidates in the marketplace – even if someone is not actively job-hunting.

Hiring the wrong person for a job can cost the company a lot in lost productivity, sales, operational efficiency, and lost time in training, and re-hiring costs. A recruiter’s experience fast tracks the time it takes to hire, and minimizes the risk of hiring the wrong person for a company.

Q: Can a recruiter demand a fee for a candidate after the fact – once an employer has met a candidate, likes him or her, and is ready to make a job offer?

A: Yes, if a company accepts a resume without having a signed agreement, meets with the candidate, and then decides to hire the incumbent, even without having a signed agreement, it’s implied that they are accepting the agency’s terms and conditions. However, it is highly recommended that both parties – the company and the agency – have terms and conditions in writing to avoid any confusion or misunderstandings. Ethical agencies will be up front about their fees and will have a signed agreement in place before they forward any resumes to potential employers.

Q: Does a recruiter fee apply if a candidate applies directly to an employer?

A: No, a recruitment fee does not apply if a candidate applies directly to an employer without any involvement from the recruiter with whom you have a signed agreement.

Many candidates will work with several recruitment firms to increase their chances of getting noticed by potential employers. At the same time, they are absolutely free to directly apply for open positions they find on their own.

Candidates usually sign agreements with recruitment firms confirming they will not directly approach employers to whom they’ve been introduced by a recruiter – for a specified period of time. As long as a hiring transaction doesn’t take place directly between an employer and the candidate during that specified time, no recruitment fee is due.

Q: Can the recruitment fee be deducted from a candidate’s pay so it doesn’t impact a company’s bottom line?

A: No. It is against the law in Ontario for recruiters to charge job seekers to find work for them. As a recruiter, my relationship is with my clients – companies who need help in the hiring process, who hire me to find the right talent for them. My loyalties lie with my clients and their hiring needs first and foremost.

Q: What if a company comes across a potential candidate directly (e.g. via LinkedIn), and is also given that same person’s profile through a recruiter – who “owns” that candidate? Is the employer obligated to pay the recruiter a fee to hire this person?

A: Though the chances of this happening are low, reputable recruiters will address this scenario in their service agreement with you – so there’s no room for confusion.

At BlueSky Personnel Solutions, we abide by the “time stamp” principle – the party who can prove they connected with the candidate first would “own” the relationship and the introduction. If a company connected with the candidate directly first and wanted to hire him or her, no recruitment fee would be required. If the agency outreached to them first and made a subsequent introduction, then they have fulfilled their obligation in their service agreement and would charge a recruitment fee.

Do you have a pressing hiring question you’d like to have answered? Email me and it could be featured on our next blog post!