Recruitment sector expertise
Sterling is the only debt collection agency with experienced agents dedicated solely to collecting recruitment debt. Our agents have a thorough understanding of the sector’s terms of business (whether they be based on APSCo, REC, Lawspeed terms or similar), how the market operates, and the usual disputes and excuses that arise. This helps us to explain the legal standpoint to the debtor including their contractual responsibilities and the consequences of litigation. We can persuade the debtor that it is in their best interest to resolve the matter with Sterling rather than progress to court action. In most cases this leads to full payment without the need for legal action meaning that our client gets paid quickly and cost effectively.
Disputed debts and back door cases
In other sectors most debts are simple late payments. In the recruitment sector however, invoices are often disputed. Sterling is particularly successful in collecting back door hire cases and disputed debts, including for example:
- Temp to perm fees.
- The debtor engages the candidate for a position other than the one the CV was intended for.
- The candidate leaves within the rebate period, but the debtor has breached the terms of business (usually by non-payment) negating their right to the rebate/replacement candidate.
- The debtor employs the candidate via another agency after our client has sent in the candidate’s CV.
- The candidate contracts with the debtor as a sole trader or via a 3rdparty.
- The debtor has used a separate business to hire the candidate.
- Back door hire cases.
You can find final demand letter templates and useful advice on how to resolve disputes and protect yourself from bad debts on our Tools for Recruiters page.
Back Door Hire Placements
A growing issue for the recruitment sector is that of missed fees due to back door hire placements. Sterling has developed HireChecker, our back door hire discovery service. HireChecker allows agencies to monitor and track down back door hire placements quickly and cost effectively on a ‘fee per find’ basis.
Once Sterling has found your back door cases you are free to bring them to your customer’s attention and invoice for them or come to another arrangement. Sometimes, particularly with larger customers, the back door case can be a genuine oversight on behalf of the customer, often due to poor process or record keeping. For example, the candidate may have been referred by a 2nd agency and hired in another role.
If the customer refuses to pay for the engagement and you wish to pursue the debt, then Sterling can collect in our Debt Recovery service on a commission only basis.
See more about finding, preventing, and collecting back door hire placements here.
Legal advice and debt litigation
Where legal action is necessary to collect a debt Sterling will contact our client to discuss the merits and risks of such action and will only advise our client to act if a positive cash outcome can be achieved. Our solicitor* has extensive experience in litigating on recruitment sector terms of business and therefore can analyse and put together a strong case efficiently. The strength of our submissions means most cases are settled without going to court.
Weaknesses in sales process or terms of business can create loopholes, allowing disreputable customers to avoid payment. Sterling can assist with a review of your terms of business, to tighten up your agreements to put you in best standing to achieve full payment, and by providing advice on process to ensure that your terms are incorporated correctly.
See more about our legal services for recruitment agencies here.
*Sterling Debt Recovery uses an independent 3rd party solicitor.
