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Ask The Expert : Vendor Agreement – HR

Ask the Expert : By Mark Rowbottom


I need to set the situation for you. 2 years ago, a  great client implemented a Vendor Management program (VMP) for their recruiters. The HR department brought us and many other recruiters in – asked for pricing breaks in exchange for being one of a “limited” number of firms with access to work on their positions. The goal being twofold: To reduce expenses and get “control” of the agencies running amok with Managers. It became a bidding war, and the low price (poor quality) firms accepted lousy terms (19% – long guarantees, 60 net). We were offered to be one of these firms, but politely declined. We had placed many people there who had become managers, and stayed in contact with them – keeping everything positive. After the other firms failed to fill the hard positions – they would release them to us at 25%. Essentially giving us the jobs that had been picked over and anyone would now have access to fill, we again respectfully declined these “opportunities” and did not really work on it – but stayed in touch selling the retainer concept.

9 months later, we got an $8,500 check to initiate a retainer with exclusivity, 30%, 30 day replacement within the IT department. With no HR involvement as this was the IT department’s money. Unfortunately, the HR department and their VMP  had failed to fulfill the IT Managers critical hiring needs.

Now, we meet the client and gather all past candidates from Managers – revisited them all discreetly and found someone who had applied directly on-line that the Manager overlooked, for a poor reason. We meet the person and “sell” them to the client as a qualified, local candidate that we need to consider. The Manager agrees, and they love him!!!!

Now we are getting calls from the Managers asking if HR has called us, and they have – but I did not take their call.  HR is telling Management they already had the candidate because he had applied directly, and they do not want to pay the remaining fee. The Managers are calling us and don’t know what to do. HR has gone to the top VP in IT and has been making quite a stir.

How can we handle this one without alienating ourselves with the overworked HR person and keep servicing what we have turned around from a great Contingency client – to an even better retained client?


Answer: First of all, congratulations to you for doing the right thing and walking away from a bad agreement in tough economic times. You showed the courage, confidence and foresight of a strong company engaging in quality work. Remember, it is easy to be the cheapest, and takes conviction to be the best!

This is an awesome dilemma!!! What a great opportunity for you and your firm! How fortunate you are to have HR bringing you all of this attention – and they went right to the top!! Absolutely beautiful for you, I love it!

Okay, for starters, you have to look at what the problem is here. You need to understand why HR is doing and reacting the way they are. The expert will tell you here and now. Ready – you have proven that the Vendor Management Program HR created has failed. You also have shown that you are capable of forging an alliance within THEIR company, and providing time and money saving services. Remember, they get what they pay for!

Okay, now we know you may have alienated HR. However,  they created the mess with the low cost/low service program, and you respectfully declined to provide your services under the VMP. However, I am speaking amongst recruiters in this column, and can get quite blunt, be tender with your client – but be firm. Again, services levels amongst recruiting firms vary, and you are a proven quality supplier that was overlooked due to pricing issues.

Try this tactic: don’t take HR’s calls, let them run amok with the Managers for a week. Be reassuring to the Managers that there is NO ISSUE at all here, you are retained and we all will get the results we want – a quick fix to a year long opening AND a quality hire. I read the contract you sent –  The contract is in place – you are exclusive, terms are on the table, just focus on your service and be professional. You would not have been given this retainer if they did not trust you and have confidence in you so stay trustworthy and confident during HR’s little tornado, it is somewhat understandable that they are upset. On the other hand, they probably should have responded with enthusiasm, as you are taking away a painstaking opening and where the candidate came from is not really an issue. The client overlooked this person.

You knew they applied on-line, so what – sell it as an asset – they actually WANT to work at your clients firm. Hallelujah , start the on boarding process! Keep the manager aligned, remind them of why they hired your firm – you uncover things like this candidate for them. Say “this stuff happens all the time in retained!” This is how retained is now working for them. Defend HR (but don’t take their calls yet) Say “HR is to busy to discern the good from the great” they have Unions, Benefits, thousands applying for many jobs and payroll and parking, lawsuits. All we do is recruit for you, all day and all year. Reassure you will follow up with HR, but are way to busy with retained work to talk right now with HR about a sealed deal.

God I love this business – you should to.  Congrats on a great dilemma and good luck!

What’s your problem? I know you have one!

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