Sleepers, the Dormant Candidate

May 1, 2005

With growing frequency, companies are telling recruiters that they will not honor our referrals because “they already exist in our account (or some similar job board).” With millions of often worthless resumes residing on Monster, HotJobs and CareerBuilder, it’s a bit like saying, “We found that candidate’s name in the phone book after you made us aware of them and, even though we haven’t communicated with them, we might have found them anyway and are denying your referral.”

From an HR point of view, this makes perfect sense. Why pay a fee for someone who is in their database (or wherever else they warehouse this stuff) even though they were totally neglected or abandoned by HR until a recruiter tapped them on the shoulder with a valid referral reminder? Brian Walker of The Wise Group said it succinctly when he wrote, “ I am not the client’s tickler file.” Even if they aren’t in their database, almost anyone’s background can be found somewhere. Weighing the alternatives between paying a fee or telling a recruiter to get lost once they know about a dormant candidate’s renewed interest, which alternative do you think they’ll choose?

I seem to regularly beat up on the HR community. That’s probably because I was there once upon a time. Been there, done that! And, fully half the calls I receive revolve around some problem or ethical lapse on the part of some HR person. All this talk about being a strategic partner with top management may be true in some very large companies but, by and large, it is a load of hooey, promulgated by HR folks during their conventions to mutually convince one another how important they think they are to their respective employers. Dr. John Sullivan, HR guru extraordinaire recently wrote: “As a result of their efforts, most HR professionals are no longer confined to the personnel office; many organizations now reserve a seat at the boardroom table for the senior-most practitioner. But in reality, has the modern-day practitioner truly evolved? Study after study points to the conclusion that, while HR professionals can now talk a decent game, they make no attempt to actually play it.”

While some of them are quite essential in areas such as insurance, pension administration, government regulation oversight and other benefit programs, there are just as many whose bureaucratic duties include such minutia as selecting the color of the guard force uniforms, assigning parking spaces or deciding how many peas should be put on a tray in the company cafeteria.

But, alas, the most vital function on which they should be focusing is talent acquisition . . . and that’s an area where they fail miserably. There are so few outstanding ‘internal recruiters’ they could hold their conventions in a phone booth. Too often, the job is given to HR rookies or to ‘good old Ralph’ as somewhere to spend his last few years before retiring. Some companies have even thought about moving the recruiting function into the sales/marketing departments instead of maintaining it in the stultifying officialdom of HR’s domain. Propinquity to a bureaucratic HR department is frequently deleterious to the goal.

Or, as so many have done, hire someone from our industry … usually people who couldn’t make it in private search or recruiting. They talk a great game but rarely walk the walk. Their greatest skill seems to be putting up roadblocks or speed bumps to deter (or outright block) their former colleagues from dealing with their firms’ ability to attract the ‘A’ players that cause a company to grow.

I have nothing inherently against the job boards. Every company has grunt jobs where all that is needed is a steady chair warmer. The job boards are fine for these interchangeable clones. These are not the people we are paid to find. We are paid to nominate candidates who are prepped and persuaded to say yes under the right conditions. If they happen to also reside in a company’s database from some long past communication or mass Internet harvesting effort, but had not been identified by a neglectful, under-skilled or overworked HR recruiter, a fee should be paid. Unfortunately, that would just confirm the fact that an HR recruiter dropped the ball so they’ll find any way they can to come out on top and save face (and a fee).

Oh sure, there are some ethical recruiters out there. I never realized how few there were until I asked our readers about some of their experiences. It doesn’t take a brain surgeon to realize that hiring managers evaluate potential candidates far differently than some HR functionary. The hiring manager should be the very first contact. Unfortunately, for most firms, it is the last. HR has deemed their appraisal skills to trump those of the person with the pain-producing open job. I could fill a book with some of the stupid reasons HR has passed on a ‘perfect’ candidate without sending them on to the hiring manager.

They have attempted to codify their dominance in the process through increasingly restrictive contracts and, unfortunately, some practitioners even sign them. That, of course, has been mainly a result of a slow economy. Things have changed. HR hasn’t yet caught up with the fact that they are once again headed towards the bottom of the corporate pecking order.

We surveyed several hundred of our readers recently. Here’s what we asked them

One of the growing problems reported by readers is that of dormant candidates. These are jobseekers whose resumes reside in a client’s (or potential client’s) database because they have previously answered ads, responded to a job board posting, been referred by another recruiter, etc. Sometimes, they have already been interviewed and rejected. In most cases, they have been long forgotten as candidates for current openings, normally because of neglect on the part of the HR department, until you refer them for a current position. Then, often after they decide to make an offer to your candidate, they ‘discover’ that they already had the candidate in their files and refuse to pay your fee. Some companies even go so far as to disallow your referrals (and your fees) if they happen to find them afterwards on Monster, HotJobs or other similar cyberspace sources, saying. “We would have found them anyway.”

Our questions for you are:

Has this ever happened to you? (Details please)

How did you resolve it?

Does your contract or agreement cover this possibility?

I was astounded at the response levels. We are publishing as many of the responses as we can because they should act as a large blinking ‘Caution’ sign in your dealings with clients and potentials. Although less than 5% of the respondents said it had never happened to them, the majority of the comments are instructive as a prophesy of things to come.

Sometimes you have to take the good with the bad, the glad with the sad and the happy with the crappy. The remarks of our readers (at the end of this issue) demonstrate this far better than I could.

The topic of dormant candidates was covered in A. Bernard Frechtman’s ( new book “Staffing Industry Law” as follows:

“There is also the problem where, after the referral and the interview, the company discovers the candidate’s resume in its own files and thereby claims it does not owe the recruiter a fee. There the ‘But For’ rule can clearly decide the question. ‘But For’ the recruiter having sent the candidate to the employer, the employer would not have interviewed the applicant. The question of whether the employer eventually would have interviewed the candidate on its own is pure conjecture which the law disregards. The fact is that the employer interviewed the candidate as a result of the recruiter’s referral and not because the candidate’s resume was in its file. The fact that the resume was lost or discovered on the employer’s desk after the appointment was made is of no effect.”

Nevertheless, the legalities of enforcing payment in these situations depends upon a very few necessary components. In a nutshell, they are:

— A signed agreement While some practitioners still operate under a verbal ‘gentlemen’s agreement’ in their dealings with clients, this can be very dangerous to your financial well being. In Massachusetts, for example, if you don’t spell your agreement out in writing, you can forget collecting a fee – righteous or not. While it may feel heartwarming to have some clients where your relationship does not seem to require a signed agreement, it is impractical to assume that a situation may not change (your buddy leaves the company, policies change, etc.)

A time certain on referral protection Although many practitioners do not specify any time limit on candidate ownership, it is unrealistic to assume a judge will protect your referral forever. As attorney Jeff Allen pointed out in our 11/02 issue and revisits in this issue, a distinct and confirmed time limit is really the only bulletproof way to win.

— Causation If you can directly connect the dots between your referral and the hire, a fee will be due. But this roadmap from Point A (the referral) to Point Z (the hire) can be littered with detours, roadblocks and an unlimited number of intervening events which can send your voyage into the ravine.

While these are the simple components to successfully collecting a fee, the key proposition with all of them is ‘proof.’ Truth and proof can lie at opposite ends of the dispute spectrum. Documentation is the key. Remember, in most cases, this is a David and Goliath scenario you against a large company with a legal staff just itching to fight you every step of the way.

I invented the Authorization to Refer form which I recommend having every candidate sign or acknowledge. Many practitioners have used it to their advantage and a version of it appears in the reader remarks in the back of this issue. If the candidate, in writing, gives you the ownership rights for a particular referral transaction, it’s tough for a hirer to dispute. But the disputes are between you and the reluctant company. The candidate is merely the peripheral subject of the deal. They can be used as a witness on your behalf to the fact that they thought (at the time they signed it) that their resume had never been placed in a company database with their permission, but it is not a deciding factor in any legal action. Persuasive, yes! Decisive, no!

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