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How to Control Rogue Agency Usage

What Are You Doing to Control Rogue Agency Spend

It can feel like a real battle out there if you’re on the receiving end of multiple calls every day from recruiters you don’t know, and frankly dont need support from at that given time. 

Recruitment agencies win most of their work from picking up the phone and calling TA. And when TAs don’t want to play ball, they sometimes go to the hiring managers instead.

Now, can the agency be blamed for doing this? If they aren’t being given direction and just ignored, then I don’t believe so.

However, if TA is telling them,


‘No thanks, we already have a panel’,

or

“Thanks for letting me know you have a great candidate but we don’t need help on this role’

or 

‘We are still sourcing internally. If we need to engage externally then you’re welcome to bid via TalentVine’.

….and the consultant is ignoring that and still canvassing the hiring managers knowing full well this is going to cause tremendous frustration for the TA team, then that’s a red card and the consultant can, and should be penalised.

I know a TA team that has to spend 45mins of their time completing procurement docs every time that they are forced to hire someone from an off-panel agency. I can’t think of any other industry where a supplier ends up getting paid when they’ve purposely created more work for their client.

This is the behaviour from the 3% of consultants that cause distrust with the 97% that are doing the right thing and you can only hope that if the leaders of the agency were aware of this, they’d be taking serious action.

This is not about the good ones

Our role is to connect employers to the most suitable recruiters in the market and there are plenty of incredible ones. This post isn’t about them. They do the right thing, invest in long-term relationships with talent and hirers, and get consistent work from trusted employees without having to do backhanded BD. 

To put data behind this, 92% of recruiter ratings from employers that have worked with them on TalentVine are either an 8or 10 so for the most part recruiters are incredibly valuable and the ratings reflect this.

This is not about high-quality recruiters like Cecelia here…

Instead, we’re talking about recruiters like Rodney here…

What Role Can HR Tech Play?

There are little black books that are shared in the industry. We have a list of agencies that we will never let on TalentVine due to dismal behaviour but even still we can’t catch them all every time. We share warnings with other marketplaces on certain consultants, and sometimes whole agencies that underdeliver or try and disintermediate us. 

It’s remarkable how many times we’ve been doing a demo to employers and they’ve asked, “Is Agency X on TalentVine because if they are, I’d question your screening processes.”

I remember a recruiter hired a finance role for an engineering client of ours at 12% and 6-month replacement guarantee. Off-platform, the employer asked them to help with another role a couple of weeks later which they did. Except this time the recruiter claimed that once the candidate’s contract had been signed ‘Oh, on the footer of the CV there’s a link to our terms which are 20% and 2 months for this role.’

Smoke and daggers!

The employer hadn’t released the role through their TalentVine portal so there were no agreed terms and they were relying on good faith which is fine until things go badly as they did here. We threatened to kick this agency off the platform as employers expect high-quality recruiters through us. They quickly offered the 12% and 6-month terms again. Once the invoice was paid, we removed them anyways as that behaviour was unlikely to change and three years later they still aren’t on the platform.

So, what can you start doing today?

These things can make life easier from the start:

A clear message on your job ads and careers page

This can range from the placid:

“We value direct applications from talented individuals. We kindly request that recruitment agencies refrain from submitting unsolicited candidate profiles. We appreciate your understanding and encourage interested candidates to apply directly through our official channels. Further terms of service can be viewed here <linked text below>”

to

“Attention Recruitment Agencies: Unsolicited candidate submissions are strictly prohibited and will not be considered. Any attempts to bypass this policy will result in an immediate disqualification from your agency from participating in any future partnerships with our national organisation. We are focused on building direct relationships with candidates and our selected panel, and kindly request that you respect our process. Failure to comply will result in a permanent ban from working with our organisation. Further terms of service can be viewed here <linked text below>”

The further terms of service should read:

Legal Disclaimer – Recruitment Fees Authorisation

  1. All recruitment fees must be explicitly agreed upon and signed off by our authorised representative(s) before any payment obligation is incurred.
  2. Our organisation does not recognise or accept any recruitment fees that have not been formally agreed upon and authorised by our business.
  3. Any attempts by recruitment agencies to insert hidden links or clauses in a candidate’s CV, email, or any other communication that purports agreement to pay a recruitment fee without prior consent will be considered null and void.
  4. Opening or engaging with an email, CV, or any other correspondence from a recruitment agency does not constitute acceptance or agreement to pay any recruitment fees.
  5. Our HR team is solely responsible for approving and authorising recruitment fees. No other individual or department within our organisation has the authority to bind us to any financial obligations without proper authorisation.
  6. Any recruitment agency claiming entitlement to a fee without a documented, signed agreement from our authorised representative(s) will be deemed to be in violation of our terms and will not be entitled to any payment.
  7. In the event of a dispute regarding recruitment fees, any claims must be submitted in writing and supported by documented evidence of a signed agreement explicitly outlining the fee structure, terms, and conditions.
  8. Our organisation reserves the right to take legal action against recruitment agencies that attempt to impose unauthorized fees or engage in deceptive practices.
  9. These terms and conditions shall prevail over any conflicting or ambiguous terms proposed by recruitment agencies unless expressly agreed upon in writing by our authorised representative(s).
  10. By implementing these legally sound terms and conditions, our Talent Acquisition team aims to protect our organisation from unapproved recruitment fees and ensure that any financial obligations are entered into knowingly and with proper authorisation.

Hiring managers, accounts and procurement need to be on board with this too

The first step is executive endorsement and messaging around the company’s position and use of agencies. This is an opportunity to clearly articulate internal capability and clear KPI’s on agency spend. It’s also important to make clear who owns the Recruitment Agency general ledger and supplier line.

There is change management that is required within an organisation to ensure that rogue agency usage is stamped out. Hiring Managers, Procurement and Finance need to know that you don’t accept applications or pay recruitment invoices from agencies without TA’s approval. Every new starter in the business needs to know this. If they come to TA and say, “I’ve been speaking to this agency and there’s a candidate that I really want us to hire”, they need to understand that this is a candidate that TA may already be speaking to, or you could have found them yourselves, or your panel could have found them at half the cost if agency support was needed.”

Is TA communicating this message to the business, and if not, how can they be expected to know this is the process to follow?

Will this fee come out of that department’s budget? What implications can follow a case like this that will ensure that the team doesn’t engage in unsolicited recruitment again? These responses need to be consistent across the organisation.

Whilst it isnt TA’s wrongdoing when this happens, it’s TA’s responsibility that the organisation knows this is not tolerated.

Use TalentVine as a Shield

Even if you have no intention to use TalentVine any time soon, you’re more than welcome to use us as a shield from unwanted contact. “We are not currently engaging agencies for this role but if we do, we will be releasing the role through TalentVine on our terms of service. When this happens, you’ll be very welcome to bid and work with us if selected.”

Rewarding Good Behaviour

On TalentVine you can create your own PSAs as TalentVine is setup as a master vendor so that all agency selection, agreements on terms and invoicing is done through one platform. This creates no cost to your PSA agencies but can create a processing cost for off-panel agencies that is returned to the TA’s budget. If an agency wants to get onto your panel and retain their full fee in future, this can be done with your blessing thereby encouraging positive engagements, as opposed to getting blackbooked for all future engagements.

Are Your Panel’s Terms of Service Fair?

There are also cases where organisations force agencies to go through lengthy RFP processes, locking in very low fees and then never giving the agency any roles to work on. This can come back to bite you as when the time rolls around to update the PSA agreement, agencies may opt not to participate in the RFP because they know they can instead circumvent their panel and get paid double the fees. Again, this goes back to having a watertight procurement process as you don’t want the market feeling incentivised to go around the TA team.

How TalentVine can help?

Our VMS solution enables employers to easily compare, select and engage with the right recruiter every time a role needs to be outsourced. All engagements require agreement against your terms of service.
Fees can be agreed on a per-role basis where consultants bid via a blind auction for your work, or the fees can be baked into your terms of service.
Consistent invoicing through one provider, no lengthy onboarding of new suppliers. Your legal, procurement and finance teams will love us.
Plus, the ability to leverage your industry peers’ ratings into the previous performance from consultants. Recruiters are incentivised to overperform given that your anonymous ratings coupled with their performance metrics, will be seen by your team and other organisations before engagements are made.

If you’d like to understand if we can create a solution for you, please select a time here.

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