When dishonest employers and candidates cheat the staffing agency

I'm going to talk about the absolute dirtiest part of the recruiting industry, which is getting cheated by your client and candidate. It's heartbreaking and violating at the same time.

There are countless immoral justifications that employers use for walking out on their bill with the staffing agency, but just know that it happens; and it's so hard to believe that both candidates and clients willingly participate in the con.

How a staffing agency is supposed to get paid

Typically, a staffing agency will make 20% of a candidate's annual salary. So, just using round numbers, if a high-net-worth individual hires a domestic staffing agency to find a personal assistant or estate manager at $100,000 a year, then the agency will make $20,000 for their work (which could take weeks or even months to earn).

All employers LOVE the convenience of using a staffing agency -- who wouldn't? You just make a phone call and get turnkey candidates delivered to your door. In a way, it's like using Amazon Prime; but for household staffing.

Although employers adore the convenience of using a headhunter, not all of them want to pay for the service (even after they've used it). Some of the employers, unfortunately, are like those hustlers who go to five-star restaurants and order $300 worth of food and then pretend to choke to get out of paying the bill.

The justification for cheating the staffing agency

Supposing that the client's justification for not paying the commission due is that "it only took them a week to make the placement. He just made a few phone calls, so why should he get paid $20,000 to do that."

I hate to state the obvious, but recruiters spend thousands (yes, thousands) of hours a year interviewing candidates and building their book of business. Tens of thousands of dollars (yes, tens of thousands) are spent on job ads and other expenses to promote the business each year.

Then, of course, there is the office overhead and payroll. So, all in, recruiters are in the hole to the tune of hundreds of thousands of dollars a year. All of those systems are in place so that we can "just make a few phone calls and get a candidate in a week for a client." In short, the client is paying for the expertise of the headhunter and the convenience.

Otherwise, the process for the client would like this this if they were doing all of the work by themselves:

• Consult with an employment lawyer so you don't break any employment laws
• Draft a professional job description that will actually attract quality candidates
• Take out job ads
• Get bombed with resumes
• Read and sort all of the resumes
• Make a short list
• Confirm the employment of the candidates that you want to interview
• Check the references of the candidates
• Run background checks
• Start conducting interviews
• Select the candidate that you want
• Negotiate an offer
• Hire a lawyer to make an employment contract

All in, it could be one to three months of work. Is all of that worth 20% of the candidate's salary. You bet! And them some.

When and how candidates make a deal with the devil

Now, here is where the "conspiracy" unfolds. After the agency has done all of the hard work, the dishonest employer decides that they want to hire a candidate; but they don't want to pay the agency, so they carefully craft a "pitch" to get the candidate onboard.

The candidate knows that they agency has to get paid. It was explained to them verbally, and it's in the agreement that they signed when they said they wanted the agency to represent them.

So, when some employers decide to circumvent the agency, the candidate who wants the job, unfortunately, agrees to go along.

"When you lie down with dogs, you will get fleas"

After the employer "ghosts" the agency and the recruiter just assumes that the employer didn't want to hire anyone, the employer and the candidate make their "back-room deal."

Now, here's what the candidate never thought about... Any employer dishonest enough to "walk out on their bill" is also going to stiff the candidate too -- sooner or later.

Any business relationship that is founded on mistrust is doomed from the very beginning.

Eventually, the employer will probably fire the candidate and not pay them their last paycheck. Additionally, the employer also walks away from their responsibilities of confirming the candidate's employment and won't give them a reference letter either (which is critical in the domestic staffing industry).

So, what happens to the candidate? They will have a six-month or one-year gap on their resume. They will have to lie to the next employer and say that they were unemployed during that time. There really isn't another choice because they can't confess that they were employed and it ended badly, or the next employer won't want to hire them.

But the problem is that many employers don't want to hire candidates with large employment gaps because they are suspicious that something is wrong.

The right way for candidates to handle it

If an employer approaches a candidate and asks them to do something dishonest, run as fast as you can the other direction. If you make a deal with the devil and sign on, then you will come to regret it later -- in one way or another. The employer will ask you to do something dishonest in the line of duty, and then you will be living a real-life Edgar Allan Poe story.

Yes, this article is a cautionary tale. I've been recruiting for celebrities and high-net-worth families for 16 years, and I've never been wrong about this topic once. Not once.

Sooner or later, the staffing agency eventually find outs what happened, and then we are left with our head in our hands, saying to ourselves, "Wow, I just can't believe it." And, surprisingly, it's done by the richest of families.

Strangely, I've even had some of those dishonest candidates come back later and ask me for help getting another job. It's utterly shocking.