Struggling with Recruitment Fees: How Do I Charge Clients or Candidates Fairly?

Dear Forum member,

I am in a confused state. I am not too new to HR consulting, but I was not a full-time entrepreneur in it. I have worked in HR firms and have also done some recruiting for companies like BPOs and IT firms based in Chennai and Bangalore during my college days. During that time, most of them were either working with other consulting firms or some firms that were hungry for candidates.

Recently, my friends and I came up with an idea of getting into the recruitment business completely. I have sufficient contacts to get tenders and know how to find candidates. At the moment, we are focusing on middle-level companies.

Here is the problem: Some of these companies require our service but are not willing to pay for it; they are asking us to collect payment from the candidates. I don't want to lose these opportunities because each contact is valuable to me, and I may get more referrals from them. However, I also do not want to provide free services.

Charging Client: Impossible
Charging Candidate: Possible (But how and when?)

Candidates are usually unwilling to pay in advance before they secure a job unless we provide them with job security. Additionally, those who are aware of recruitment scams are cautious about paying in advance. If I try to charge them after they are recruited, they might avoid me as if I were a leech (which may be true). I am limited in how much pressure I can exert on the companies that need our services.

Any ideas from anyone would be greatly appreciated.

Thanks in advance.

VR

You can charge your clients only; candidates will not pay anything. You can charge one month's salary, as decided by the company, to the candidate. I think it's enough for you.

Hello VR,

Let me explain a bit on what Ravi means... if I can read him right.

First and foremost, decide what YOUR CORE VALUES are - professionally and ethically - what's YOUR bottom line. If you think - what's wrong with charging from the candidates? - think for yourself IF YOU CAN GO ABOUT AND TELL EVERYONE YOU MEET that's what you do and it's right. If you can do it, go ahead. If not, then there is something wrong in that practice... right? Anything that has even the slightest need to hide or cover up isn't ethical - the thumb rule of ethics.

The first step to any unethical practice is very enticing and looks very small/simple. BUT REMEMBER IT'S ONLY THE FIRST STEP THAT'S IN YOUR CONTROL. Once you take it, you will not be able to return back to the right path... or at least it's really tough that you will begin to find the wrong path easier than working all the way back. The best and most recent example is of Satyam [don't say... not again!]. What Ramalinga Raju started... by his own admission... as a small adjustment in the accounts soon ate him up - and in the process, lakhs of people's money.

So I repeat what Ravi said: no more explanations.

The rest is your decision... but always be ready to face the consequences of your actions - be they positive or negative. To quote someone here: In nature, there are no rewards or punishments, only consequences [what we say in Hindu philosophy - karma... good or bad].

Regards, TS

Thank you for your advice. Let me tell you what I have seen. When recruiting people for companies like Idea, Aircle, Airtel, etc., I have noticed consultants in Chennai, Kerala, and Bangalore charging the candidates. However, those working with MNCs like Sutherland do not charge the candidates.

I accompanied my friend to company XYZ (a well-established company) in Cochin for a job opportunity in a software company in Infopark, Cochin. Eventually, the lady informed us that we would need to pay them an amount equivalent to one month's salary after my friend receives his first pay. This same dialogue was echoed by a few other consultants, with four of them being well-established with bases in more than five cities in India, and the rest being startups.

VR

Hi VR, Ravi has put it succinctly. Kindly take a look at http://www.business24-7.ae/articles/...cdf7f0812.aspx that may change your views.

Simhan A retired academic.

Dear Peer,

This is not the right practice to charge a candidate who really seeks a change. If you are so good in talent acquisition, why doesn't the employer give you a right pay?

In today's market trend, employers are seeking the right candidate for the right position. It is a very big challenge for them. Prove yourself and find the right company to move forward. Again, don't think to charge the candidate.

Regards, Nelson Chennai.

VR... I guess you should drop the idea of charging from candidates. There are a lot of companies that pay you for getting them the right candidates. The rest is up to you to decide.

Don't make candidates feel that they have to pay for getting selected. They have already paid in the form of "investment" in education. Trust me, if tomorrow I were contacted by a consultant and asked to pay the amount if I got selected, I would say, "Why would I pay for getting through the interview...are you talking for me or clearing the test for me?"

But on the other hand, if the company pays the consultant, then it just speaks about the company that they are ready to spend for the right talent. Here, you need to understand what you are trying to sell and to whom. Are you selling the right talent to the company? Or are you selling the company to the candidate? I hope you got my point here.

Take care and make wise choices/decisions. Not everything in life comes in a trial and error basis. Once your company's name is spoiled, it's gone forever.

Thank you all for your valuable suggestions and advice. However, I have received a few contracts from clients who are willing to pay. After reconsidering this matter with my partners, given the high level of competition and the need for longevity in this field, I have decided not to charge the candidates under any circumstances.

Thank you again, all.

VR

It's more logic and the psychology of the candidate is exactly what you said. That's what I thought when I went with my friend for the interview.

Good VR... ALL THE BEST. All of us (I hope I can say 'us') are happy to have contributed to your right decision.

So I have one more competitor to handle in this wide, bad world of Recruiting, who wants to stick to core ethics :p. But jokes apart, it will be worth it in the long run VR.

Rgds,
TS

It's illegal to charge the candidates. I don't know if there are any stringent laws regarding this, but there should be laws in place and they should be enforced. Placement and job matters are sensitive, so let's not play with them. You can convince clients to pay for your services, but at the very least, it is morally unethical. I would advise candidates not to pay any consultant for their hard work. Just because others are doing it, doesn't justify us doing the same. Think. Think and think...

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Recruitment Payment Practices

Usually, clients pay for your recruitment efforts, typically around 8.33% of the annual salary of the candidate. Charging candidates for this service is considered a bad practice and unethical.

Regards,
Sellvaraj Natarajan
Top Recruiting Solutions Inc