Client Not Paying For Recruitment Services Rendered

Dear All,

I am working in Bangalore with one of the reputed HR consultancies. We have provided manpower recruitment services to one of the leading general insurance companies, which claims to be number one in their segment. They also have a bank under the same brand name.

As per the agreed terms, they are supposed to pay us the service fee within 45 days from the date of joining. The candidates joined in the month of July 2010, and to date, we have not received our payment. Initially, when we followed up with HR, they gave excuses such as the payment would be done in 7 days, by the end of the week, by the end of the month, and so on. For the past month, they have started ignoring our phone calls by disconnecting and not replying to emails.

I need all your suggestions on how to handle this situation and what actions we should take for non-payment and the harassment.

Reply awaited!

Thanks,
Anuranjan

Dear Mr. Anuranjan,

Please go ahead and meet the concerned person directly and speak with them. If that does not work out, you can certainly raise an email to his/her superiors in that regard.

Thanks,
Miracle
CEO

Hello Anuranjan,

Assuming your client is in a position to pay (meaning not having any financial problems), the candidate you placed is still on their rolls (meaning he/she hasn't quit) and your agreement is what you say it is, I think such people/companies need to be exposed in the public domain. I am not sure of others' responses, so I suggest please wait for others to respond.

Let us, HR professionals, learn from what's happening all around us. So many scams wouldn't have seen the light of day in the past few months if the media didn't bring the issues/scams to the forefront in the public domain. I have observed that there are quite a few people/companies who only admit or act when things come out into the open. For such people/companies, going the legal way may not be the right approach. But I suggest waiting for other responses.

Regards,
TS

Hi Anuranjan,

It is sad when companies behave like this as it reflects badly on their brand image. I have seen that if a company decides that they don't want to pay you, there is nothing that you can do about it. The decision not to pay must have come from the concerned authority only, as a violation of a contract is a risk. Additionally, the company might have calculated that your consultancy cannot afford the time to go to court to enforce the contract.

I am not saying that you should give up. You should definitely communicate with the concerned senior and even go up to the CEO/MD if you need to. Just be prepared that you are in a long and complicated situation and that you might not see that money.

Thank you a lot for the suggestion. I am waiting for more replies. I would like to add that when I spoke to the HR today, she started reacting by saying that I am not the only one in the market, and she doesn't want to communicate with me anymore. I am stunned. Please suggest, as I really want to take it seriously.

Thanks,
Anuranjan

Dear Anuranja,

You should name such firm/company so that other recruitment agencies in the market may be aware of such kind of organization. Anuranjan, if they are behaving like that (as you mentioned in your second post here), you should take some stern action against them. I would suggest reminding them of the terms & conditions of your services and if that does not help, then take legal action if they do not pay or rescind your services in the future.

Thanks & regards,
Krishna Sati

Hello Anuranjan,

I suggest escalating the issue with the Head of HR and then the CEO in writing. From now on, all interactions should be in writing. Even if you have to speak over the phone, follow it up with an email summarizing what was discussed. This way, you avoid any chance of them later claiming ignorance about the problem. It is observed that many individuals at senior levels overlook this aspect, failing to realize that such situations could have been avoided if proper processes and procedures were in place.

Additionally, please be prepared for any potential backlash from the company. This is where having communication proofs will be beneficial. It would be wise to wait for suggestions from other forum members before taking any definitive action.

Another perspective to consider is the magnitude of the amount due. If the sum is not significant, it may not be worth the effort involved. Essentially, it is crucial to think in terms of cost-benefit analysis.

Regards,
TS

Dear Anuranjan,

You have my sympathies. I also feel concerned about the fate of the candidate whom you have placed. It is ironic to find that while recruiting a candidate, a company will have lots of specifications and rigorous requirements about the candidate, including things like background verification, reference checks, salary verification, etc. However, once a candidate has joined, they themselves begin indulging in such unethical practices. Is it not like a thief trying to hire honest sidekicks to help in his thefts and other unlawful activities? I hope other consultants, too, share their experiences about such unscrupulous companies.

Warm regards.

Dear Anuranjan,

I appreciate the suggestions and help given by my fellow members and friends. As they said, you can directly talk to the MD/Chairman of the company, stating the problems and issues faced by you from their HR department. I would also suggest that you stop recruiting for them. Even if they release your payment and come back to you with new mandates, I suggest that you do not entertain them. Let them repent for what they have done.

Also, you can pass on the message to the other consultants in your city who work in your field to not recruit for them because of this malpractice. I believe that this is not the best practice, but you have no other alternative.

Hi friends, do we have a shared forum or site, etc., where we can find names and details of such clients/firms/companies so that other recruitment agencies in the market may be aware of such kinds of organizations? This would help each/either of us to avoid such situations.

Thanks

We also have the same experience with our client "Havmore Insurance Brokers" in Mumbai. We placed the candidate Prashant Tambe with them with a lot of effort in a senior position in corporate strategy. They conducted the interview and provided an offer letter to the candidate. When we asked them for his payment details the next day, they forwarded an email from the candidate indicating that he was not interested in the job. (Please note that the candidate did not inform us but informed the company HR via email). We also assumed that he was not interested as the candidate was not answering calls. After some time, we checked social websites like LinkedIn and other job sites and found that he had updated his profile with the same month and year for which he had accepted the offer letter from the company.

We tried to contact the HR - Ms. Pradnya from Havmore. She provided different answers initially and later mentioned that the candidate was informed by Mr. Manek (working in a senior position with them) through his references. After several follow-ups, she denied that the candidate was introduced by us at any point. We attempted to speak with the senior MD - Mr. Hamang, who took a long time to respond. After numerous emails and calls, he finally stated that his department did nothing wrong, as the candidate had joined three months after receiving the offer letter, therefore not considering our introduction. The company seems to engage in malpractices not only in HR but also in other areas. Consultants should be cautious when dealing with this company. I had provided excellent candidates to them, but now I suspect there may be many more candidates I placed with them without being informed. They lack a proper HR setup but engage in this kind of deceit with consultants who invest significant effort in providing good candidates.

Concerns About Non-Payment from Employers

This is a very serious concern for consultants like us. We have encountered a couple of unprofessional employers who refuse to pay on time or even bother to pay at all. What they don't understand is the time and effort of recruiters and the support we provided, most importantly, "when they really wanted the support."

A public forum is a great thought, and I can work on that as well, at least in the region where we provide our services.

My question is, are there any legal constraints on publicly naming or mentioning these companies? Getting into trouble for this is the last thing that I want at the moment. :)

Regards,
Monu

Legal Constraints on Naming Companies

My question is, are there any legal constraints on publicly naming or mentioning these companies? Getting into trouble for this is the last thing that I want at the moment. :)

If your facts are true, then you can easily defend your position. Clearly highlight how the company is avoiding making due payments as agreed upon during the consultancy process. The lack of ethics needs to be highlighted in legal and correct terms. The company may threaten legal actions and apply other types of pressure by approaching other competitors in the same line, etc. Be ready to defend your position, but you should not hesitate to name companies after all efforts to sort out the matter are done. Ensure that your side is clear, and there are no skeletons in your cupboard.