Issue: Placement fees, payment terms, refunds, fall-offs and guarantees

Original Date: 03/19/1990; Last Revised 02/18/2002

Fee schedule
The fee schedule used in a placement should be agreed upon by both agencies prior to an offer being extended to the candidate, preferably in writing. Both agencies are equally responsible to see to it that this agreement takes place, in advance. The placing agency should not present the candidate to any client that is not willing to pay the minimum acceptable fee of the agency submitting the candidate as identified on the candidate’s Top Echelon Network Resume Data Sheet (RDS [candidate profile]) or similar data sheet.

Each firm’s percentage
Each firm involved in a split placement through Top Echelon Network is required to split the fee as follows: 6% brokerage fee to Top Echelon Network, 47% to the placing agency, 47% to the agency supplying the candidate. Only in very rare situations has Top Echelon Network deviated from this breakdown. As a general rule, this policy will prevent some recruiters from insisting "they’ve done more work than you." This policy also ensures that firms supplying candidates (e.g., outplacement firms) must take 47% of the fee. This has to occur in order to protect the balance of Top Echelon Network. If we let someone input their candidates into Top Echelon Network’s Split Candidate Database who will accept a lesser fee, their candidates would become more attractive to placing agencies than other Top Echelon Network Members’ candidates. This cannot happen.

Payment
Immediately upon receipt of the client company's payment (i.e., check), the job order recruiter is responsible to distribute the appropriate brokerage fee to Top Echelon Network and the appropriate amount to the candidate recruiter. Accompanying the payment, the job order recruiter must include a photocopy of the client’s original commission check and a Completed Placement Form. Holding a Member’s portion of the fee for more than 24 hours (for any reason) is forbidden unless it is agreed upon in advance by both parties, in writing.

Guarantee period and Refund/Replacement Policy
Top Echelon Network Members agree to honor the guarantee period and refund/replacement policy which the job order recruiter extends to his client. It is the responsibility of both recruiters to make sure that the candidate recruiter is aware (preferably in writing) of the guarantee and refund/replacement policies before their candidate is interviewed.

Fall-offs and replacement guarantee
In the event a candidate quits or is terminated (for any reason) during the guarantee period and the job order recruiter’s guarantee is to replace the candidate or refund the money, Top Echelon Network considers this placement a "fall-off." The agency with the candidate and Top Echelon Network are to refund the proper percentage (normally 100%) of their portion of the fee to the job order recruiter immediately. It is then the sole responsibility of the job order recruiter to replace the candidate, return the fee to the client, or work out some other arrangement with the client. The agency supplying the originating candidate is not entitled to keep their fee, because the placement was a "fall-off" and their candidate did not work out.

Refunds
As a general rule, all Top Echelon Network Members agree to adhere to the job order recruiter’s refund policy as published on their fee schedule, job order, or other printed correspondence, etc., (whichever is more recent and pertains to the specific situation at hand). If a fall-off occurs during the guarantee period and monies are to be refunded, Top Echelon Network and the candidate recruiter are expected to immediately refund their portions of the placement fee.

Information disclosure
The job order recruiter is required to provide the candidate agency and Top Echelon Network with the pertinent information about a split placement (e.g., client bill rate, candidate salary, expense provisions, relocation provisions, fee charged, payment terms, retainer terms, guarantee period, replacement policy, refund policy, etc.).

Retainers
Any retainer (e.g., up-front monies, partial payments, containers, or engagement fees) received by the job order recruiter is considered part of the overall placement fee, and should be split proportionately with the candidate recruiter. If the job order recruiter has a retainer scheme so complicated that it cannot be determined "how much of the retainer" should be applied to any individual placement, we ask that Member not to share those assignments with Top Echelon Network Members. And, if a placement does not occur, the Member with the candidate is not entitled to any of the retainer.

Spirit of this Policy
There should be no surprises as to what fee percentage will be used or when the candidate recruiter should expect to receive their portion of the commission. It is the responsibility of both recruiters to communicate the terms of each placement with each other. Once a candidate has accepted the offer, it is normally too late for either party to change their mind. Therefore, the job order recruiter must communicate when an "interview" is about to take place. This will ensure that the candidate recruiter has a chance to get their questions answered before it is too late. Also, once the candidate recruiter is aware that an interview or offer is possible, it is that recruiter’s responsibility to make sure that they know the details of the potential placement.

Disputes
Clarification of fee changes: Top Echelon strongly advises that placing recruiters have the terms and conditions in their fee agreements agreed to in writing in advance. We recognize several areas where fee changes can occur. (1). When the company is still in negotiations to hire an individual and wants to renegotiate the fee agreement. (2) After the candidate has started but the fee has not yet been paid (e.g., the company decides they would like to try and renegotiate the fee). (3) A partial fee is already received, but the client starts claiming financial difficulty and asks to renegotiate the remainder of the fee. And (4) the fee is received even though the candidate has not yet started working, and the client decides that they would like to renegotiate part of their fee back. In all of these situations, TE strongly advises the placing recruiter to communicate these conditions to the submitting recruiter and give that recruiter an opportunity to be included in the decision. It has been Network experience in these situations that if the placing recruiter advises their client company that the candidate in question is a "Networked" candidate and explains that they do not have the authority to amend the original agreement, the company will generally agree to comply with the terms of the original agreement. The placing recruiter needs to understand that they will be held responsible for any unilateral decisions that may change the original fee agreement and will be expected to bear the full impact of that decision.

Clarification of fall-offs and guarantees: Once again, Top Echelon strongly advises that placing recruiters have the terms and conditions of the guarantees included in the fee agreements and that they be in writing. Top Echelon Network Management believes we are all business professionals and that all parties to the placement process understand what their obligations and responsibilities are when a fall-off occurs during the guarantee period.

However, if a fall-off occurs (for any reason) after the guarantee period has expired, Top Echelon acknowledges that the placement is complete. We feel that both recruiters have acted in good faith and neither the job order recruiter nor the candidate recruiter is obligated to either refund monies or provide replacement candidates. It is then the responsibility of the job order recruiter to decide how they want to remedy the situation and how they want to maintain their relationship with that client. Top Echelon encourages the parties involved with that placement to discuss the specifics surrounding the fall-off and try to come to a mutually beneficial resolution. Top Echelon would hope that all parties keep in mind the "spirit of networking" and try to help each other.

Top Echelon Network's Philosophy
Top Echelon recognizes that all of us need to protect our interests by the use of appropriate contractual agreements. We strongly recommend that these agreements be carefully negotiated and that they be in writing. While Top Echelon does not encourage the use of guarantees it does recognize that guarantee periods have long been an accepted and integral part of the placement process. With that in mind, Top Echelon strongly advises that all participants to the placement process become keenly aware of the terms and conditions set forth in these agreements when they make a decision to work on a particular assignment.

It is not Top Echelon’s policy to support any arbitrary and unilateral decisions made by one recruiter that could adversely effect another recruiter who has operated in good faith and has complied with the guidelines of Top Echelon Network Policy 11. Any recruiter that feels he/she needs to make such decisions without consulting with the other parties involved also needs to be prepared to bear the full impact of those decisions.