I wanted to change the impression in the insurance market of a ‘specialist insurance recruiter’.
Frankly, when I have tried to hire business developers, brokers or underwriters during my career, I experienced poorly trained and unprofessional recruitment agencies, simply chasing a fee.
Most had little regard for actually listening to what I needed. When you combine that with no understanding of contract law between agencies, respecting a PSL, compliance or actually understanding the role that I was recruiting for, it always made for a frustrating exercise when trying to appoint new staff.
As a broker and underwriter, I specialised in professional risk of recruitment agencies looking after the majority of the top 250 recruitment agencies in the United Kingdom. At our peak, my company insured some 3,500 recruitment agencies in the UK and internationally against their professional risk exposure, errors and omissions. We were leaned on hourly to ensure the governance and compliance of these businesses and offer protection should the worst happen. Assisting to avoid potential litigation, we advised on all matters of contract, employment and civil law to assist in navigating the depths of contingent recruitment liability laws in the UK courts for recruitment businesses.
Working alongside the Recruitment & Employment Confederation, The Association of Professional Staffing Companies and DAS Legal, a common claim and complaint was the following;
“When working with multiple agencies, who has candidate ownership? I have a couple of agencies that have sent me the same candidate. The candidate is perfect BUT they have different terms of business and I don't know who I should request the interview with.”
One of the best outcomes of the new GDPR regulation swinging into full-force is that clients can now establish which recruitment agency they work with ‘owns’ a specific candidate with far more clarity when working with multiple suppliers.
In essence, the GDPR regulation has imposed responsibility onto recruitment agencies to improve their ‘top down’ recruitment culture, ensure candidate data acquisition and processing internally for current or future roles is completely compliant. As a result, the GDPR regulation has focused on the specific recruiters within these recruitment business, their professionalism and working with them to ensure the thoroughness of following internal processes and procedures to remain compliant.
For a client working with multiple agencies, putting candidate ownership under the spotlight alongside the GDPR regulations themselves can really help companies understand which agency is due the fee when they have been successful in introducing a potential candidate or when the client would like to arrange an interview.
The two key areas of the GDPR that agencies have to abide by are detailed within the GDPR Recruitment Report. In essence, recruitment businesses have to improve the ‘top-down’ performance culture of their staff (training, compliance and regulation). Furthermore, how the personal information of potential candidates details are kept and used for current and future vacancies of that agency is also heavily regulated.
The GDPR has impacted how personal data of candidates can be obtained, stored and used. Even if a candidate posts their CV on a CV database, LinkedIn or even applies for the role directly with multiple agencies, this does not mean that the agency has the automatic right to download and process that personal information (or even submit their CV for a job role and interview request).
For an agency to submit a candidate (speculatively or otherwise), they must obtain this permission from candidates, explicitly. The agency must divulge to the data subject on what their personal data is being used for, who specifically it will be shared with (i.e. you, the client) and if it is stored, how long it will be stored for.
Due to the nature of contingent recruitment and liability, the situation of candidate ownership can become laborious when two agencies claim that they have ‘ownership’ of the same candidate. Unfortunately, this is really common in the industry due to candidate acquisition being such a competitive space and some agencies not being compliant with the law. That said, when a client is faced with the possibility of having to pay two introduction fees, which could potentially equate to a small fortune, clients will often opt to retract the offer of employment or retract the offer of an interview if at early stages.
Sadly, the one important person that these agencies neglect to care about in this instance, is the candidate. It's their data that has been incorrectly handled and it's that candidate who has been misrepresented. It's that candidate who looks 'two-faced' to the client. Often a candidate will miss out on an opportunity just because a greedy or uneducated consultant in an agency somewhere failed to be compliant. A sore deal for the candidate in an attempt for a 'quick fee'.
So, you are working with a number of recruitment agencies and two agencies send you the same candidate. Both are claiming ownership of that candidate, what do you do?
You need to consider three things:
(1) Which agency can provide me with a copy of the written consent that they obtained from the candidate noting they are happy for their details to be disclosed. Does this correspondence state the candidates express permission to send their CV to me for interview request?
(2) Once you obtain the explicit consent, how am I affected by Contract Law or the terms of business in place with the agencies?
(3) Consider the “Effective Cause” principle.
Explicit consent of the candidate
One thing that is very clear, regardless of contract law or effective cause, recruitment agencies have a huge responsibility when it comes to obtaining, processing and storing candidates personal data. If you are receiving a CV from a recruitment agency, they absolutely should have already obtained the candidates specific and explicit consent to share their personal data (i.e. their CV and salary considerations) with you, the client in consideration for that role.
If one agency can provide you with this and another agency cannot, there should be alarm bells raised around the governance and compliance of the agency that cannot produce this important correspondence. In essence, agencies that submit a candidates CV without their permission, are simply trying their luck at being ‘first come, first served’. This is an undeniably outdated approach to 'old-school recruitment' that is outdated by the law itself. This approach leaves that agency open to a fine from the ICO for breach of candidates personal information.
Working on the basis of basic contract law within recruitment, it’s fairly straightforward that a recruitment agency will agree their terms of business with a company to provide introductions of potential candidates to clients. This can be in respect of speculative or for consideration against specific roles. In some instances (and poorly in my opinion), a candidates CV details will be disclosed and submitted to a client, alongside terms of business without any terms of business actually being agreed between parties and worse still-without the candidates consent.
Typically within these examples of terms of business, the agency will describe what will happen when a candidate’s details are submitted for interview consideration and what will happen if the candidate is invited for interview and successfully appointed. As this stage, this is a contractual offer. Important to note that the client is free to accept the offer or not accept it.
If you receive a CV submission from an agency that is unsolicited or without the candidates consent, it’s strongly recommended to openly reject the candidates CV and the introduction itself from the unsuccessful agency. A recruitment agency that does this may be doing it without the candidates explicit consent in the hopes of ‘generating new business’ from a new client or earning a 'quick fee'. Most professional agencies that are ethical will at this point back down and respect the fact that the candidate is being represented by another agency with full consent from the candidate.
Unfortunately, some clients do not actively reject duplicated introductions from recruitment agencies and this is when it becomes necessary to work out which agency is the effective cause of that positive activity.
Under well-established recruitment agency law, the recruitment agency that is demanding a fee for a duplicated candidate submission needs to be able to prove that their work was the effective cause of any introduction or transaction itself taking place between a candidate and the client. This needs to be considered alongside explicit consent by the candidate also.
In an attempt for clients to try and reduce the administrative burden of rejecting speculative or duplicated candidates, some clients will try to introduce a ‘first come, first served policy' when reviewing candidates CV’s. That can also be derived from companies being intimidated by agencies demanding a fee as they ‘sent the CV first’. Who want's to work with a recruitment company like that anyway? Unprofessional in my opinion.
This approach can give rise to poor recruitment practice from agencies as they will work under pressure to submit a candidate, without following correct data protect laws. Secondly, the UK courts are generally unwilling to uphold a “first to introduce” approach and instead imply the “effective cause” principle. The Effective Cause principle is now well-established in case law and in essence considers whether an agency had an effective part to play in the submission and/or employment of a candidate with the new GDPR regulation also being considered.
If the agency is not effective in the cause, that agency has no entitlement to an introductory or recruitment fee of any kind. Even with these 12 month introduction protection clauses.
My parting advice and understanding of what to do in the instance of receiving the same candidate from multiple agencies is simple. Who can provide you with the candidates explicit consent that they would like a particular agency to represent them?
If only one agency can provide this, then you know who is compliant. If both agencies cannot provide you with this you need to speak to us! Joking apart, at this point, it's best to refer to your agreed terms and conditions and consider the effective cause principle.
Hopefully this article will asssit you in avoiding 'arguments' between agencies, working with truly ethical recruiters and assist you in developing and installing a nice robust process internally that will give you confidence your supply chain is compliant AND competent.
If you would like some free-impartial advice about any agency disagreements, feel free to contact Barry Cullen, a well-respected recruitment agency dispute adviser with no up-front cost.
Alternatively, myself but my advice should not be misconstrued with that of a legal adviser!