USRN IOR Rules of
Engagement
Effective July 2005
Definition
An interoffice referral (IOR) is the acceptance
of job order(s) or candidates from one member to another office.
Origination of an IOR
An IOR originates with a phone call from the referring
member to the principal contact of the receiving member.
Acceptance of Referral
Once the IOR has been accepted by phone, it must
be followed by either a written IOR or an electronic confirmation between
the members offices. In addition, once an IOR has been accepted it cannot
later be rejected on the grounds that it is a Job Order that the receiving
member already has.
Rejecting an IOR
An IOR job referral may be rejected if the receiving
member is actively working on the Job Order or has had contact with the company
regarding the job order in the past 30 days. An IOR referral may be rejected
if it is inconsistent with the Rules of Engagement.
Terms of the IOR
All special arrangements must be outlined by the
referring member to the receiving member and must include all guarantees,
any unusual circumstances, payment terms and currency, and the percentage
of the split must be stated and accepted during the phone conversation and
on the written or electronic IOR.
Arbitration
All IOR disputes will be resolved by arbitration
under the IOR Rules of Engagement. In the event of arbitration, each party
would be provided the opportunity to state their case - in writing, with
full documentation to a committee of five current members, with rotating
twelve-month memberships.
The committee would be the sole arbiter of any
disputes and would be responsible for "reviewing both sides" prior to a vote
on the subject at hand.
Once a verdict is rendered, the verdict would be
final and binding to both parties.
If one of the parties refuses to abide by the ruling,
they would be subject to being banned from membership.
In no event should anyone have the right or privilege
to sue under the terms of the agreement.
Members must accept the committee's ruling as final
and "disbarment" will be the only penalty that can be used as a weapon against
unscrupulous members.
Guarantees
The referring member must inform the receiving
member of the guarantee terms quoted to the client (whether verbally, in
a written proposal or by amendment to standard terms and conditions of business)
and clearly stated on the IOR form. Rejection of the terms of guarantee clause
is a rejection of the IOR and must be done immediately. Any changes made
to the guarantee once the assignment has commenced must be mutually agreed
upon by both parties and confirmed in writing.
Guarantees shall be observed at all times. Information
received from one firm shall not be disclosed to any other firm with out
consent of the originating member firm
Guarantees shall be honored fully; each firm shall
remit their portion of the fee (refund) within five (5) calendar days after
notification of liability. The member with the Job Order shall coordinate
the refund or replacement process
Changes to the Split
Agreement
In the event the client fails to confirm the fee
as cleared by the referring member, the receiving member may call the the
referring member in an attempt to renegotiate the split arrangements. Changing
the split arrangement requires the agreement of both members, and must be
accomplished within two (2) working days of the referral. After the two (2)
working days, the percentage of the split agreed to remains in effect under
all circumstances. There can be no later renegotiations of the split percentages.
Referral of Job - Not Company
The referral of a Job Order from one member to
another is the referral of a specific Job Order(s) and not the referral of
the company. In other words, if a placement is made, the referring office
will only be entitled to a split if the specific Job Order(s) referred are
filled.
Exception
If a candidate is presented by the receiving member
and interviewed for the specific Job Order(s) referred, and is hired for
another position by the company, a split is due on that placement, but only
if no split resulted from the specific Job Order(s) originally referred.
If more than one (I) candidate is hired under these
circumstances, only one (1) split will be due on whichever position first
resulted in a placement.
Additional Job Orders as Result of
Placement
Other than as provided in the foregoing exception,
the referring member will not be due a split if other Job Order(s) are developed
and subsequently filled as a result of the original referral. Other Job Order(s)
developed may be referred to other members, but the specific original referral
cannot be referred unless the originating member gives permission and split
arrangements are clarified and agreed upon between the new receiving manager,
the original receiving member and the original referring member. If this
is not done and a placement results, the fee split is due between the originating
member and the placing member.
Splits on Additional Openings in Specific
Job
If the specific Job Order(s) referred indicates
more than one (1) opening, the receiving member will owe split fees on all
placements made on the specific referral(s) up to and including the number
of openings specified. The exact job titles and the specific number of openings
must be clearly indicated on the Job Orders and the IOR form.
Job Board Posting
A receiving office shall not post an referred position
or referred candidate on any electronic job board without the prior express
approval of the referring office.
Candidate Referrals
The member referring a candidate must have interviewed
the candidate prior to preferring the candidate to the receiving member and
must attach the candidate's current resume to the referral.
When referring a candidate to another recruiter the referring recruiter has ownership of the candidate for up to one year from the date of the referral. To be enforceable the claim of ownership must be clearly stated in the referring candidate split-agreement.
If a candidate is accepted by a referring office
and is subsequently placed in any position with any client company within
12 months of the referral, a split is due the referring office. The participating
members, prior to the referral of the candidate, must negotiate the split
arrangement (fee, terms and guarantees).
The split due the referring member should be dependent
upon the level of qualification of the candidate. A fully qualified candidate
(one who has been interviewed in-depth and reference checked) should be worth
more than the referral of a resume found on the Internet, or unsolicited
who has never been contacted.
It is the obligation of the referring office to
disclose the 'level of qualification' of the candidate to the receiving office.
Split fee arrangements should be documented on the IOR form.
If no split fee arrangement is documented on the
IOR form, a split will be assumed as follows.
For an international IOR, on unsolicited candidates.
20/80 split will be assumed, unless an alternate split is negotiated. (The
20% split on the fee will be to the member referring the candidate subject
to the candidate being fully qualified.
If the candidate is not qualified and has been
identified either as a result of being found on the Internet, the fee split
should be 10/90 with the member referring the candidate receiving 10% of
the fee.)
Under most circumstances, a 50/50 IOR split will
be assumed. The receiving office is responsible for checking if the candidate
is on their database prior to the acceptance of the referral. After agreeing
to accept a candidate, an IOR cannot be rejected later because the candidate
was already in the receiving offices database or known in the receiving
office.
Splits on Candidates Referred in the
Past
Often times an IOR candidate is not placed by the
receiving member and goes into their database. That database record must
indicate that the source of the candidate was an IOR, the date received and
the name of the office that referred the candidate should be logged.
If this procedure is not properly executed problems
and hard feelings can arise For example; you requested help from a
fellow member to fill a position. In that process you received a resume of
a candidate but that candidate was not hired. Technically that candidate
belongs to the sending member for a minimum period of one year During
that year you develop an job opening that fits the candidate - so now what
do you need to do:
1) Prior to calling the candidate and discussing
the opportunity you must call the referring office FIRST in order to ascertain
if they have their candidate currently interviewing with a client. The
reason being, we don't want to jeopardize that opportunity.
2) However, in most cases their reply would likely
be no. But, in the event they do, you then need to ask permission from
the referring member when they can actively work your
candidate.
Another problem can occur if the the receiving
member receives a Job Order/IOR and a search of their database matches an
IOR candidate with the Job Order/IOR, there are 3 ways the situation can
be handled:
1. The receiving member should call the original
referring member and apprise him/her of the situation and attempt to work
out an equitable agreement. If a satisfactory agreement is obtained, call
the sending member of the IOR and inform him/her of the situation stating
what the receiving and referring member are willing to do in the event a
placement is made. There must be a three-way agreement among the managers
involved. If this cannot be negotiated, the candidate should not be referred.
2. Call the member who sent you the Job Order or
Candidate Request. Tell him/her you have a candidate referred from another
member who fits the specifications. Determine what split the manager referring
the Job Order or candidate request will accept. When this has been negotiated,
call the the original referring member. Explain the situation and the split
arrangement negotiated. If all three agree on the proposed fee split, refer
the candidate. If agreement cannot be reached, don't refer the candidate.
3. The suggested alternative is to call the member
who referred the candidate, apprise him/her of the potential "fit" and details
of the member who submitted the IOR, Job Order, or Candidate Request and
then step out of the situation completely.
The two most common arrangements
are
1. Fifty percent (50%) to the placing office,
twenty-five percent (25%) each to the other offices, or
2. 1/3 to each office.
Things to remember
1. This situation may take negotiation, but it
can be worked out if handled professionally.
2. This must be handled by managers only.
3. Unless an agreement can be reached by all parties
involved, the matter should be dropped.
4. There must be written documentation of the
negotiated split arrangement, signed by the manager of each office.
5. Should the "middle" office refer an IOR candidate
without negotiating a satisfactory three-way split arrangement, they will
not be entitled to any part of the fee.
6. Clarify responsibilities for refund or replacement
guarantees between IOR partners.
Rejecting a Candidate
Referral
An IOR candidate may be rejected if the candidate
is not a "fit" and the rejecting office has no intention of maintaining the
candidate in its database.
An IOR candidate may also be rejected if the requesting
member already has the candidate in its database and the candidate's current
resumes on the file at the time of the referral, and has spoken with the
candidate within 90 days prior to the date of referral.
However, if agreed upon by both members, a receiving
member may accept a referred candidate on a "this job only" basis, even though
the candidate was already in the receiving offices database but was not
identified previously for the Job Order.
If the candidate is placed on the open job by the
receiving member, a fee may be split. If the candidate is not placed on the
specific Job Order, the candidate would not be considered a referral
for future placements.
Guarantees for Referred
Candidates
Both members must be in agreement on a client's
fee payment and guarantee terms, as well as the split percentage between
the offices. The guarantee offered to the client may be a full or partial
refund, credit note or a free replacement guarantee.
If a refund or partial refund is due a client on
an IOR placement, both members are collectively responsible for refunding
the fee. If the refund is a full refund, each office will fully refund its
share of the fee. If the refund is a partial refund, each office will refund
the appropriate percentage of its share of the fee.
If the client is due a free replacement candidate
or credit, the office who referred the candidate is responsible for providing
a suitable replacement.
If, for some reason, the receiving office who referred
the candidate does not provide the "replacement" candidate who is subsequently
hired by the client, the receiving office must return their share of the
fee to the referring office.
Example
Member A requests an IOR candidate from Member
B. Member A places that candidate and splits the fee with Member B. The candidate
is terminated, and Member A owes the client a "free replacement" candidate.
Member A re-fills the position with either their own candidate or an IOR
candidate from Member C, and Member B should return their share of the fee
to Member A.
Notification to Referring
Office
The member making the placement (i.e., making the
candidate presentation, managing the hiring process and closing the placement)
must notify the referring office immediately upon confirmation of the placement.
The referring office should immediately invoice the placing office for its
agreed upon share of the fee.
Sending the Invoice to the Client
The member making the placement will invoice the
employer-client and retain its prior agreed upon share of the total fee collected
or the relevant stage payment where a retainer has been closed.
The member referring the original job order will
receive its agreed-upon share of the total fee collected or the relevant
stage payment where a retainer has been closed once payment has been received
by the receiving member. Payment will be made in accordance with the terms
as stimulated in the payment to referring member below.
Payment to Originating Member
Payment of the agreed-upon split is due the originating
member within thirty (30) days after receipt of the fee by the placing office.
Refunds
In the event of a refund, credit for future placement
or replacement made by another member, receiving member shall call the referring
member and explain the circumstances. A letter of confirmation stating clearly
the relevant details should follow. The referring member must send its portion
of the refund due to the placing member within three (3) days of the call
requesting the refund check. However, this is only due when it occurs within
the original guarantee as it appeared on the IOR form.
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