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.

Print