USRN IOR
Rules of Engagement
Effective July 2005 -
Last Update: 11/2/09
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.
First Generation Referrals
A First Generational Referral occurs
when "Recruiter A" refers a candidate to "Recruiter B"
and "Recruiter B" then ask for names from the referred
candidate. If one one or more or the solicited names are placed by
Recruiter B, a fee is due "Recruiter A" based on the "But
For Rule" - "if it were not for the initial referral"
the second or additional candidates would not have been identified.
"Recruiters A" would receive a 25% Fee form "Recruiter
B" for theFirst Generation Referral.
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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