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Buyer beware, questions to ask a recruiter before you hire them.

buyer beware
Recruiters, Employment Agencies, Headhunters, Staffing Agency, Temporary Agencies and Executive Search Firms, all have one thing in common, they want your business! The number of companies in Canada that provide candidates or employees to organizations in Canada can be staggering.  A Google “Recruiter Canada” search yields 12,500,000 results.  You probably get dozens of agencies contacting you, telling you that you should pick them because they are the ones to be trusted to meet your staffing needs. How do you weed through the sales tactics and invest the recruiter that is right for you? Chances are you value your investment, protect it by asking the right questions because the consequences of choosing an agency that does not follow the rules can be costly.
Here is a quick overview of 4 questions you should ask before signing on the dotted line:
1.       Is the agency  in compliance with the law, i.e. do they have a license to recruit?
Employment Agencies are regulated in British Columbia, Alberta, Manitoba and as of 2013 Saskatchewan. These provinces require Employment Agencies to obtain and maintain a license for each province they do business in. Nova Scotia requires licensing of Agencies that place Temporary Foreign Workers, but not those dealing with Canadian Employee Recruitment. The possession of a license indicates that the recruiter is knowledgeable about employment law and values compliance with regulations in Canada.
The consequences of utilizing an unlicensed recruiter can be costly:

 In 2012 Denny’s Restaurants in British Columbia were sued by current and former employees who were recruited by the unlicensed employment agency for $10,000,000.  The recruiter had was unlicensed and misrepresented information to both the clients and the candidates. The recruiters failure to comply with and advise their client on provisions of the Employment Standards Act and Regulation led to the law suit. The recruiter misrepresented the opportunity at Denny’s to employees result Denny ended up settling the lawsuit paying is over 1.3 million in settlement, hundreds of thousands in legal fees and received over a year of negative press.

In British Columbia there are over 6,000 employment standards complaints, a similar number of human rights complaints and thousands of legal actions that are typically settled before proceeding to the courts. Exact figures are not kept for most provinces but it safe to assume there are over a hundreds of thousands of lawsuits, employment standards and human rights complaints every year in Canada on Employment related matters that licensed Recruiter could and should insulate you from them.
If an employer is in a Province that does not require licensing, a recruiting agency is still required to comply with Employment Standards and Human Rights Legislation in that province. Ask questions about their knowledge of this legislation and how new employees are trained in learning about the legislation.
2.       What are their areas of experience/specialization?

  • Does the recruiter you are considering have experience in the industry? You would not buy a house from someone who sells cars, so why would you hire a recruiter who knows nothing about your industry.
  •  What type of positions and level which you would like to recruit? Check out the recruiter’s website what positions are they currently hiring for. If they are similar to yours chances are that they will have a better understanding of your needs.
  • It is standard practice to ask for references before hiring employees, if you are putting your recruiting into the hands of a 3rd party you should be asking for references, especially if they are asking for a retainer up front. A quick call to someone in your industry who has had success with the recruiter and hopefully over several recruits over many years will give you a good idea of whether the recruiter is all that they say they are!

3.       Does the company/individual recruiter have insurance, are they incorporated?

  • Do they have Error and Omission insurance? The average employee costs in Canada $47,580 per year, before employer paid payroll contributions, and most employment related legal problems arise from the hiring process.  Omitting important information about the future employee this could result in a very expensive lawsuit.  Similar to any professional service performed for an organization, as a contracted professional the recruiter should have Error and Omissions insurance.
  • Is Recruiter incorporated?  A recruiter will be the first point of contact with a potential long term top employee so make sure they are professional and able to represent your brand.   An individual who is serious about your best interests will have covered their bases and will not just be running the business out of their basement.
  • What are their company policies? A good recruiter will comply with Provincial Health and Safety Guidelines, have and Workers Compensation Board number and hold General Liability Insurance.

4. Does the agency’s code of ethics match your companies?
What code of conduct or ethics policy does the Recruiter have in place? Because recruiters often work in very competitive environments, it is important that they have some solid guiding principles.

  • A good test of ethics is to ask them about their placement policies. A good Recruiter would never recruit anyone they have placed before or recruit from current clients.
  • Ask them to provide an example of a time where a candidate or client misrepresented themselves, the response will provide a very telling account of their integrity and ethical conduct. It is important that they are conscious of the need present information accurately as possible so both Candidates and the Employer can make the right decision.
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