Kellie G. Olah
HR Huddle columnist Kellie Olah is the practice management and human resources consultant at Veterinary Business Advisors. The company provides legal, human resources and practice management services to veterinarians nationwide. Olah is a certified veterinary practice manager, a certified veterinary business leader and a nationally certified senior professional in human resources.Read Articles Written by Kellie G. Olah
Not so long ago, industry observers debated whether we had an oversupply of veterinarians or excess capacity. Over the past few years, though, the profession has undeniably suffered from a shortage of veterinarians. So, how can clinics find enough qualified professionals to serve clients and their pets? One solution is to use a recruiting agency.
Recruiters save practices time and money by matching qualified candidates with hospitals looking to fill job openings. A recruiter finds suitable candidates and screens them to ultimately identify the right person for a particular practice.
If you’re considering working with a recruiter to meet your hiring needs, you should set your expectations first and then review the terms, conditions and fine print of any agreement before signing it. You also need to understand the services provided. For instance, will the recruiter conduct pre-interviews, schedule your interview and conduct a background check?
Let’s examine the recruitment agreement, services and costs.
Recruiters use different methods to locate job candidates. Some contact veterinary schools or have a strong social media presence. Others might advertise openings or cold-call employed veterinarians located within the practice area. The last tactic is known as poaching. Keep in mind that veterinarians who jump ship can’t breach noncompete and non-solicitation clauses in their current contracts.
A negotiated, legally binding arrangement between a recruiter and veterinary practice governs the services provided. The document typically focuses on identifying qualified candidates and introducing them to the practice. In exchange, the clinic generally pays either a contingency fee, which focuses on the end result, or a retainer fee, which involves the process.
If the recruitment agreement calls for a contingency fee, the agency usually won’t be paid until a suitable match is found. No fees are due until the day the introduced candidate accepts the position with the clinic.
The contingency fee can range from 10% to 30%, which is typically calculated based on the new employee’s accepted compensation. However, first-year compensation can vary tremendously in the veterinary industry depending on whether the employee was offered only a salary or is eligible for production bonuses. Consequently, when reviewing the terms of the recruitment agreement, understand what the percentage encompasses.
Choosing a recruiting agency that charges a lower percentage might not always be the best choice. You could, for example, hire a recruiter who receives a contingency fee of 25% of the base salary, or you could choose another agency that takes 20% but includes any production bonuses in the calculation. Compare your options.
Sometimes, a recruiting agency will ask for a one-time flat fee, or retainer, ranging from $5,000 to $10,000. Consider the cost a down payment on future services. It likely is part of an a la carte list that includes placement fees (successful hiring of a candidate), marketing fees (advertising on multiple platforms) and guarantee or replacement fees, as I will define later. Now, what happens if the recruiter’s search isn’t fruitful or the agreement is about to expire?
Term, Termination and Refundability
Most recruitment agreements carry a one-year term. If the agency you hired charges a contingency fee, your financial responsibility would be zero if the recruiter is unsuccessful. But what about agencies that collected a fee upfront? Would you be reimbursed? Could you roll over the fee to another search? The short answer: See what the agreement says about refundable fees. Most one-year recruitment agreements state that the retainer fee is not refundable since it covers work done even when the search fails. The same is true with marketing and advertisement fees.
Some agencies require exclusivity, a common condition if the company specializes in veterinary recruiting. This means you cannot engage another agency to recruit on your behalf.
If you go the exclusivity route, negotiate the agreement to include these clauses:
- Exclusivity applies to a predetermined timeframe and for specific positions listed in the agreement.
- You can pursue candidates on your own.
- You can terminate the agreement if the agency fails to find a suitable candidate.
Candidate Ownership and Introduction Fees
A recruiting agency agreement should call for no fees if the company introduces you to a candidate with whom you are connected, perhaps because:
- You spoke with the candidate before the recruiter’s introduction.
- Another recruiter introduced you to the candidate.
- The candidate approached you directly.
So, what happens when, in the fast-paced world of recruitment, two agencies claim to have introduced the same candidate to a practice and both demand an introduction fee? Unfortunately, this situation is fairly common. A veterinary practice faced with the prospect of paying two introduction fees, perhaps totaling 50% of the candidate’s remuneration, might not extend a job offer. Such an outcome works in nobody’s interest because the practice doesn’t hire the suitable candidate, the candidate doesn’t get the job and neither recruiter receives the introduction fee.
Note that most firms include contract language stating that if they submitted a candidate who wasn’t hired in the short term but later went to work at the hospital, the recruiting firm would be owed the commission.
Guarantee of Hire and Replacement Candidates
The contract you sign might require the agency to replace a hired candidate who left the job early under certain circumstances. Alternatively, the recruiter might refund the recruitment fee if the candidate departs early, such as during the probationary period. However, the recruitment guarantee or fee refund might not apply if the candidate leaves because the employer changed the job description substantially.
What happens if a recruited candidate turns out to be a bad fit or resigns after a few months? Would you get a replacement? Certain firms offer a guarantee of hire for an additional fee. If the candidate is terminated for misconduct or performance issues during the first year, the firm will conduct another search at no extra cost.
Seek Legal Counsel
Hiring a recruiting agency can mean navigating multiple and sometimes tricky legal questions. Therefore, I encourage veterinary practices to consult with an attorney to understand the agreement’s terms fully and to make sure they are protected before signing anything.
A competitive salary and generous employee benefits might not be enough to lure a veterinarian to your practice. “We saw a company offering a car upon hire of the veterinarian, and we have seen sign-on bonuses range from $50,000 to $100,000,” said Stacy Pursell, the founder and CEO of The Vet Recruiter.