Introduction
In the ever-demanding world of professional recruitment, prompt and reliable payment for services is essential. However, the specialist nature of recruitment within the finance sector often brings with it unique challenges when it comes to securing timely payments.
This case study outlines how Federal Management has provided a tailored and highly successful Recruitment Debt Collection solution for a prestigious HR and recruitment company based in London.
Client Overview
The client, a high-level professional HR and recruitment company headquartered in Central London, specialises in sourcing elite talent for finance firms across the UK.
Their reputation is built on decades of experience and a client list that includes some of the most prominent financial institutions in the country. Offering a boutique approach, they pride themselves on precision placements and providing long-term value to their business clientele.
Unfortunately, despite their best efforts and stringent contracts, the firm found itself burdened with a growing number of unpaid invoices for recruitment fees. These outstanding debts were spread across numerous clients, many of whom had used the agency’s recruitment services but subsequently failed to settle their accounts.
The Challenge
Over a three-year period, the HR firm accrued a significant level of unpaid recruitment fees totalling £682,000. These debts were linked to 45 individual commercial accounts, all of which had either defaulted on payments or disputed invoices without valid justification.
The primary challenges faced included:
- Multiple aged debts ranging over a 36-month span
- Clients spread across various UK regions with differing communication histories
- Recruitment fees often tied to successful placements, complicating collection due to variable contract terms
- Existing internal collection efforts had yielded little success, costing the agency time and resources
Enter Federal Management
Recognising the need for professional intervention, the HR firm engaged Federal Management to handle the recovery of the unpaid recruitment fees in the Summer of 2024.
Known for our industry expertise and high success rate, we were selected due to our track record in Recruitment Debt Collection and their FCA-authorised status, providing an ethical and compliant approach.
Strategic Approach
We implemented a structured and strategic debt recovery programme, tailored specifically to the recruitment industry and the financial sector clientele involved. The strategy included:
1. In-depth Case Assessment
A team of specialist Commercial Account Managers conducted a diligent review of all 45 outstanding accounts. This involved:
- Establishing Company status and Financial position
- Analysing contract terms and service agreements
- Reviewing communication histories
- Identifying patterns of dispute and avoidance behaviour
2. Legal Compliance and Professionalism
All actions taken adhered strictly to UK debt recovery laws and FCA guidelines. Federal Management ensured all communications remained professional, compliant and focused.
3. Tailored Communication Strategy
Customised contact strategies were developed for each debtor:
- Initial contact via a series formal letters, texts and emails
- Follow-up phone calls by accredited collection officers
- Positive engagement with a view to payment
- Where necessary, face-to-face field agent visits to assist with engagement
4. Negotiation and Dispute Resolution
For clients disputing invoices, Federal Management deployed mediation tactics to resolve misunderstandings and validate charges. This often involved:
- Clarifying contractual obligations
- Providing evidence of service fulfilment
- Offering reasonable settlement plans where appropriate
5. Escalation Where Required
In rare instances of continued non-payment, the matter was escalated to legal proceedings via our in-house litigation team. However, due to the effectiveness of the initial recovery efforts, litigation was only necessary in a handful of cases.
The Results
The results of Federal Management’s intervention were nothing short of outstanding:
- Total debts recovered: £621,620
- Success rate: 91% of accounts successfully settled
- Number of accounts recovered: 41 out of 45
- Timeframe: Majority of debts recovered in full within 120 days of instruction
The client not only saw the return of a significant sum of money but also experienced relief from the administrative burden and stress associated with chasing debts.
Client Testimonial
“Federal Management have been a game changer for our Company. We had resigned ourselves to writing off a considerable portion of these fees, but their professional and efficient team managed to recover far more than we expected. They acted with discretion and integrity throughout and we will continue to work with them”
Why Federal Management?
Federal Management stands out as a premier choice for debt collection within the UK recruitment sector for several reasons:
- Specialist Recruitment Debt Collection Services: Deep understanding of the recruitment industry, including contingent and retained fee structures
- FCA Authorised and Regulated: Offering peace of mind and a legal, ethical approach
- High Recovery Rates: Proven track record with consistent results
- Dedicated Account Managers: Providing clear communication and personalised support
- Discretion and Professionalism: Protecting client reputation at every step
Lessons Learned and Key Takeaways
This case highlights several important lessons for recruitment agencies and professional service firms:
- Act Early: The longer an unpaid invoice debt remains unpaid, the harder it is to recover. Early intervention significantly improves success rates.
- Use a Specialist: The average debt collection agency will lack the insight needed to resolve recruitment-related debts.
- Maintain Accurate Records: Clear documentation supports faster and more successful resolution.
- Don’t Write Off Debts Too Soon: Professional debt recovery services can achieve results even after internal efforts have failed.
Conclusion
Federal Management’s expertise in Recruitment Debt Collection has proven invaluable for our client, a leading London-based HR firm.
With over £620,000 recovered and a 91% success rate, the partnership demonstrates the power of using industry specialists who understand the nuances of recruitment-based agreements.
For any recruitment agency or professional services firm facing unpaid invoices, Federal Management offers a trusted, ethical, and highly effective solution. Our experience, professionalism, and commitment to results make us a standout partner in the field of recruitment debt recovery.
Need Help with Recruitment Debt Recovery?
If your agency is struggling with unpaid recruitment fees, contact Federal Management today. Discover how our specialist Recruitment Debt Collection services can help your business recover what’s rightfully owed.
