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Learn What is End Client, Tier1 Client, Tier2 Client, Preferred Vendor, Vendor and System Integration Partners In Staffing

Staffing Companies are all over the world and they are involved in permanent staffing or temporary staffing of candidates. Staffing Companies hire candidates in various industries like IT, Financial, Health care, insurance, education, etc.

As per ASA (American Staffing Association – (www.americanstaffing.net), some 2.0 million Americans go to work for U.S staffing companies every business day and more than 6000 staffing companies are present in USA.

What is Hiring?

Hiring is a process of hiring candidates as per organization’s needs.

Proactive Hiring and Reactive Hiring are two processes by which organizations search candidates for their expected requirements and active (current) requirements respectively.

An Organization may hire candidates on full time/permanent or on contract basis. On Full Time, Candidates will be retained as employees of the organization and on contract; candidates will be working for a particular duration ranging from 1 day through several years. Most of the organizations have their own recruiting team for hiring candidates. If they don’t have recruiting team or if the requirement is difficult to recruit candidates, or if they find difficulty in managing staffing operations, then they approach tier1 clients for their assistance called staffing companies (Also known as staffing agencies, staffing firms, recruiting firms, recruitment agency, consulting firms, talent management firms, talent acquisition firms, talent fulfillment firm).

What is End Client, Tier1 Client, Tier2 Client, Preferred Vendor, Vendor and System Integration Partners?

In our examples or explanation, End Client or End Customer or Client is a company or organization, where software is installed and project implemented or project is implemented with their existing infrastructure or network connection is implemented. To do the above mentioned work, Clients need candidates and they hire them on FULL TIME basis or on CONTRACT basis.

Tier1 Client is one who submits resumes to the End Client or End Customer. They usually are called Preferred Vendors. Actually they are vendors to clients.

Tier2 Client is one who submits resumes to Tier1 Client. Then Tier1 Clients submits that resume to Client. Usually, Clients will not know about Tier2Clients. As per agreed terms, Tier1 Clients receives payments from the client and pays to Tier2 Client.

For client, Tier1 client is the vendor. For Tier1 client, Tier2 client is the vendor.

System Integration Partners: With the client, they bid on the project, satisfy clients, bag the project and implement the project. System Integration Partners hire candidates in their payroll and implement the project or they hire candidates on contract basis and ask the candidates to work on the implementation. If they are not able to hire the right candidate, then they approach staffing companies.

While it looks easy when read but many a times we face challenges from candidates, clients as well as vendors. Recruiter should be wise and very careful in choosing the right candidate for his requirement by taking the following worst situations into account.

Difficult situations arising from Candidate’s side:

·     Candidate may accept several offer letters from many employers including your company. For their better prospects they will not join with your company. Whatever money and time that you have spent will be wasted.

·     Candidate may back out for no reasons after the client interview. After the client interview, candidate may back out by giving some false information. They will not take your phone calls or reply to your emails.

·     After joining the client few candidates may not like the working environment (Infrastructure). Hence they will come out of the project.

·     Candidates may back out if clients ask them to work in a platform, where they are not comfortable.

·     While joining, candidates might have confirmed that they will join on contract to hire but later they won’t join.

·     Some candidates may submit fake resumes.

·     Some candidates are very clever and they may talk to two different recruiters working on the same requirements, and whoever gives the higher rate, they will submit resume to that recruiter.

·     Candidate may lie about their VISA status.

·     Candidate may ask someone to take the telephone interview call on behalf of them.

·     Candidate may tent to bypass you and try to reach tier1 client or client or directly if they come to know about client details.

·     Candidate may lie about their legal stay in USA and provide false information.

·     Few candidates may provide fake educational certificates, fake offer letter and relieving letter etc.

Difficult situations arising from Client’s side:

·     Client may change same requirements by altering few skill sets very often.

·     Client may select and confirm the candidate. Later they will change their mind due to some reasons and not choose to hire that candidate.

·     Client may interview the candidate other than listed job description/skills on the requirement.

·     Client may not pay billing rate/hour as the contract terms. Client may cheat in payments.

·     Client observe the performance of the candidate for a period and if they are not satisfied, they will fire (let to go) the candidates.

·     Some of the hiring managers from the client side may have some link with the staffing firm and they might share relevant interview questions and answer, by which candidates prepare themselves for interview. Later they will be hired by the hiring manager of the client. Some strong candidates may not be selected.

·     Client’s hiring managers start their own staffing firm and the other staffing firms submit resumes to the hiring manager’s staffing firm. Then the hiring manager’s staffing firm submits resume to the client. So a hiring manager will get salary from the client as well as the profit from their staffing firm.

Difficult situations arising from Staffing Firm’s side:

·     Staffing Firms may fake candidate’s resume and submit according to the needs.

·     Recruiters/recruitment managers may not read the requirement properly, and submit resumes which may not match the requirements correctly.

·     Get X rate from client and convey Y rate to their w2 employees, who are working on hourly or percentage basis. The difference between X and Y is their additional profit.

·     Will not pay salary or incentives to employees as agreed earlier.

·     Will not legally buy Microsoft Office or any other software and they will be using pirated version.

·     Will use utilities that are not legal. Using VOIP phones and using them for international long distance calls are not legal in certain countries.

·     Will say that they are employee focused but may not provide better salary hike to some recruiters and for no reason, they will suppress strong recruiters.

·     Will say that there should be no comparison about salary package among recruiters but then and there they will compare recruiters.

·     Will say there will be salary increase every 6 months, but they will not honor their commitment. They will give salary increase after 12 months.

·     Will support employees they like. Example: There may be a dispute between a recruiter and accounts manager. Recruiter may be correct in his discussion, but they will support the accounts manager since they get more revenue from accounts manager.

Other situations:

·     Accounts Managers, Sales Manager will not take the responsibility for BACK OUTS. They will put the blame on recruitment team.

·     Some recruiters are lethargic and will not source resumes. They will work only on past/recent submissions submitted by other recruiters.

·     Contract Team will be very slow in signing the agreement.

·     Finance Team will not send payments on or before due date to vendors.

·     For some reasons, vendors would have forgotten about some payments. Finance Team will not try to pay the money honestly to those vendors.

·     Recruiter may type some incorrect information and it will lead to problems.

·     Recruiters will not 100% dedicate to work.

One Comment

  1. Susan

    Excellent article. I am facing some of these issues as well..


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