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How To Prevent Clients From STEALING My Workers?

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GetShitDone

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I run a High Ticket Closer Agency that basically provides a sales closing service for businesses.

My closers will close deals over the phone for businesses.

Thus, the businesses have their own "sales department" bringing in the dough by turning leads into clients over the phone calls.

I subcontract out to High Ticket Closers/Experienced Salespeople who close the deals for my clients on a commission basis.

My closers have to be "on-boarded" to each business before selling for them. Meaning, they need to meet the owner, learn the biz, etc.

I'm scared that my clients/closers could just cut me out as the middle man by directly going to each other.

1) Is there any legal agreement to prevent this?

2) Is there anything more then just a legal agreement that could prevent this? (eg. incentive, communication, etc)
 

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GIlman

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For your employees do a noncompete agreement that includes a non solicitation clause that the employee can’t solicit the client to work for them

For your clients included a non solicitation clause that they can’t Solicit your employees to work for them.


This should not be construed as legal advice from me, and I make no Guarantee of the appropriateness of this information for any particular use or purpose.
 

Kevin88660

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I run a High Ticket Closer Agency that basically provides a sales closing service for businesses.

My closers will close deals over the phone for businesses.

Thus, the businesses have their own "sales department" bringing in the dough by turning leads into clients over the phone calls.

I subcontract out to High Ticket Closers/Experienced Salespeople who close the deals for my clients on a commission basis.

My closers have to be "on-boarded" to each business before selling for them. Meaning, they need to meet the owner, learn the biz, etc.

I'm scared that my clients/closers could just cut me out as the middle man by directly going to each other.

1) Is there any legal agreement to prevent this?

2) Is there anything more then just a legal agreement that could prevent this? (eg. incentive, communication, etc)
I am not a lawyer so I will try to answer 2 as both a sales person and business person.

Depends on how your agency works. Do you have any proprietary tools that the sales force have to rely on. Or you are just an agent.

Most of the time your sales force Staff will choose not to undercut you (even if your client propose so), as you are the only source that can provide them with constant business. Well think about it the reason will your clients will to engage temporary sales force instead of employing permanent ones its because they do not need permanent sales force at that stage of their business development-just need a group of sales staff to convert these leads for 4 weeks or so, and it is not in their interest to have permanent overheads for a regular sales force.

So on the business side of the equation, as long as you do not charge a margin that is too high, and you are able to constantly find such opportunities for your sales people, you are safe.
 
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GetShitDone

GetShitDone

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Dec 20, 2012
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Vancouver, Sydney, London
For your employees do a noncompete agreement that includes a non solicitation clause that the employee can’t solicit the client to work for them

For your clients included a non solicitation clause that they can’t Solicit your employees to work for them.


This should not be construed as legal advice from me, and I make no Guarantee of the appropriateness of this information for any particular use or purpose.
Thanks, they're not Employees. They're subcontractors and based in a different country (USA) whilst I'm based in Canada. Would that non compete still work?

Just wondering how "enforceable" these things really are.

I am not a lawyer so I will try to answer 2 as both a sales person and business person.

Depends on how your agency works. Do you have any proprietary tools that the sales force have to rely on. Or you are just an agent.

Most of the time your sales force Staff will choose not to undercut you (even if your client propose so), as you are the only source that can provide them with constant business. Well think about it the reason will your clients will to engage temporary sales force instead of employing permanent ones its because they do not need permanent sales force at that stage of their business development-just need a group of sales staff to convert these leads for 4 weeks or so, and it is not in their interest to have permanent overheads for a regular sales force.

So on the business side of the equation, as long as you do not charge a margin that is too high, and you are able to constantly find such opportunities for your sales people, you are safe.
Interesting points you make there for sure which make sense.

My margin is that I charge 20% ongoing commission of all deals closed.. and I personally take half of that - the other half goes to the closer.

Maybe the closer might get enticed by wanting double, hmm.

Then again, if I supply constant work for them..
 

Jon L

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My overall thought on this is to come up with a good contract, reviewed or written by a lawyer, have both your contract sales people and your customers sign it, and then focus on doing business. Will some people cheat you? Yup. Cry a little, cut ties with them, and move on. Focus on making money.

I'd write into the contract a pre-negotiated fee for your client to take on a closer directly. Various employment agencies do this. Something like a year or so of projected revenue, paid up front.
 

Kruiser

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Non-solicit with penalty in contract with company.

Narrowly tailored non-compete in contract with contractor.

The cross-border thing is interesting. You'd probably want to just go with US law (go with New York or Delaware) if you are going to try to enforce them in the US.

But, at the end of the day, contracts are pieces of paper. It will cost you a lot of money and time to try to enforce them. It will usually not be worth it. The real value of the contracts is to stop people from ripping you off who otherwise would. But if someone does rip you off, it probably makes more sense to just move on.
 
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TKDTyler

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Create a working environment that any other company can’t compete with. Hire people who are in line with the values of your company and who find the work rewarding and fulfilling - people will leave companies because of leadership and culture, but they will also take less salary and pay because of leadership and culture as well.

Change your thinking from “fighting not to lose” into “Fighting to win”

mentality is completely different between the two. Build your business culture so people don’t want to leave. That’s how you retain your workers.

Remember, you’re the lifeblood for them to get new projects to close - it’s a mutual relationship, not one sided. Are your subcontractors in it only for the money or are you providing something that’s greater than monetary value? why work for you vs working elsewhere?
Build trust and loyalty within your culture
 

BizyDad

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Create a working environment that any other company can’t compete with. Hire people who are in line with the values of your company and who find the work rewarding and fulfilling - people will leave companies because of leadership and culture, but they will also take less salary and pay because of leadership and culture as well.

Change your thinking from “fighting not to lose” into “Fighting to win”

mentality is completely different between the two. Build your business culture so people don’t want to leave. That’s how you retain your workers.

Remember, you’re the lifeblood for them to get new projects to close - it’s a mutual relationship, not one sided. Are your subcontractors in it only for the money or are you providing something that’s greater than monetary value? why work for you vs working elsewhere?
Build trust and loyalty within your culture
This is such valuable advice.

I'll take it one step further. Instead of asking yourself how do I keep people from stealing my employees, ask yourself how do I make my company so attractive other employees would love to work for me? Build that company and you won't have to worry about this problem.

Culture is a huge component of that.
 

Grinder20

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This is such valuable advice.

I'll take it one step further. Instead of asking yourself how do I keep people from stealing my employees, ask yourself how do I make my company so attractive other employees would love to work for me? Build that company and you won't have to worry about this problem.

Culture is a huge component of that.
Agreed! People want to work for companies that have momentum and are going somewhere...as pointed out, a company culture, possibly even the status that comes with it. You will worry yourself sick about your salespeople (contractors) and clients ripping you off... it's not worth it or your time (keep in mind it's a very small world and Karma is a bitch). The contracts will help communicate your serioussness, but aren't full proof. At the end of the day people work for you because of you, how you treat them and the opportunities you can bring to the table. If they were able to do it themselves, why wouldn't they?
 

Kid

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For your employees do a noncompete agreement that includes a non solicitation clause that the employee can’t solicit the client to work for them

For your clients included a non solicitation clause that they can’t Solicit your employees to work for them.


This should not be construed as legal advice from me, and I make no Guarantee of the appropriateness of this information for any particular use or purpose.
NCA (Non Compete Agreement) is a way to go in most places.

There are laws in California that make those agreements void.
So i guess that if you hire someone in California then they can do whatever they want.
(As of few years ago, only California had them, as of now i don't know).

I'm also not sure about non solicitation clause and Cali, maybe it isn't void there.
 

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BizyDad

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What if you tried turning this negative into a positive? Write into your contract that if the client hires one of your employees away, you are entitled to a bonus, and a percentage of that person's first year's production. Staffing agencies do that kind of thing.

Expect to lose some of the workforce, and get paid for it.

Now you have a high ticket closer agency/potential staffing service.

I'll bet nobody's doing this right now, so you'll have a huge competitive advantage. Why should someone hire your firm? Because you'll solve their sales problem, and when they've grown big enough, you'll solve their staffing issue.

It also signals to potential clients that you are really confident in your company's ability to close.

Think about it, right now you could maybe provide referrals to prove that your team is good. But other than that they just have to take you at your word.

But if you tell them they have the option to hire your salesperson away from you, that's showing real confidence in your team's abilities.

And it's something the other companies aren't going to do.

Make sure you create great training materials, so you're constantly churning out excellent sales people.

And with it clearly spelled out in a contract that they'll be paying you a bonus, a lot of employers will choose to not hire the person in the first place.

Problem solved.
 

Kevin88660

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Interesting points you make there for sure which make sense.

My margin is that I charge 20% ongoing commission of all deals closed.. and I personally take half of that - the other half goes to the closer.

Maybe the closer might get enticed by wanting double, hmm.

Then again, if I supply constant work for them..
Fifty percent sounds too high. Unless you are providing a lot of assistance rather than just being an agent who plot schedules.

I am a salesperson who often hire part-time marketer on hourly charges. The agent company take 20 percent from the marketer.

The agent company acts as an intermediary and help the surveyors to get more business. I pay directly to the agent company.

The agent does very little other than scheduling and collecting payment. Basically I tell the agent I need someone next week Saturday from 11-6pm. They will find someone available.

From the marketer pov they rely on the agent company to fill up their schedules to make as much as possible. They have very little incentive to save that 20 percent and undercut their boss. It is too much risk to piss off their boss for being cheapskate (arranging directly with me in the future). Since the agent company collects the money, they do not have to worry about none payment since it is the agent company that took up the credit risk of the service user.
 

Kevin88660

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Nothing can save your business from good Economics and business fundamental.

If you provide enough value to the sale people that the service users cannot provide on a long term basis, and your margin is reasonably competitive, that will serve as a good business fundamental.

The economics fundamental is as follow. If your service users only need the sales people for a short period of time, and you are actually matching them with sales people who need sales income every period of the year for a living. They need you to do the match making and scheduling.

But I do not know your service users. If a single company can give what the salesperson want without you, then the economics of your entire business model might be in question. Then you really should consider different profit sharing model with your sales staff, for instance 70 percent of the first $10000 sales then drop to 10 percent for subsequent sales. The reason why tour service users wanted to engage commission only sales people is that they want to “play safe” before spending money on the wrong person. It is highly unlikely that they are interested to hire your salesperson before your salesperson proves himself in sales. After your sales person has proven himself, your margin fell to ten percent, it is very unlikely that any of them want to undercut you at the expense of future goodwill for that small amount of money.
 

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