What Can Go Wrong When Working 

with Third-Party Vendors

The Truth: What Can Go Wrong When Working with Third-Party Vendors. 

third party vendors

We’ve all heard the horror stories of working with third-party vendors. Many recruitment professionals, maybe even you, have been burned by untrustworthy outside sources. 

The truth is — these risks are very real. Many of the stories you hear are valid, such as cutting staffing firms out of the process, falsifying information, and overcharging. So, why would you want to risk working with third-party vendors? 

Even with their bad reputations, third-party vendors can be a beneficial recruitment tool. They have the reach to send you more highly-qualified candidates, bringing your talent pool to a whole new level. Like with anything, you must fully understand the risks before implementing a tool into your strategy. 

Understanding the serious nature of what can go wrong gives you the power to take charge of third-party vendor relationships. As a result, you can effectively adopt third-party vendors into your recruitment strategy to supercharge your placements. 

Here are the risks you need to be aware of when working with third-party vendors:


The information you present to third-party vendors is powerful. You’re sharing clients’ job openings and uniquely specific requirements with these professionals. 

Unfortunately, only 37% of companies have sufficient resources to manage third-party relationships, according to an Opus report. On top of this, not all vendors can be trusted with confidential client details. 

Some will take requisition information and put it to use solely for their own benefit by going directly to your clients with customers. The third-party vendor collects payment and you’re cut completely out of the process. 


Use a trusted vendor management system to track vendor activity. This lets you know the timeline of every requisition sent and keeps all communication in one easy-to-review place. 


Third-party vendors have the same goal as you — place candidates. The difference, however, is often a matter of ethics. You’re looking to maintain a healthy relationship with clients by sending only the most dedicated, qualified talent their way.

Many third-party vendors focus completely on the end goal of placing as many clients as possible to earn more money. To do this, they defer to ‘baiting and switching’ candidates. 

‘Baiting and switching’ refers to the process of referring to a candidate who has the right experiences on their resume and necessary documents, such as H1b visas. Then, they send a different person — the switch — to fill the actual role. 


Discourage third-party vendors from intentional wrongdoing by placing them on probation from any activity with your company. With a management system, you can create an incident report, giving you and your team visibility into each vendor’s reputation. On each incident report, detail what went wrong so you can track and manage when a vendor needs to leave your system. 


As noted above, there are third-party vendors who have money at the top of their minds. Recruitment is about making a quick dollar, not about the quality of candidates or relationships with staffing firms. 

This means you could be paying more than necessary for top talent. And with tight budgets to monitor, overpriced candidates can hurt your overall strategy or are simply not an option. 


Allow all vendors to see submittal rates for candidates to create a competitive market. Vendors can compare their prices to their competitors and also see which requisitions have no suggested candidates. They can then decide if they want to submit in a similar price range or find a candidate for those fully-open positions.

Most staffing firms have no program in place to manage third-party vendors. Relationships are haphazard, and every minute spent on vendor communications distracts recruiters from revenue generating activities. 

iLabor360 allows staffing professionals to partner with trusted vendors, build transparent relationships, and expand their ability to grow.

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