Recruiting Services – Understanding a “Guarantee”

Establishing terms for contingency recruiting contracts usually comes down to two main factors, the “fee” and the “guarantee”. We’ll address the guarantee today.

Most candidates are unaware that their recruiting firm, for the most part, works on 100% commission and is not paid until a new hire has reached “guarantee”…anywhere from 30-90 days (sometimes more) from their start date.

The majority of contingency recruiting agreements include a guarantee clause, which was originally intended to address rare instances of poor performance or disconnect (misrepresentation by a company, candidate, or both). At Redfish Technology, we guarantee our candidates fully for 30 days…if anything should happen either on our clients’ or the candidate’s end within that time, we’ll offer a full refund or replace the candidate, whichever our client prefers.

What was meant to serve as a reasonable accommodation has morphed into an unconditional assurance that regardless of the circumstances, recruiting firms are being held responsible for any cause in the event of a resignation or termination of employment. At the end of the day, recruiting firms have very little control over the working relationship(s) and environment created by company & candidate.

Some examples we have heard from people over the years, none of which were a reflection of a recruiting firm’s service:

– Company hired a candidate to do a contract job (under the guise of a full time position) and then let her go on day 88 of a 90 day guarantee.
– Candidate hired as software engineer was put into a QA role.
– A hiring manager left before a candidate started their new position.
– An abusive hiring manager.
– The hiring company was suffering from undisclosed financial/legal distress.
– Company morale and/or reputation turned out to be terrible.
– Undisclosed travel (50%+, international vs regional).
– Pay cut shortly after joining the company.
– Change of scope, responsibility, title of role once employment was started.
– Company was merged/acquired.
– Company retracted their commitment to process a visa transfer/sponsorship.

The decision to hire or not hire is up to the company, and good companies take ownership in keeping their employees happy – that cannot be part of a 3rd party recruiter’s job.

A good contingency recruiting firm should find you high caliber candidates, facilitate and manage them through the interview & screening process, and give you the best odds to hire those who you ultimately want to bring onto your team. If they can’t do that, they don’t get paid.

Written by: Jon Piggins, Director of Business Development – Redfish Technology

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