To Guarantee or not to Guarantee – that is the question? (apologies to William Shakespeare)
In addition to the recruitment of talent, most agencies offer guarantee periods. If the hire doesn’t work out, the client does not pay or the recruiter starts the search again free of charge, if they have been retained. With some agencies the client can negotiate on fees, with others guarantee periods, with some both. Negotiations can also occur when the client hires volume through the agency or the agency is negotiating with a potential new client.
Guarantees are generally used by agencies as a marketing tool to try and add value to their clients in the recruitment process and to differentiate themselves from their competitors. In real terms, one simply cannot guarantee a human being’s performance and this practice needs to be re-thought.
In the sourcing process agencies have control over certain things, such as ensuring that the right skill set has been sourced which best matches the job specification; ensuring that all information, which has been presented to a client, is accurate and correct and that all credit, criminal and education checks and references have been done. However, they simply do not have control over many other variables, such as how a business treats new employees or if a role was incorrectly sold to the candidate at the interview stage. Agencies do not have any control over these or any other external factors that may impact an employee’s longevity or performance when they decide to join a new business.
Life happens and, unfortunately, humans cannot help but be impacted by the world they live in. How do you judge an employee who happens to join a business and the very next week his house happens to be burgled, or maybe a family member passes away and what if their spouse happens to get a transfer overseas? All these influences clearly can effect performance, but how could the agency who placed the candidate ever foresee or have any control over these occurrences? The way guarantees are currently set up in the marketplace is that recruitment agencies currently take on the full risk should a candidate not deliver when they take up a new role and need to replace the candidate should they “fall off”.
The recruitment process is a highly time intensive and expensive undertaking. Many agencies often work roles for free in the hope of a fee down the line should they be successful. Currently, many companies also tie these guarantees into a probation period of the candidate which means many agencies will only get paid once this probation period runs out.
It really is time that the market has a re-think around the practice of offering guarantees on placements. Humans are not like products, where you have control over their manufacturing process and are able to rectify defects. Companies need to also take more responsibility for the hires they make. It is their obligation to ensure that the recruited talent stays with the business. Companies need to ensure that a proper recruitment process is undertaken when hiring. Furthermore they must ensure that those who are handling the process within the company are skilled enough and have the necessary experience to make the proper hiring decisions. (Companies need to conduct a proper on boarding process)
A possible solution is for employers to form better partnerships with their recruitment suppliers. Long standing, honest and robust partnerships with agencies will always yield better success, rather than to focus purely negotiating longer guarantee periods and lower fees. Hiring of the best talent will always be critical to any business’s success, so the relationship that is built with a recruitment partner is a very important one.
It has be proven many times over that matching culture is key to all long term hiring success, especially at the more senior levels within an organisation. Any agency worth their salt want the best hires for their clients and very much desire partnerships where they can learn the culture and the various nuances of their client’s business. This partnership approach will always be more beneficial for both parties in the long term. The market needs to move away from focusing purely on often divisive recruitment guarantees.