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Tuesday, September 9, 2014

The Absurdity of Recruiters Guaranteeing Candidates For Their Clients





Most candidates are not aware that the recruiters who place them are guaranteeing that they will not leave their new company for a specified period of time. This guarantee is often unconditional. 

How weird is that? 

This kind of guarantee is a double whammy for recruiters.  First, contingent recruiters, no matter how much time they put into a job, no matter how good a job they do, don’t get paid until they make a placement. How often do we spend hours and days working on an assignment only to hear that the job was filled internally or not being filled at all? Second, when we do place someone, we then have to guarantee that the candidate will not leave the company for a period of time, usually three months; this guarantee is usually 100% unconditional.

In reality, this means that we are guaranteeing to the company that no matter what the company does, our candidates will stay.  It means that we guarantee that the job is what we recruited for and that there are no changes from the company.  In other words, the job the candidate interviewed for is actually the job they got (How often do companies change the assignment either before or just after the candidate starts?).  We are guaranteeing that the job responsibilities are as specified prior to the candidate starting (How many calls have we gotten where the candidate tells us that the job is not what was described while they were interviewing?). We are  guaranteeing that the candidate’s manager is tolerable, not a screamer and not offensive. We are guaranteeing that the job hours are bearable (I once had a candidate who was told there would be 40% travel, but discovered it was more like 90%, including weekends; and it was all production, which meant 16 hour days). We are also guaranteeing that candidate’s client, he or she must work with, isn’t mean, abusive or otherwise impossible (How many calls from candidates who say that the agency did not tell them that the client hates the agency? I wrote before about a client who actually punched me!).

If any of these terrible things happen, the company holds us responsible by either asking for their money back or asking for us to begin the search again. This makes no sense.

Over the years, we have had only a handful of candidates leave before the guarantee period is over.  Most people who leave their jobs quickly, do so because of issues with their job. Here are the common things people we have interviewed have told us to why they left jobs quickly:

-       Their manager was abusive
-       The job was not as described
-       The account they were assigned was actually in review when they started
-       The company was completely dysfunctional
-       Company morale was terrible
-       Company expected 90 hour weeks
-       Immediately after starting, had to take a pay cut
-       Too much travel
-       Nasty client
-       Change of assignment, responsibility or authority
-       Company decided to send them to another market or country
-       Loss of account (either theirs or others at the company)
-       Company merged/acquired
-       Responsibility but no authority

A guarantee should only be about performance. If the client has given us accurate job specifications and if we have screened properly, then the candidate should be able to do his or her job.  That is a fair guarantee.  Poor performance is almost never an issue. And in the rare cases where it is so, the company is usually equally responsible (see the above list). I once had a mid-level account supervisor tell me after only her second week that she was over qualified for her job; she felt the job should have been for a junior account executive or a senior assistant account executive. After trying to get more responsibility, she resigned in about sixty days.  Sure enough, the client demanded that we replace the account supervisor with an assistant account executive and then return the money difference to them once the second placement was made!

As an aside, I once had a candidate who was working for about six weeks and he became ill and had to be in the hospital for an extended period of time; ultimately he died.  The client called and wanted his money back. I told my client that I cannot guarantee a person’s health.  As a gesture of good will, I did agree to replace the person at half charge, but the client rejected the offer. (Of course, he used another recruiter and had to pay full price.) Go figure.

Over time, that guarantee has morphed from performance, to become an unconditional guarantee for any reason whatsoever.  That is absurd.  In what other business is the product or service unconditionally guaranteed, even against user abuse?

11 comments:

  1. If I could guarantee human behavior, I'd be in the Middle East right now arranging world peace.

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  2. I could not agree more. However, what I find even more absurd is that many recruiters actually offer their clients a "Money Back" guarantee. I have never been in an industry where the client can abuse or mis-manage an asset and then get their money back for doing so. Now that is real absurdity.

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    Replies
    1. Some businesses are so competitive that recruiters have to do that in order to compete. I think they figure the odds are that the candidates will stay for the guaranty period. Of course you have to ask yourself about the clients that demand money back.

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  3. I've been in temporary staffing for 17 years and we avoid direct placements like the plague. We have a no liability/no refund agreement for our customers that occasionally insist on a direct hire situation. I truly respect what you corporate recruiters must put up with and fell for you and the always looming possibility that you can work for months on a position with no compensation.

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  4. I've had my own contingency recruiting firm for 20 and have only been asked twice to return the fee. The first time I did. The second time I said no and that I would replace the candidate for free. My guarantee is only valid if my candidate is unable to perform the job to which I respond that I didn't make the hiring decision. My guarantee is not valid if the candidate leaves before 90 days if they are unable to work on the account they were hired for, if the candidate is laid off because of an agency wide downsizing, if the client leaves the agency or if their supervisor is replaced. I don't return money and my guarantee of a replacement is only valid for 6 months. I'm thinking of reducing that to 3 months because agencies tend to drag out the search. I don't like guarantees but it is a cost of doing business.

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  5. I have been recruiting for over 20 years and this issue comes up all the time Guarantees!
    A recruiter is paid to present the best possible candidates for their client. The client will make the final decision on who they want to hire. We are not paid to manage the person after they are hired. We have no control over this. What if the candidate we place is exceptional and is promoted or given a bonus? Do we get an additional fee?
    If the client will let the recruiter place the candidate they think is best without interviewing, then a guarantee is in order, however we know that is not happening.

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