Retention, who’s responsibility is it anyway?


Refund Policy

I’ve been meaning to write this article for a very long time and rather reluctantly I have to confess. I had convinced myself not to share my view on this particular topic especially with the existing employers in the market as well as my clients who I have –so far- been keeping a pleasant relationship with.  I feared the repercussion and potentially getting on the ‘bad side’ of some of the Managers out there.  (Hey, don’t judge me I’ve got bills to pay too).

My client reading this article while on a vacation
My client reading this article while on a vacation

However I feel that it is time to share a point of view I’ve held for so long as a consultant and   a Headhunter working with both employers and job seekers.  I’m secretly encouraged by the fact that most employers and their managers will probably not be reading this article as they savor their vacations out of the country at this time of the year.

The problem with ‘guarantees’ is nothing is guaranteed

Having run my own recruitment firm for so many years now, I found that one of the least-enjoyable parts of the whole process of engaging a client and helping them fill their vacancies is the part where our proposed Terms and Conditions are subject to endless negotiations, scrutiny and emails going back and forth till one party compromises –and usually it’s the recruitment agency- for the sake of getting the ‘ball rolling’ and some work done.  This is all fair and understandable.  However, what continues to dumbfound me till this day is when managers insist on what has become known as the ‘guarantee clause’.  For those of you who are not familiar with the jargon; the guarantee clause is where a recruitment agency commits to the employer that should the employee who has been placed by the agency decide to quit on his own discretion during the first three to four months of his or her employment, then the agency is obliged to find a ‘free’ candidate to replace the one who left.  It get’s even more complicated when an agent is not successful in finding a suitable candidate to replace –or the employer doesn’t seem to like any other candidate you present.  You are then forced subsequently to refund the money you were paid initially for your time and effort.

To add to that, I’ve also observed lately that some employers have become rather creative when negotiating the guarantee clause with some suggesting conditions such as a prolonged ‘6-month guarantee period’ instead of the standard three or four months. With one employer –who will remain anonymous here- even suggesting a couple of years back for the fee to be split in half; where 50 percent is paid in the beginning and the other part at the end of the 6 month just to make sure that the “employee stays in the company”.  I have even come across a client who proposed boldly to “try the employee and pay the agency after they are satisfied at the end of the probation period”.

My 'un-amused look' when a client negotiates the 'guarantee clause'
My ‘un-amused look’ when a client negotiates the ‘guarantee clause’

The truth is this type of clause has become a standard practice in the market and it seems employment agencies prefer to keep quiet and accept it, alas, grudgingly.  The ‘guarantee clause’ recruiters have to commit to has never really made sense to me quite frankly.

What employers assume, and what really happens

The problem I have with this long-standing practice is  that it first assumes naively that an employee joining a new company will naturally stay just because he or she was completely sold during the interview stage about the career prospects in the new company.  This ignores the fact that employees are exposed to numerous elements or incidents during a working day that qualify in their eyes as reasons to make their blood boil, eyes roll up and call it quits.  We’ve all heard them and these reasons can be anything from “it’s been 3 weeks now and I don’t even have an email address, desk or a parking spot”, or “I don’t like how my supervisor speaks to me”, or the very popular “I am so shocked the company is so unorganized and does not have any system in place”.  I personally recall I was on the verge of quitting my job once because my insecure boss wanted to know everything from who I was speaking to over the phone to “why am I having my second cup of coffee already”.  Clearly recruitment agents are oblivious to these incidents most of the time.

3 I.T. Problems: One of the reasons cited by many employees for wanting to quit their jobs which Headhunters like me have no hand in
3 I.T. Problems: One of the reasons cited by many employees for wanting to quit their jobs which Headhunters like me have no hand in

Who’s responsibility is it?

Another problem I have with the guarantee clause is that it is a symptom of a more serious problem which most employers are yet to grasp, that the fact of the matter is; employee retention and engagement is most of the time an employer’s responsibility and not necessarily the recruitment agency who introduced the employee or the employee himself for that matter.  I get the gist of this type of attitude in particular when I’m discussing the topic of employment of young nationals with employers or in public forums and even in the media.  Everyone seems to be trying to figure out why are young local employees difficult to retain? What influences them? How can we influence their parents? And so forth.  The truth is, employers have to own up to their responsibility of ensuring that talent integrates smoothly in their companies, is engaged effectively and is empowered to lead a fulfilling career.  Something a recruitment agent can do little about from a distant office somewhere.