A Brief Introduction About the Recruitment Agreement
Recruitment Agreement also known as a recruiter agreement and recruitment contract, This is a legal document that is drafted when a company or individual decides to hire a recruitment agency. The recruitment agency is responsible for filling the vacant positions in their client’s company by recruiting the best and most talented candidates for a specific job.
A growing company always wishes the best staff for the vacancies; you often look out for recruitment agencies. Finding the best candidates, reviewing their applications, interviewing them, running a background check on them, and selecting the most appropriate client for the vacancy can be a hectic job. To reduce stress, people hire a recruitment agency. Before the two parties finalize the deal, they draft a recruitment contract agreement and sign the papers to get into a safe and legal contract.
Who Takes the Recruitment Agreement?
The recruitment agreement is signed between the client (the individual or company hiring a recruiter) and a recruitment agency (the company offering recruitment services to the client). The contract is drafted by an attorney, but both parties can suggest additional clauses according to their requirements.
Purpose of the Recruitment Agreement
The main purpose of the recruitment agreement is to lay out all the obligations that both the client and the recruiter are supposed to abide by. The contract avoids confusion by specifying the expectations of both parties from one another in a clear format. The contract clarifies the following sections:
- The services the recruitment agency promises to offer to the client;
- The total charges of the services;
- How the recruiter wants the client to pay.
Recruitment services can vary from agency to agency. Some recruiters offer end-to-end recruitment services while others specialize in mass recruitment. This contract will act as evidence of the services the recruitment agency promised to offer to the client. Should there be any misconception in the future, the parties can use this contract to solve the dispute.
Content of the Recruitment Agreement
The contents of the recruitment agency agreement are usually the same. However, minor changes and a few additional clauses can be added with the mutual consent of each party. The following are the important sections that must be covered in the recruitment contract.
- Introduction: It includes the introduction of each party signing the deal. The details of each party, including the name, address, and contact details, should be mentioned on the first page of the contract.
- Services: The recruiter should mention all the services they are willing to provide to the client. They can either offer end-to-end recruitment or mass recruitment. Either way, the clause should specify the services clearly.
- Fees: The fee and payment section describes the payment terms i.e., how the recruitment agency wants you to pay for the services. Usually, the client is supposed to pay when they hire the applicant recommended by the recruiter. However, the recruiter may want to charge a fixed monthly fee for performing interviews, selection tests, background tests, and other such tasks.
- Disbursements: The recruitment agency can charge additional fees for the costs they incurred while executing the recruitment process. The disbursement clause should be mentioned separately in the contract.
- Replacement, Guarantees, and Refunds: Refunds and guarantee section specify the guarantee provided by the recruitment agency. If the candidate hired by the client quits the job during the probation period, the company can ask the recruiter to provide a refund.
- Retention and payment of fees: A sound agreement should have protection clauses that prevent employers from hiring a candidate by themselves. This is to ensure that the company does not skimp out on paying your fees. This clause could also contain a point about the employee being hired by the same company for a small period after leaving the agency. This is because the employee would leave the organisation at the time the company would terminate the agreement with you.
- Taking over the employee: The contract should contain an option about the employer converting the employee to a full-time staff. However, measures could be taken to prevent this from happening as soon as the candidate introduction is done. For that purpose, a clause could be inserted which states that you should be entitled to introduction fees for bringing an employee to the company.
- Terms and Conditions: This section clarifies the obligations of the client and the recruitment agency towards each other. It tells the start and end date of the contract.
- Violation: This section stipulates the compensation a party has to pay, should they breach the contract.
[ Also Read: Retainer Agreement]
How to Draft the Recruitment Agreement?
The client and recruiter can check the recruitment contract templates to draft this agreement. The terms should be the same as the standard recruitment form. But as mentioned before, there can be additional clauses. You can hire an attorney and get the contract verified before signing it. Here are the tips for drafting the best recruiting agreement direct-hire contract.
- The agreement should start with the introduction of each party.
- It must contain all clauses such as the services offered by the recruiter, fee charges, additional cost, service guaranteed, terms and conditions, obligations of each party, contract violation terms, expectations, and so on.
- The parties must consult with an attorney or a legal expert to get the documents verified and approved before they are signed.
- Your agreement should have a dispute resolution clause as well. This clause will help in resolving anticipated problems during the course of the contract. However, for any unanticipated dispute, you could introduce a clause requiring the employer to indemnify you for any actions caused to you or your company because of any action of the recruiter.
The staffing agreement form should be read, understood, and signed by both parties. It is the responsibility of each party to read the terms, understand them, and sign the contract only if they accept all the terms.
Benefits & Drawbacks of the Recruitment Agreement
- Hire a Professional Recruiting Agency: The contract is an indication of a reputable recruiting agency that offers professional services to the company.
- Clarity of the services: By signing a recruitment agency contract, both parties can get a clear understanding of the services the recruitment agency will be offering. Furthermore, it clarifies the expectations each party has from one another.
- Additional Expense: A recruitment agency form is nothing but an expense, especially if the parties fail to abide by the terms.
What Happens in Case of Violation?
There are many clauses that both clients and recruitment agencies have to follow. Failure of any term could lead to the termination of the deal between these parties. Failure to provide the mentioned services, inability to make a payment, and violation of the terms and conditions(1) can terminate the contract.
Every company should draft the recruiting contract form and get it signed by both parties before finalizing the deal. This contract will work as proof of your legal deal.