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Recruitment and Staffing Guarantee

Many experts have estimated the cost of turnover between 1 to 2 times the annual salary of the position. Indeed when talented employees leave a company, the cost is great. This cost is even greater if the employer used the services of a professional head hunter.

In response to the turnover problem and competition in the recruitment and staffing industry, some agencies are now offering a guarantee. Summit HR Worldwide, a California-based $375-million recruitment company, will guarantee the minimum period of retention of an employee it is recommending. That is if the employee that Summit recommended leaves within one year, Summit will compensate the employer. While it could be argued that the causes of turnover lie completely with the employer (bad management, etc.) and beyond the placement agency’s control, you have respect this commitment to service. While I am not sure how prevalent this practice is in North America, one can imagine what could be next if this is a glimpse of the future. Perhaps, there could be contingencies based on the employee’s performance. For example, the recruitment agency pays a penalty or waves the hiring fee if the employee they recommended got fired. It it interesting to speculate the future of recruitment and staffing guarantees.

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