The Top 5 Things to Consider When Establishing a Contract

If you’re establishing a contract with a recruiting partner, there are a few key things you need to consider. Today, I’ve got a list of the top five things to think about.

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Today I want to go over the top five things you need to consider when establishing a contract with a recruiting partner.

1. The performance guarantee. This can manifest in many different ways. The following is just one example of how a performance guarantee might work: The firm will present five candidates who meet all of your minimum qualifications within 30 days. These candidates will all be within your compensation range and should be genuinely interested in your opportunity. No matter how this performance guarantee is arranged, it is a great thing to put into your contract.

2. The fee itself. Is the fee flat, percentage-based, or off of total compensation? If your fee is off of total compensation, the key thing is to consider is if it’s well-defined. A lot of retained fee agreements are off of total compensation, so this will be an important thing to consider.

3. KPI—Key Performance Indicators. A KPI is a set of mutually agreed-upon bullet points about the way the search is supposed to go. Personally, I like to put these on a one- or two-page statement of work. These really help to solidify the expectations of the firm by putting them into writing. 

In any case, the most important thing is that both sides agree.

4. Your retention guarantee. If something doesn’t work out with this new hire within a certain amount of time, what are your possibilities with that firm? Will the firm re-recruit for free or for a discounted replacement fee, or will they perhaps offer a 100% money-back guarantee? In any case, both sides need to agree to what will happen in this scenario. 

5. Your non-solicitation clause. This type of clause is found in most contracts, but it’s worth understanding the wording of yours nonetheless. One key thing to consider is when the non-solicitation clause goes into effect. One or two years are the most common lengths for a non-solicitation clause.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.