As a business grows, so does its need to recruit new employees that’ll keep up with constant customer demands. However, hiring can turn into back-breaking and nerve-wracking work without warning, and for numerous businesses, things are becoming even tougher.
Some of these businesses are turning to recruitment agencies while others are searching for solutions on their own. If you fall into the first category, before making the first steps you should understand what a recruitment contract is, what its crucial parts are, and how it can benefit your business.
Although contract-based employment is more common nowadays, many people are still unfamiliar with the most important ins and outs of this type of involvement. Also, somewhat confusing jargon does little to solve this issue. That’s why we’ll start with the basics and clear up confusion around contract recruitment while sticking to simple language.
A recruitment contract is a documented agreement that takes place between two parties, a recruiter and a client who’s looking for recruitment services provided by a recruiter. Under the terms of service, a recruiter should provide suitable candidates to meet the staffing needs.
A recruitment agency takes control over sourcing, screening, and communicating with selected candidates on the client’s behalf. After all conditions of a recruiting agreement are met, the contract is considered completed. For instance, if a client contracts a recruitment agency to appoint five difficult-to-fill positions, the contract is over when this occurs to the satisfaction of both parties.
It’s also worth noting that a contract recruiter in such cases is likely to get paid a percentage of recruitment fees as a retainer. Usually a client would pay another percentage at a certain stage of the recruitment process and another percentage once a candidate is given the position.
Needless to say, the precise payment details are open to negotiations between an agency and a client before the contract is created and signed.
Although the terms “contract staffing” and “employment” are at times used interchangeably, they differ when it comes to their recruitment strategy.
Permanent employment is sometimes seen as preferable for the employees since it has more long-term plans for them, offering other special employment-specific benefits such as severance pay which isn’t available with short-term contracts. Also, if a company’s goal is to create and maintain a strong team identity or to deal with any sort of sensitive data, then an employment model is a preferable alternative.
On the other hand, while contract staffing might not seem as stable as employment, it’s widely regarded as a more flexible model and a swift solution for solving labor shortages, outsourcing less complicated jobs, or finding substitute essential employees for a short time.
Contract staffing is often seen as a model that carries fewer risks for an employer or an employment agency while allowing their employees more freedom to switch between employers and look for more profitable opportunities.
With a recruitment agreement, an agency can clearly define its and its client’s responsibilities and make sure that everything will go according to the mutual agreement.
Some of the central points every recruitment agreement should cover are:
Also, it’s important to keep in mind that like most contracts, recruitment agreements can be subject to interpretation under state law although they aren’t governed by any precise federal law.
Although most employers are capable of finding contract workers on their own, collaborating with a skilled recruitment agency often comes as a more effective method. Well-versed and well-connected contract recruiters should have an expansive database of recruiters available for hire whenever the need arises. This can considerably reduce the reaction time and shorten the overall recruitment process.
Also, an organization working with a recruitment specialist can benefit from gaining access to more skilled workers which can significantly boost the business during periods of stronger demand. Since the contract recruiters themselves are there for a short period, their contracts will soon come to an end. This removes the long-term commitment linked to traditional hiring and lightens the administrative burden connected with permanent hiring.
While the specific terms or articles required in a recruitment contract vary by country, state, and type of employment, these terms and conditions typically form the core of these types of legal documents.
Piecing together a recruiting agency contract can feel intimidating at first, but by separating what needs to be included from what doesn’t, you’re already stepping in the right direction.
According to the law, a recruitment contract has to include the following contract terms and conditions:
In addition to this, you can also add clauses into your contract on several other issues such as protection of sensitive data, monitoring, special rules and procedures, compliance with remote working policy, changes to terms of employment, and so forth.
Also, feel free to download the recruitment agreement sample in the following chapter and customize it to suit your needs.
This recruitment agreement is entered into and made effective as of ______ between the following parties: _____ and ____. This agreement outlines the terms and conditions under which _____ will provide suitable candidates for employment to the _____.
In accordance with the terms and conditions of this agreement, the client agrees to engage the recruiter’s services to find suitable candidates for employment. The candidates that are to be considered for employment must meet the following conditions:
The ____ will be entitled to receive the fee of ____ for their services in the event that candidates provided by _____ are found suitable for the position and placed in the employment role with _____.
Both parties shall at all times keep information regarding their employees, employment policies, and business activity provided by each other in absolute confidence.
TERM AND TERMINATION
If suitable candidates have not been found, this agreement will automatically be terminated on ____. If suitable candidates have been placed in their roles, this agreement will be terminated after the fees are paid.
This agreement may be terminated by either party if the conditions of this agreement have been met, whether the agreement is fulfilled or unable to be fulfilled.
This agreement shall be governed on all levels according to the law of ____.
If you’re not sure how to write your recruitment agreement, you can start by checking the recruitment contract template offered above. It can be used by a recruitment agency and the client alike, but you’ll have to work out a couple of details in either case.
A recruitment agreement should start with an introduction of the parties involved, which is to include names, addresses, and the way both parties shall be referred to throughout the agreement. Needless to say, all information about the parties must be accurate and up-to-date.
This is the core of the agreement and should contain in-depth details about the recruitment service that’s expected to be received, together with deadlines or any additional requirements.
Fees and payment terms
This section deals with conditions surrounding the payment part of this agreement where you want to precisely work out the recruitment fees and any other terms that apply to it.
These privacy considerations should include acknowledgment and consent from both parties for disclosing personal information of their employees, employment policies, and business activity in general. This serves as a protection from potential claims for a breach of your obligations before the law.
Term and termination
This part of the agreement defines the length of the contract, as well as terms under which the agreement will be considered terminated before the end of the scheduled date.
The next section deals with compliance with applicable laws, orders, rules, and regulations of the country or the state in which the recruitment agreement is created.
In the end, it’s important to make sure both parties have completely understood and signed the agreement. You can also add a section that states that the agreement won’t be legally binding unless it is signed by both parties.
Once the recruitment agreement is created, it should be printed out and signed by both parties, after which each party may keep one copy. However, if either a recruiter or a client wishes to make even minor changes to the contract, they should give advance notice to the second party and note down these changes, in most cases, by issuing a new contract.
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