Here’s a Novel Take On Guarantees

In a previous article I wrote, “The cost of your service (your fee) must be justified by the value your client receives after the candidate has actually been placed and has consistently met or exceeded the performance standards for the position.”

If this justification is true (and it is), some readers believed it would require them to accept responsibility for the on-the-job performance of the placed candidate. Nevertheless, they were trained to tell their clients they were in the placement business, not the performance guarantee business. However, if this were true, then why do they provide a guarantee on their placements?

The fact is, whether right or wrong, our clients consistently judge us through the performance of the individuals we place.

Incongruity exists because, as recruiters, we do not control the post-hire environment, nor do we directly supervise the newly hired employee, both of which have a direct impact on their performance. In fact, most job failures are not the result of an inability to do the job. Rather, most job failures result from an inability of well-intentioned people to work effectively together.

Therefore, should we offer a guarantee and if so, what are we guaranteeing?

When a new client brings up the subject of your guarantee, begin by asking a couple of key questions.

1. When you say guarantee, what specifically do you mean?

Listen carefully to their answer. It could be as simple as what is usual and customary for the industry,” or could include provisions that are beyond the reasonable boundaries of a realistic business relationship. Then ask the key follow-up question.

2. Why is the guarantee important to you?

Again listen carefully to the answer because it will set the stage for everything that follows.

If the guarantee is important because the company has a history of high turnover, a significant problem exists. This turnover problem must be discussed and dissected in detail in order to uncover the causes. Do not proceed without having this in-depth discussion.

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Assuming the client’s response is reasonable, i.e. to protect their investment, then focus your discussions on how to develop and implement a selection process that will help ensure they make the right decision. After all, it’s wiser to do the job right the first time than to squander time and resources in fixing an avoidable mistake. This squandering of resources occurs even when a guarantee is present.

Bottom line: Anytime a guarantee needs to be implemented, everyone has already lost.

However, we live in an imperfect world primarily because of the variation and volatility of the people who exist within it. Therefore, both you and your client need to be accountable for those aspects of the situation over which you have direct control.

A “fresh perspective” to utilize when discussing your guarantee is the predict, prevent, or cause approach. It can be presented as follows.

If, in the unlikely event an employee we place with your organization leaves or is terminated for cause before you have received an appropriate return on your investment in them, let’s agree to handle the situation in this manner:

First of all, let’s ask ourselves (client and/or recruiter), was there anything we could have done to predict in advance this particular outcome?

Next, if we (client and/or recruiter) could have predicted this outcome, is there anything we could have done to prevent it?

Lastly, if we (client and/or recruiter) could not predict it, or prevent it, was there anything we did or failed to do that caused this outcome, sins of omission or commission?

With this as the basis of our guarantee, if at anytime an employee we place is terminated for cause or leaves prematurely, we will review with you the specific circumstances. If it is agreed between us that we (meaning the recruiter) should have been able to predict, prevent, or if there was something we did or failed to do to create this outcome, then we will make it right. We will replace the employee. This is a guarantee that focuses on our capability and willingness to complete a successful recruiting and selection process. This is exactly where the focus should be placed and therefore, our guarantee is stronger and more realistic than what is typically presented in written form as an industry standard. In other words, it means we will own our problems. If we make a mistake, we own the mistake and we will make it right, regardless of timeline. You have our word on that!

If the client still insists on a written guarantee and you do not discover an underlying problem within their organization that would create undue turnover, certainly, you can put a guarantee in writing. However, the guarantee should only cover those areas that are controlled by you under your responsibilities during the recruitment and assessment process.

This is a “fresh perspective on guarantees” because it places the emphasis exactly where it belongs, on the thoroughness of your process and the quality of your work. It transcends standard guarantee time periods while laying the groundwork for a proper and realistic review of the circumstances surrounding the turnover of the placed employee.

As always, if you have questions or comments about this article or wish to receive my input on any other topic related to this business, just let me know. Your calls and emails are most welcome.

Recipient of the Harold B. Nelson Award, Terry Petra is one of our industry's leading trainers and consultants. He has successfully conducted in-house programs for hundreds of search, placement, temporary staffing firms and industry groups across the U.S., Canada, Mexico, Australia, New Zealand, Russia, England, and South Africa. To learn more about his training products and services, including PETRA ON CALL, and BUSINESS VALUATION, visit www.tpetra.com. Terry can be reached at (651) 738-8561 or click to email him.

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