How Should We Handle a Second Free Replacement Request Due to Inefficient Training?

Guidance Needed on Free Replacement Policy

We are in HR Staffing, and we have a client in Mumbai for whom we offered a free replacement as the first candidate left in 35 days. The second incumbent also left the company in 40 days. Now, they are asking for a replacement for him as well. It's a dilemma for us as we haven't encountered such a case before.

The agreement we have states, "We will provide a free replacement in case the candidate leaves the company within 90 days of joining." The candidates were freshers, and they left because the training was inefficient.

Please provide guidance on whether we should or should not offer a replacement again.

Regards,
Karan Dass

We are in HR Staffing. We have a client in Mumbai for whom we have provided a free replacement as the first candidate left in 35 days. The second incumbent also left the company in 40 days. Now, they are asking for a replacement for him as well. It's a fix for us as we haven't come across such a case. The agreement we have says, "We will provide a free replacement in case the candidate leaves the company within 90 days of his joining." The candidates were freshers, and they left because the training was inefficient.

Please provide an answer on whether we should or should not provide a replacement again.

Regards,
Karan Dass

As an HR professional, it is my opinion that you should offer a free replacement. You are being paid at least a month's CTC of the candidate for filling a specific position in the planned organizational structure. The key term here is CANDIDATE, as in "provide a free replacement in case the candidate leaves the company within 90 days of joining," regardless of whether it is candidate A, B, or C.

So, whether it is the 1st candidate or the n+1st candidate, if they do not stay for even 3 months, repeatedly paying for new candidates could result in paying the Recruitment Consultant at least 8 or 9 months' salary in a year alone.

In fact, if the HR and the Consultant collaborate, this situation could create an opportunity to exploit the company. Can any management allow this? Therefore, offering a free replacement should be seen as a business risk by you and should be incorporated into your business plan and revenue model.

Warm regards.

Thank you for the response. It provided me with a view from the client's perspective. I conducted interviews with both of the candidates who left the job, and their reason was "Lack of Training & Knowledge Transfer." We feel victimized because these organizations cannot control their attrition and rely on back-to-back replacements. There is little hope that the next placement will survive this period as well. One thing is certain: they will have to step up their game in managing people. We look forward to resolving this for mutual benefit.

Regards,
Karan Dass

Thanks for your response. You are right; what I stated above is the Client Company's viewpoint. I can understand that if candidates keep leaving the company within such a short period, the problem lies with the company. I also understand that a Consultant can do virtually nothing to set things right here. The only way out is to avoid such companies.

Warm regards.

So far, so good! We all learn lessons all the time. In this situation, to add further, it appears to me that both of you are holding the reasons provided by the candidate as sacrosanct!

It is easy for the candidate to hide their own inadequacy in absorbing training inputs, or possibly a better offer could have materialized where they were already being considered, which none of us knew! The candidate knows that within the probation period, if they leave, there are no consequences, and they do not care if the Placement Agency is put in an awkward situation vis-a-vis the client. They also do not care one bit about the inconvenience the company may have to deal with in such a situation!

In short, the possibilities that emerge are:

1) The candidate was a wrong selection - failure of the interviewers (not to apportion blame as this can happen not because of the process failure but due to the candidate's peculiar personality!)

2) There is an unholy alliance between the Placement Agency and the company HR!

There may be more possibilities, but what bothers me is why such a conditionality (of free replacement) is accepted when the Agency has no control over the employer-employee relationship once the candidate joins! It is a theoretical possibility that the candidate leaving the employer alone is responsible - neither the candidate nor the Placement Agency!

What is the defense/justification for accepting such a conditionality needs explanation? Even if it is just the "competition" element in the trade, what are the Agency's safeguards? In any case, if the "competition" forces the Agency to accept such irrational conditionality, then such cases are to be treated as business risks, as has been rightly pointed out! Or the Agency could have perhaps negotiated the deal in such a manner that this kind of irrational conditionality is not allowed in the contract!

I assure you that what has been stated here is borne out by hard experience over the years!

Regards,
Samvedan

This only reflects on the environment in the company. The solution depends a lot on whether you value this company for a long-term relationship or association.

Considerations for Replacement

If yes, I suggest you go ahead and replace the second candidate too, with a condition. Let them know that it's in their interest to figure out and analyze why two candidates left in such short durations. Also, make it clear that if the third candidate also leaves, you won't provide another replacement. Additionally, please note that you are able to give two replacements only because the candidates were freshers. What if they were experienced or had hard-to-find skills? So, please make it clear that this will be a one-off response from your end and can't be generalized for any similar situation if and when it occurs. We have had such a case earlier with a long-standing client.

All the best.

Regards,
TS

Satish has given a suggestion to provide a replacement for the second candidate as well. I have the same opinion; however, with some reservations. Before you provide a second replacement, I request you to talk to the previous two candidates and ask why they left. If you find that their departure was due to the company's culture, then it would be better not to provide a replacement for the second candidate as well. Simply inform the company that you are still in search of the right replacement and have not found a suitable candidate yet.

Explain to them that given the recent departures, you are being more cautious this time. However, in practice, you can delay any action and keep them waiting for a few months. Not providing a replacement would also mean foregoing the billing amount, but every business incurs some losses. Take this incident in your stride and move forward.

Regards,
DVD

Policy for Candidate Dismissal and Replacement

We are following a policy here that whenever a candidate is not working properly or the company wants to dismiss them, they should first send an email to me at least 7 days before, stating the issue. This procedure allows us to be informed and prepared in advance, and we can also advise the candidate on how they can improve their performance.

Furthermore, we offer free replacement only in cases where the candidate is underperforming or has left without proper notification. If the candidate's performance was satisfactory and the issue lies with the company, we are unable to provide a replacement.

In addition, you can list such candidates in a blacklist. In contrast, with certain companies, you should specify in the agreement that only three free replacements are allowed, and recommend implementing a one-year bond with at least a fresher to prevent future issues.

Lastly, select only those freshers who are highly motivated and enthusiastic to work; otherwise, this issue may persist for an extended period of time.

Regards,
Madhusudan Dadhich

You must have signed an agreement with the client. What is the period of that agreement? Both parties (client & your company) have to follow the terms and conditions as per the agreement. Knowing that, due to a lack of training and other issues, candidates are leaving the company. So, you may think of renewing the contract when it is due; however, free replacement has to be provided until the contract exists.

Regards,
Milind Halbe

Addressing Policy Challenges in HR Staffing

You seem to have a very serious problem. A company policy of providing "replacements" within 90 days means you have a legal as well as a moral obligation to conform to the terms of your own policy. However, if you modify the policy by reducing the time from 90 days to 30 days, for example, there is the possibility of losing a client.

So what is it to be:
a) Keep the 90-day rule, and keep the client, or;
b) Change the rule and possibly lose a client as well as put a black mark on the organization's reputation in the marketplace, or;
c) Revise your selection process to determine if the candidate truly wants a career with the client, or;
d) Revise your candidate contract to include a provision to the effect that "if the candidate leaves the employ of the client within 90 days, (s)he will reimburse the agency up to XX% of earnings during the period of employment."

While it may not stop newbies from leaving, it will give them pause to consider whether or not they want the position. It is also incumbent upon the client to provide full disclosure about the terms, conditions, and expectations prior to making an offer, and then allow the candidate some time to decide.

Just some thoughts.

Regards,
PALADIN

Your thread post for "Replacement Again" has been moved into this existing thread to enable users and seniors to answer your query promptly.

Regards.

According to the Hewitt survey 2004, employees do not leave organizations; they leave their immediate manager! Poor training inputs and lower salaries are just incidental to the core reason. Organizations do not experience a drastic change in their work culture overnight. While even the managers will not change their behavior either, hence find a good job for him outside or wait for his transfer (on a lighter note!).

You will have to honor your agreement, as there is no way out. Alternatively, look out for a candidate who is the right fit for the job/organization (not high potential) - a person who is a bit smart and intelligent, with okay comprehension levels, and who is in dire need of a job. Other factors like being a plain graduate with a high second class, staying close to the company - a somewhat "B" / "C" category candidate! Hope this works for you and your agency this time! Overall, just understand the culture, organization set-up, manager's caliber, and the right fitment of the position and place the new candidate.

All the best the third time!

Regards,
Santosh

Please read this condition: If a candidate placed by us leaves the job of his/her own within a period of three months from the date of the first candidate joining, then we will replace the candidate at no extra cost, subject to the availability of a candidate.

So far, so good! We all learn lessons all the time. In this situation, to add further, it appears to me that both of you are holding the reasons provided by the candidate as sacrosanct!

It is easy for the candidate to hide their own inadequacy in absorbing training inputs, or possibly a better offer could have materialized where he was already being considered, which none of us knew! He knows that within the "probation period," if he leaves, he has no consequences, and he does not care if the Placement Agency is put in an awkward situation vis-à-vis the client. He also does not care one bit about the inconvenience the company may have to put up with in such a situation!

Possibilities and Concerns

In short, the possibilities that emerge are:

1) The candidate was a wrong selection - failure of the interviewers (not to apportion blame as this can happen not because of the process failure but due to the candidate's peculiar personality!)

2) There is an unholy alliance between the Placement Agency and the company HR!

Maybe there are more possibilities, but what bothers me is why such a conditionality (of free replacement) is accepted when the Agency has NO control over the employer-employee relationship once the candidate joins! It is (perhaps a theoretical) possibility that for the candidate leaving, the employer alone is responsible—neither the candidate nor the Placement Agency!

What is the defense/justification for accepting such a conditionality needs explanation. Even if it is just the "competition" element in the trade, what are the Agency's safeguards? In any case, if the "competition" forces the Agency to accept such irrational conditionality, then such cases are to be treated as business risks, as has been rightly pointed out! Or the Agency could have perhaps negotiated the deal in such a manner that these kinds of irrational conditionalities are not allowed in the contract!

I assure you that what has been stated here is borne out by hard experience over the years!

Regards,

Samvedan

Discussion on Guarantee Period

If 90 Days Free Replacement is viewed as irrational, then 180 days (a norm with some companies) must be mediocre—by your standards.

Is the Guarantee Period a standard practice of the Agencies or the Client's insecurity over losing its employees and the recruitment fees?

Why would Agencies want to flex muscle by issuing a Guarantee Period, knowing that talented resources are scarce?

Agencies comply with client needs. Clients are always looking for the best bid, lower pricing, extended guarantee period, maximum payment releases, and other requisites.

So, in order to survive in the business, we (startups) need to acknowledge the proposal from the client or lose the contract to recruitment stalwarts.

Yes, once you become a company of repute, then you yourself are too strong to lay down terms to the clients.

We are similar to the clubs in the bottom half of the football league table, who toil for every single point, to stay off relegation. Once we know that we can't win over, we work for a draw.

In this case, we drew level. We bid them adieu in a pleasant way.

Thank you so much, Sir.

Thanks, Karan Dass

Perhaps this response is not necessary at all! I have merely stated my viewpoint. There is no need for anyone to accept it!

Personally, when the client selects a candidate (agency role is restricted to providing the resume), when the agency has no control over the employer-employee relations post the candidate joining employment, I fail to appreciate the organization compelling to succumb to its diktats and demand lower professional charges, free replacements, and what have you! In my book, it is wrong, unethical, and should be stopped, despite the fact that "might is right" controlling the interactions in most spheres of society. A hundred wrongdoings may make a practice, but that cannot make it right! Yes, if I want to be in the game, I must follow the rules whatever they may be - fair, unfair, gentle, brutal, professional, or dictatorial. If I do not agree to the rules of the game, I better not play, and that's what I tell myself always!

Please, I was not commenting on your particular experience but was addressing the general reality. I only felt that we are all obliged to make this world a little more sensible place and not let the brutes rule the society. That's all.

Regards,

Samvedan

March 21, 2013