What Happens If No Candidate Fits? Navigating Payment Terms with Recruitment Agencies

Contract Between a Recruitment Agency and an Employer

I want to make a contract between a recruitment agency and an employer. Please confirm what happens if we don't like any candidate and hence no candidate gets selected from those provided by them. Is it okay if we don't pay the agency, or how should the payment structure be?

The agency mentioned that we only have to pay the full 1 million salary we are providing to the employee within 45 days of the candidate joining. What if we don't like anyone; should we still pay or not?

Dear Sayali,

The recruitment agency is a contractor in this case. The contractor is eligible to raise the invoice provided the candidates are selected. If they provide the candidates but none of them is selected, then the contract services are incomplete. For the incomplete service, how will the contractor be eligible to raise their invoice?

Anyway, in your contract, you may write clearly that:

"Selection of the candidates is subject to the fulfillment of the recruitment standards of _______ (name of your company). There is a possibility that none of the candidates recommended by the contractor could get selected. Under such circumstances, the contract services will be deemed incomplete, and the contractor will not be eligible to raise their invoice."

Before you avail of the services, you may issue a proper Purchase Order (PO) or the Work Order (WO) to the recruitment service provider. Mention clearly the terms and conditions of the services, the general process of selection, terms of payment, etc. At the same time, give a commitment to the recruitment service provider that the candidate whose candidature is turned down will not be selected for the same position or any other position for the next five years.

Thanks,

Dinesh Divekar