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Search firm guarantees – are they equitable?

Typical practice in the executive search industry is for search firms to provide a 6 or 12 month guarantee on the candidate hired.  If the individual hired is terminated for performance reasons or resigns within the guarantee period the search firm is usually obligated to replace the individual  at no additional fee.  In essence, the search firm bears all of the performance risk.

However, the client is the ultimate decision maker and has the right/abilty to reject candidates and require the search firm to continue presenting candidates.  Is it equitable, in this situation, for the search firm to bear all of the risk?

What about a situation in which the search firm presents a slate of candidates all of whom meet the requirements for the role.  The firm believes that one  of the candidates is superior and recommends that the client hire that candidate however, the client hires one of the others.  Should the guarantee apply?


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