What to know before signing staffing vendor contracts? A contract may bore you to tears but it’s better to clarify each clause in the beginning. Are you looking for staffing agencies that can take responsibility for your hiring department? Once you get them, be careful while signing the contract. In this blog, we are going to discuss 10 pitfalls you must be aware of prior to legally partnering with any staffing agency. So, let’s get started.

One-Sided Conversion Terms

Dear employers, sometimes, you may feel that temporary workers can be an incredible augmentation to your permanent labor force. Therefore, make sure that you’re getting a reasonable conversion term in your staffing vendor contracts.

Conversion terms may vary depending on the business, qualification, and category of the candidate you hire. However, there are standard practices that recruitment vendors ought to be following.

For the effort in finding and bringing extraordinary candidates, recruitment vendors are entitled to reasonable remuneration. Generally, this compensation comes from an agreed-upon percentage of the candidate’s starting salary. There are some agencies that will allow you to hire without charging conversion fees in case the candidate works with you for an extended period (six months or more).

If you decide to convert the worker for hire over to a permanent employee before six months (or one year, contingent upon the business), the recruitment vendor should offer a graduated charge plan. Regularly, the more extended the worker has worked for you, the less the conversion charge ought to be. All the conversion terms, including the whole cycle and expense structures, ought to be laid out recorded as a hard copy in your staffing vendor contracts.

Also Read – Niche vs. Generalist Cloud Staffing Recruiter

Accountability of a Bad Hire

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Each time you hire a candidate, you expect things will go in favor. However, what happens if this candidate doesn’t work out, or doesn’t end up having the imperative capabilities your project demands? In this scenario, you wasted time and money in hiring candidates and on top of that paying the staffing bill rate to your recruiting partner. In addition, you’ll need to invest energy and money – again – on urgent recruiting a replacement of a bad hire.

To avoid these hassles, make sure there is a guarantee clause in your staffing vendor contract. The guarantee clause ensures that you get compensated for a bad hire with either a refund or a replacement candidate.

A standard staffing vendor contract acknowledges that the recruitment vendor will bring candidates having imperative skills, experience, and qualifications. Most importantly, it also outlines the terms and conditions within which employers can get a replacement after a bad hire.

Vague Payment Terms

Payment terms are a fundamental part of any agreement and should be clearly drafted to avoid unnecessary expenses. The payment terms in a contract should express the staffing charging rates that the vendor will charge, including extra time and premium compensation. Prior to signing an agreement, employers must affirm that they not paying above-market rates by benchmarking staffing charging rates to industry standards. Alongside the bill rate, staffing vendor contracts should clearly mention the payment timelines and applicable charges such as details of penalties for payment delays.

Inadequate Clauses on Reimbursement and Limitation of Liability

A reasonable reimbursement statement ensures both you and the staffing vendor against any risk emerging from blunders made by the other party in doing its obligations. This implies that if there is any occurrence of a claim, the recruitment vendor agrees to protect you in court, reimburse, and hold you harmless from all cases, misfortunes, and liabilities to the degree that they emerge from the staffing vendor’s break of the terms laid out in the staffing vendor contract.

Inadequate Clauses on Reimbursement and Limitation of Liability

A reasonable reimbursement statement ensures both you and the staffing vendor against any risk emerging from blunders made by the other party in doing its obligations. This implies that if there is any occurrence of a claim, the recruitment vendor agrees to protect you in court, reimburse, and hold you harmless from all cases, misfortunes, and liabilities to the degree that they emerge from the staffing vendor’s break of the terms laid out in the staffing vendor contract.

No Clear Clauses On Terms Of Agreement and Termination

The term of the contract and how it will be terminated can also become an issue between an employer and staffing vendor if not handled properly. The most ideal approach to keep away from such horrendous scenarios and potential lawful confrontations is to have agreed-upon terms of engagement. It is your duty to ensure that the staffing vendor contract contains the conditions for termination as well as exit clause. Formalizing this process protects both the employer and staffing agency from being abandoned unexpectedly.

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Not Mandating Insurance Provisions

While you may not be the direct boss of candidates, however, you actually have a great deal of impact on how the candidate is managed by your recruitment vendor. You can consider staffing agencies responsible by mandating that they will take care of all applicable insurance such as candidate’s compensation, employer liability insurance, and others depending on the industry and state of employment. Moreover, check that the staffing vendor’s insurance certificates are up to date and ensure that there is a cycle set up to review and confirm that certificates are refreshed by the vendors prior to signing the agreement.

Absence of Amendment Clauses

Things change, and we should adjust. This is the reason that an agreement shouldn’t be settled forever. A decent staffing vendor contract must contain a clause for adding, altering, or eliminating any statements. As standard practice, this requires composed assent from both employer and the staffing vendor. Therefore, before signing any contract with staffing agencies, make sure has an amendment clause in it.

Do They Have Audit Clauses

To avoid wrong hiring, a solid agreement will have a mechanism to follow and confirm things like drug screens, and so on. This all should be done in consistence with the employing organizations’ methodology and preferences, so have clear assumptions regarding what the procedures are. Furthermore, most agreements have audit provisions that specify how long a staffing organization needs to keep certain records accessible. It is significant that every one of the components is perceived and illustrated in any agreement.

Do They Meet Your Expectations as Staffing Vendors

Verbally conveying your expectations for staffing merchants isn’t sufficient, they ought to be followed too. All things considered, they must be mentioned in the contract to avoid any conflicts in the future. This will not only guarantee significant necessities are completed, but at the same time, it’s simpler for the recruitment vendor to know forthright what are the employer’s assumptions.

Also Read – How Remote Workers Can Be Your Biggest Asset?

Adequate Arbitration and Legal Language

With an incredible recruitment vendor and crystal-clear contract, you can enjoy a long-term partnership without any significant struggle. Yet, in the occasion that clashes do emerge, battling it out in court isn’t the most ideal way to go with. To keep away from the costly and tedious legal battle, ensure that your recruitment vendor contract incorporates sufficient arbitration language. Assign the state and court(s) that will have purview over your agreement so that potential contentions can be settled agreeably.

How PeoplActive Helps You Avoid These Pitfalls?

It’s vital to have an extraordinary, risk-free working relationship with your recruitment vendor. PeoplActive is a global staffing agency that specializes in remote cloud talent recruitment. We have a specialized team of recruiters who find out the exact match our clients look for. We follow a standard staffing vendor contract covering all the factors defending both employers and staffing firms.

Avoid being victim to bad hiring with PeoplActive. We have a wide talent pool of top-tier cloud talent loaded with skills and hands-on experience your project requires. Let us know your job requisition today, we will come with the right candidate tomorrow. Looking forward to hearing from you soon!

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