Reduce friction when working with recruitment agencies by using this free recruitment agreement template.
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It's common for businesses to outsource recruitment work. But it's crucial that you have a robust recruitment agreement in place before doing so.
This guide explores what recruitment agreements are, what they should include, and how they can be generated in seconds using Juro. We've also shared a free recruitment service level agreement template for you to get started with.
A recruitment agreement is a legally binding contract between a company (the client) and a recruitment agency being hired to recruit on behalf of the company.
Also known as a recruitment service level agreement, this legal document sets out the services that will be provided to the client. These services typically involve sourcing, identifying, and placing qualified candidates for specific positions within the client's company.
A recruitment agreement also outlines what compensation the agency will receive in return for this work, and how this will be paid.
The primary purpose of a recruitment services agreement is to establish a clear understanding between the client and the recruitment agency about their respective roles and responsibilities.
It also exists to protect both parties if either of them breaks their promise and fails to fulfil their responsibilities under the contract.
The HR team will have their own expectations and objectives for the relationship as they are responsible for making hires.
However, it's usually down to legal departments to actually draft, review and enforce the agreement.
On the agency side, an account manager will usually oversee the implementation of the agreement. Although, the agency's legal team may also get involved if their expertise is needed.
Recruitment agreement templates can vary a lot depending on the size of the agency, the scope of work, and the nature of the relationship. It will also vary depending on how many people the recruitment agency are asked to source.
That said, there are a few things that almost all recruitment services agreement templates will cover. Let's explore them now.
This portion should provide a detailed breakdown of the specific services the recruitment agency will offer, which could include job advertising, candidate sourcing, initial screening, coordinating interviews, and final candidate selection.
It's crucial to establish the extent of the agency's involvement and the types of roles it will help fill – be they temporary, permanent, full-time, or part-time positions.
This is one of the most critical areas of the agreement, outlining how much the client will pay for the agency's services. It can include a flat fee, a percentage of the hired candidate's first-year salary, or a mix of both.
Details like when the payment is due, accepted modes of payment, and any penalties for late payment should also be included.
Many agreements have a clause that includes guarantees or rebates if a candidate leaves or is dismissed within a certain period.
This section outlines the circumstances under which the client can expect a full or partial refund, or a replacement search at no extra cost. This is something that can be added during the negotiation (if necessary).
Given the sensitive nature of the information exchanged during the recruitment process, the agreement must include provisions to protect this data.
Both parties should commit to not disclosing confidential information, defining what information is considered confidential, and the consequences for violating this clause.
Some agreements may stipulate that the client can only use the services of the particular agency for the roles specified in the contract (exclusivity).
A non-solicitation clause may also be included, preventing the client from directly hiring a candidate presented by the agency without going through the agency for a specified period. Again, this is something that might be mentioned during a negotiation.
The agreement should specify its effective duration and outline under what conditions either party can terminate the contract. This could include things like notice periods, termination fees, and obligations upon termination.
This section outlines how disagreements or conflicts arising from the agreement will be handled. It may specify that disputes will be resolved through mediation, arbitration, or court proceedings and might also define the legal jurisdiction that applies.
It's common for agreements to include an indemnity clause, protecting both parties from any losses, damages, or legal liabilities that may arise from actions taken under the contract.
Usually, it's up to the legal team to draft the agreement. If there isn't an up-to-date recruitment agreement template available, they'll write this from scratch and populate it manually.
After they've written the agreement, it needs to be checked over by other teams in the company. If anything doesn't look right or needs changing, it's often pointed out in a string of emails or another Word document. This process continues until the recruitment agreement has received the necessary internal approval.
The same thing happens again when the agreement is sent to the recruitment agency for them to review. They'll often want to negotiate the payment fees, or remove the clause about guarantees or rebates, for example.
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These discussions can continue for a while across various different tools, email chains and copies of the contract. This will be the case until the terms are agreed and the contract gets signed.
Now imagine that your company works with a number of recruitment agencies for a number of roles. Repeating this time-consuming process can be a real headache.
Fortunately, the process is much easier and more efficient for businesses with a recruitment agreement template in place already. It's even more effective if you automate this template in Juro.
Rather than starting from scratch each time, companies can keep their template in a contract automation tool like Juro. This allows them to generate new contracts in just a few clicks.
Creating a new contract from the template only takes a few seconds in Juro. The template is chosen and populated automatically using a straightforward Q&A format or by pulling in data via an integration with another tool.
Automating this contract creation process empowers businesses to quickly initiate recruitment agreements from templates pre-defined and approved by legal, with minimal admin work required.
Juro’s AI contract collaboration platform enables your team to create, execute and manage contracts 10x faster than traditional tools. With Juro, you can:
To find out more about how Juro can speed up the process of creating, signing and managing contracts, hit the button below.
Like this template? Check out our other employment contract templates:
A recruitment agreement template is a ready-made contract that a business can adapt each time it hires a recruitment agency. It records which roles the agency will fill and how much the business will pay, along with what happens if a new hire leaves early.
Usually, yes. Agencies often send their own terms with the first CVs, and if you interview or hire one of their candidates, those terms may apply by default. Agreeing your own terms first means the fee and any refund are settled before you see a single candidate.
With contingency recruitment, the agency is only paid if you hire someone it put forward, which suits most junior and mid-level roles. Retained recruitment means paying part of the fee upfront for a dedicated search, and it's more common for senior or hard-to-fill positions. The agreement should make clear which model applies, because the payment terms work very differently.
Ask for a rebate or a free replacement if a new hire leaves or is dismissed within an agreed period, often a few months after the start date. Agencies frequently try to shorten that period or remove the clause, so agree it before signing and set out exactly how the refund is worked out. Make sure the rebate still applies if you've already paid the agency's invoice.
Often, yes. Most agreements say a fee is due if you hire a candidate the agency introduced within a set period, even if you hire them for a different role or through another route. Check how long that period lasts and what counts as an introduction, and try to exclude CVs you never asked for.
It's a sound starting point, but it works best when you adjust the fee and rebate terms for each agency and remove clauses that don't apply, such as exclusivity. For specific legal advice on your contract templates, consult an attorney.
Build the template in Juro once and generate every recruitment agreement from it, with HR or talent teams filling in the fee rate and roles for each agency. When your standard terms change, you update that one template and new agreements follow it. Signed agreements live in one searchable place, so you can check rebate periods and fee rates before you pay an invoice.
Yes. Give Operator in Juro your existing agency contracts and it can draft a new recruitment agreement template that follows your drafting style and the positions you usually take on fees and rebates. Your legal team reviews and approves that first draft before anyone uses it, so the template reflects your risk appetite.
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