Replacement guarantees in recruitment: what happens if your new hire leaves

Your new Product Owner is ten weeks in. Everything seemed fine until one Friday they ask for a word: their old company has made them an offer they can’t refuse, and they’re leaving. After the shock comes the practical question: “So what happens to what we paid the agency?”.

That’s what a replacement guarantee is for. It’s one of the most important clauses in any contract with a headhunter, and one of the least read before signing. It’s worth understanding properly, because not every guarantee protects the same thing.

What it actually is

A replacement guarantee is the commitment a recruitment agency makes if the person hired leaves your company within a set period after starting. Most commonly, it means finding a replacement without charging a new fee. Some providers offer instead, or as an alternative, to refund part of what you paid.

The logic is simple. If someone leaves very early, something wasn’t assessed or explained properly, and it’s reasonable for whoever ran the search to share that risk.

Which departures it usually covers

In most contracts, the guarantee kicks in in two cases. First, when the person decides to leave, whether because of a counteroffer, another offer, or because the role wasn’t what they expected. Second, when the company decides to let them go because they aren’t performing or don’t fit the team, often during the probation period.

What usually falls outside are departures that have nothing to do with the hiring. For example, a redundancy due to restructuring or your company’s financial situation, a significant change in duties, manager or terms compared with what was offered, or a failure to honour what was agreed with the candidate, such as a salary or remote-work arrangement that later changes. That makes sense: if the role offered no longer exists as described, the agency can’t answer for it.

When it starts

This looks like a detail and isn’t. The guarantee can start on the day the candidate signs the offer or the day they join. One or two months can pass in between if the person has a long notice period. If the guarantee is three months and starts at signature, a good part of it may be used up before the person has set foot in the office.

It’s reasonable for it to run from the start date. The contract should also say what happens if the candidate accepts the offer and then never joins, which happens more than you’d think, especially when their current employer makes a counteroffer during the notice period. We talk about that in our article on counteroffers.

How long it lasts

There’s no standard length. It’s usually measured in months and grows with seniority, because results take longer to show in a leader than in a specialist. At Mimmic Talent our guarantees run from 3 to 6 months, depending on the profile and the type of search.

A useful benchmark is the probation period. In Spain, the Workers’ Statute sets a maximum of six months for qualified technical staff and two months for other employees (three in companies with fewer than twenty-five people), unless the collective agreement says otherwise. If the guarantee covers at least the probation period, you have room to assess calmly without carrying all the risk. Check with your adviser which period applies in each case.

Repeat the search or refund the fee

These are two very different forms of guarantee, and it’s worth knowing which one you’re being offered.

A replacement means the agency searches again for the same role without charging you a new fee. Its big advantage is that it doesn’t start from scratch: it already knows the market, the runner-up candidates and what went wrong with the first hire. The second search is often faster. Its limit is that it only helps if you still need that role.

A refund means you get back part of the fee, often in proportion to how long the person stayed. It’s more useful if the role disappears or you’d rather fill it another way. On the other hand, it tends to be less generous than it looks, because the refund shrinks the later the departure happens.

Some providers offer only one option and others let you choose depending on the case. What matters is that it’s in writing.

The small print worth reading

Before signing, check these four things in the contract:

• The notice deadline. Many guarantees require you to report the departure within a number of days. Miss it and you may lose the guarantee.
• Payments up to date. The guarantee often only applies if invoices were paid on time.
• Which role the replacement covers. If you want to replace the Product Owner with a Product Manager on a different salary, is that still covered? Better to know beforehand.
• How many times it applies. One replacement per search is normal. If the second person also leaves early, check what the contract says.

What no guarantee fixes

A guarantee protects you from the financial cost of an early departure, but not from the rest: the team’s time, the delayed project and the fatigue of starting over. The best guarantee is still a good search and a good onboarding. Many departures in the first months have more to do with how the person was welcomed than with how they were chosen, which is why we wrote about the first 90 days of a new hire.

One last tip: when comparing proposals, don’t stop at how many months the guarantee lasts. Ask them to walk you through a concrete case: what would happen if the person hired left in month two? The answer will tell you a lot about how that provider works when things don’t go to plan.

If you’d like to know how we apply the guarantee on a search like yours, write to us and we’ll set it out in writing.

Frequently asked questions

What is a replacement guarantee in recruitment?

It is the recruitment agency's commitment to find a replacement at no extra fee, or to refund part of the fee, if the person hired leaves the company within a set period after starting.

How long does a headhunter's guarantee last?

It usually lasts a few months and is adjusted to the seniority of the role. At Mimmic Talent, for example, our guarantees run from 3 to 6 months depending on the profile.

Does the guarantee cover every kind of departure?

It normally covers the person resigning and being dismissed for performance or fit. It usually excludes departures due to restructuring or the company's financial reasons, or significant changes to the role or to the terms offered. Every contract defines it differently, so read it.

Is a free replacement better than a refund?

It depends on whether you still need the role. If you do, a free replacement search is usually more useful because it builds on all the market work already done. If the role disappears, a refund makes more sense. Some agencies offer one or the other depending on the case.