Clawback

Clawback protects the client when a placement does not stick. It is structured as a decreasing scale: for example a 100% refund if separation occurs within 30 days, 66% between 31-60 days, 33% between 61-90 days.

As an alternative to a cash refund, many agencies offer a replacement guarantee: they redo the search at no extra cost within the vesting period. Clawback management requires accurate tracking of hiring and separation dates: an ATS connected to billing automates credit notes or replacement triggers, avoiding commercial disputes with the client.

The clauses that cause disputes are almost always the ones nobody read closely at signature. What counts as a qualifying departure, whether a role eliminated in a restructuring triggers a refund, and whether the guarantee restarts on a replacement are three questions worth settling in the contract rather than in an email exchange nine months later.

Treating clawbacks as an accident rather than as data wastes the most useful signal they carry. A firm that records the reason behind each one usually finds them concentrated in a small number of clients or roles, and the underlying cause is more often a weak onboarding or an unrealistic brief than a bad hiring decision. That pattern is fixable; the individual refund is not.