Retainer Agreement Template for Recruitment Businesses (UK 2025)
Last updated: February 2025
Why Recruitment Businesses Need a Retainer Agreement
Recruitment retainer agreements provide clients with dedicated recruitment resource on an ongoing basis rather than contingency per-vacancy placements. These are typically used by businesses with high-volume or continuous hiring needs, offering priority service, dedicated account management, and often reduced per-placement fees in exchange for the retained monthly commitment. The agreement must balance the client's need for hiring flexibility with the agency's need for revenue predictability.
Key Clauses for Recruitment
- Monthly retainer fee with per-placement fee adjustments
- Dedicated recruiter allocation and named account manager
- Service levels for time-to-shortlist and candidate quality
- Volume commitments and fee adjustments based on placement numbers
Common Mistakes
- Not linking the monthly retainer fee to measurable service levels, leaving the client paying without accountability
- Failing to address what happens during periods of low hiring activity when the retainer may not represent value for money
Template Sections
- Retainer fee and per-placement fee schedule
- Service levels and performance commitments
- Low activity provisions and retainer adjustment mechanism
FAQ
How should a recruitment retainer be structured financially?
Common models include a flat monthly retainer offsetting reduced per-placement fees, typically 30-50% lower than contingency rates; a monthly retainer fully credited against placement fees; or a hybrid with a base retainer plus performance bonuses for meeting hiring targets. The right model depends on hiring volume predictability and the balance of risk between agency and client.
What service levels should a recruitment retainer include?
Specify time-to-shortlist targets of typically 5-10 working days for standard roles, interview-to-offer ratios, minimum candidate quality standards defined by reference to the role specification, and regular reporting intervals. Include a quarterly review mechanism to assess performance against SLAs and adjust the retainer allocation or service levels as the client's hiring needs evolve.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.
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