Updated September 2026
A recruiter replacement guarantee is a promise to find a new candidate, or refund part of the fee, if a hire leaves or is let go within an agreed period after starting. Startups should expect the guarantee to be written into the contract, with a clear period, a clear remedy and a short list of exclusions. The terms vary between recruiters, so compare them in writing before you sign rather than after a hire leaves.
Even a well-run search can produce a hire who does not work out. The candidate may resign for a better offer, the role may turn out to be different from what they expected, or performance may fall short. A guarantee shares that risk between you and the recruiter for the first stretch of employment.
For a startup, the risk is sharper than for a large company. An early hire often owns a whole area, so a departure leaves a gap that no one else can cover, and a second search pulls founder time away from the business again.
This is how long after the start date the guarantee applies. Check whether it runs from the offer acceptance or the first working day, as a long notice period can use up much of the cover before the person arrives.
Guarantees usually offer one of three things: a free replacement search, a partial refund, or a credit against a future hire. Some recruiters offer a choice. A replacement is useful if you still need the role filled. A refund or credit is more useful if the departure made you rethink the role.
Some guarantees give the same cover for the whole period. Others reduce over time, so a hire who leaves in the first weeks triggers more than one who leaves near the end. Ask for the exact schedule.
Most guarantees exclude some situations. Common ones to look for include:
None of these is unreasonable on its own. The point is to know them upfront so you can meet the conditions if you ever need to use the guarantee.
The fee model changes what a guarantee is worth in practice. With a percentage-based contingency fee, the amount at stake is larger. For a $130,000 hire at the typical 20 to 25% contingency rate, the fee is $26,000 to $32,500, so a partial refund or free replacement protects a meaningful sum.
With a fixed fee, the amount at stake is smaller and known upfront. For the same $130,000 hire, Funded.club's fixed fee is $11,500. The guarantee still matters, but the financial exposure from a bad hire is lower to begin with, and the more important question becomes how quickly the recruiter can restart the search.
Retained search contracts often handle replacements differently again, because part of the fee is paid in stages before a hire is made. Read the replacement clause alongside the payment schedule.
A guarantee is a safety net, not a strategy. The best protection is a search that gets the fit right the first time:
Funded.club is a fixed-fee recruiting partner for funded startups and fast-growing teams across North America, Europe and APAC, and has helped 500+ startups from Seed to Series D since 2019. Its replacement terms are set out on the pricing page and in the FAQ, so you can compare them directly with any other offer.
Separately from replacement terms, Funded.club also backs the start of a search. The fee is agreed upfront by salary band, from $4,900 to $21,900 and averaging 6 to 9% of salary, with part paid as an advance and the balance when the candidate accepts. If Funded.club does not deliver a shortlist of at least 3 qualified candidates within 30 days, the advance can be claimed back in full. One dedicated recruiter runs each search, with first screened candidates within 7 days.
It varies by recruiter and by role, so there is no single standard. Ask each recruiter for the period in writing, and check whether it starts at offer acceptance or on the hire's first day.
It depends on whether you still need the role. If you do, a replacement search saves time. If the departure has changed your plans, a refund or credit gives you more flexibility.
Yes, if an exclusion applies, such as the role being made redundant or the invoice being paid late. Read the conditions before signing so there are no surprises.
Start with our guides to recruiter costs for startups and flat-fee recruiters, then check each provider's own site for current terms.
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