How Do Recruitment Agencies Work?


It only makes sense for job seekers to maximize their potential for obtaining the ideal position in any kind of job market. With so many unknown possibilities and the inherent limitations of networking, recruitment agencies can add another dimension to an employment search. The work of recruitment agencies depends entirely on the supply and demand of the marketplace and their ability to consistently present companies with highly qualified professionals.


  • Recruitment agencies work by making the connection between their client (hiring company) and the ideal candidate (employee). Essentially, agencies perform a service to both their client and the candidate, but ultimately the client pays the bill. Different kinds of agencies or even different kinds of searches within an agency are paid distinctly. In a retained search, the client pays the agency a portion of the total fee up front, and the agency has exclusive rights, within a mutually agreed upon time frame, to fill the position. If the client then finds someone without the agency, they lose the prepaid portion. Retained searches make it worthwhile for an agency to spend a lot of time hunting for the right candidate. In a contingent search, multiple agencies compete to fill one position, and the client might ultimately choose to hire someone directly.

Types of Agencies

  • Types of recruitment agencies, or search firms, include executive search firms, employment agencies and temporary employment agencies. The words "agency" and "firm" are interchangeable, although "firm" is used more often by recruiters dealing with highly paid executives. Certain search firms work exclusively on retained searches and take pride in knowing exactly what their clients need, and their ability to deliver. Other search firms perform a mix of contingent and retained searches. Temporary employment firms work exclusively on temporary or temporary-to-permanent positions. Nearly all recruitment agencies specialize in specific career areas, which allows them to fully understand their clients' needs.

Careers Served

  • Nearly any profession requiring a college education has one or more recruitment agencies working on its behalf. Actuaries, lawyers, computer programmers, financial analysts, nurses, doctors, dentists, accountants and graphic artists are but a few of the professions served by recruiters. Recruiters (also called headhunters) who work in industries where professionals are annually listed (i.e. actuaries) as they attain accreditation have a better grasp on their pool of candidates.


  • A recruitment agency can be very beneficial, especially for the prospective employee who fits the job well. Recruiters want to please their client by offering the best of what's out there---more quickly than the client would find it without them. Recruiters help candidates refine their resumes, and work hard to help their client extend the best offer to the candidate. Recruiters sometimes are able to talk their client into a higher salary, signing bonus or better relocation package. On retained searches, the recruiter has the client's full attention, which can make all the difference for a candidate.


  • Recruitment agency fees can be as high as 33 percent of the new hire's salary offer. It's a misconception that the fee would have been additional salary for the new hire; companies keep separate budgets for recruitment fees. Recruiters most want to successfully place an employee; when companies balk at fees, recruiters will often take a lesser percentage to secure the candidate's hire. Some companies don't use recruiters as a rule. So candidates shouldn't job hunt exclusively though a recruiter.

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