Understanding Staffing/Recruiting Agency Models
There seems to be a lot of confusion and misunderstanding around working with staffing agencies for FT placement opportunities. As a recruiter I have both worked with and for agencies (both as a contractor on site at a client, or as a FT recruiter hiring on behalf of the agency). The important thing to note is not all agencies work with all employers; contracts are usually based on a number of factors such as personal relationships with corporate recruiters; procurement policies (especially for large employers); cost. The second most important thing to understand is that -with the exception of executive search firms, who create long-term relationships with VP and above candidates — agencies work *for employers*, not job seekers. They are paid significant amounts of money by an employer to help them find qualified talent. Most agencies are engaged to find SENIOR talent — entry level/early career talent is usually quite abundant, and the cost of using an agency makes it fairly rare for an agency to support roles that are easier to fill.
There basically three types of “agency” or “external” recruiters.
- A staffing agency: usually they have both contract and FT placement divisions. For full time placement, they act as an adjunct sourcing resource in partnership with the internal recruiting team. In general, the agency is paid after an offer is made, and it will be anywhere from 20%-30% of the base salary of the offer.
- Executive Search: this is a retained search model (significant flat fee paid in advance) for highly placed leadership positions — usually GM, VP and C-level roles.
- RPO — Recruitment Process Outsourcing. This is a model whereby a company hires an agency to manage *all* their recruiting. This is usually a business model used by small companies just starting out. They generally transition to an internal recruiter/HRBP to manage hiring once a critical mass/cost per hire is reached. This is usually a negotiated fee/contract for full services.
I am unaware of any staffing agencies that offer personalized recruiting services for individuals. There may be some career coaches that offer it, but I personally don’t know any.
The majority of agency engagements will be the first type for full time placement. There are a number of reasons why an agency may be engaged. The most common ones:
- Highly competitive market
- Niche position — a singular or more rare opportunity with a limited candidate pool
- Volume of jobs to be filled by recruiting team is larger than can be accommodated at a given time; staffing agencies help as adjunct recruiting support, helping to source candidates without bringing additional FT staff on board for a short time frame.
For niche positions, there may be a long term relationship between an agency recruiter and one or more candidates. Agencies will generally NOT name their clients in their job postings (and may not post every job they are recruiting on), and if they DO, the job is often also open on the client’s own website. There are contractual obligations in place when an agency submits a candidate wherein the client cannot hire that person without a fee within a specific amount of time (the standard is a year.)
There are thousands of agency/freelance recruiters on the market. There are huge international companies such as Robert Half or Kelly Services, and in every city and industry there are single recruiters that hang their shingle out. The best way to find an agency/external recruiter to work with is to ask hiring managers and recruiters in your industry who they recommend. If you see a position of interest via an agency you don’t know, use LinkedIn to reach out to PAST recruiters that have worked there for their opinions about the agency’s reputation.
Agencies have a role to play in recruiting, and they are a valuable resource both for recruiting teams at employers as well as job seekers.
