Recruitment agencies: The 5 types of recruiters

Last updated:
February 26, 2021
December 20, 2021
min read
Nico Prins
Table of contents

Regardless of if your company has a dedicated Human Resources department, there will probably come a time when you need some outside help with your recruitment efforts. If you’re in this situation, you might have considered working with a recruitment agency to fill those vacant positions.

Agency Central found that over 50% of candidates prefer to use an agency to help them find a job. The statistics might be skewed, given the source of the data. Still, there’s a demand for recruitment services from the employer and employee sides as you need the right candidates to implement your business development strategy.

In this post, we’ll have a look at the five different types of recruiters and recruitment agencies. With an understanding of the different types of recruiters, you can identify the ones who are most appropriate to the needs of your business.

Retained recruitment firms

Retained recruitment firms, also called executive search firms, are used by companies trying to fill senior-level positions. The company pays the recruiter a portion of the fee upfront, with the rest due upon hire of a suitable candidate.

Retained recruitment firms typically come up with a long list of potential candidates, including passive candidates (those who are not actively looking for a job), and then narrow this pool down to a strong shortlist. It’s normal for the hiring process for a CEO to take around 90 days, sometimes longer.

The advantage of hiring a retained recruiter is that they are highly motivated to find you a suitable candidate. By paying a retainer fee, you guarantee the recruiter’s time and attention. Executive recruiters also have extensive networks of highly qualified candidates, increasing your chances of finding the right person, and reducing the risk of a bad hire.

The downside, of course, is that retained recruitment is expensive. The retainer fee is typically 30 to 35% of the salary for the position in question.

Contingency search firms

Companies typically bring in contingency recruiters when their in-house team can no longer handle the recruitment workload. This situation might arise if the company has several open positions or experiences a sudden spike in demand.

Unlike executive search firms, contingency recruiters work for multiple clients concurrently. They are more often used to recruit for lower-level or non-specialist positions.

Contingency recruiters reach out to potential candidates through their networks. They also advertise the job on multiple job boards and use online databases to search for resumes. They send candidate details to you. Your job is screening the resumes and arranging interviews.

Contingency recruitment firms don’t require a retainer upfront and are only paid once they’ve filled the position. This payment can be a flat rate or a percentage, typically 15 - 35%, of the position’s annual salary. Because you don’t pay anything upfront, contingency recruitment can be more cost-effective for easier to fill positions.  

Staffing agency recruiter

Staffing agency recruiters help companies fill vacant positions with temporary employees. This type of recruitment is prevalent amongst industries with a lot of short-term projects such as IT and construction and seasonal sectors such as hospitality, retail, and tourism.

If you use a staffing agency, the employees work for the agency. You pay an agreed hourly rate to the agency. The agency then takes a cut before paying the employee. The staffing agency is responsible for taxes, medical insurance, and any other benefits. A representative from the agency will consult with you to determine your requirements before assigning workers to fill your vacancy.

Using a staffing agency is expensive long-term. However, it is a fast and efficient way to hire for short-term positions. Using an agency means you only have to pay for additional staff when you most need them. Your company also saves time and money by outsourcing the work of hiring and the costs of taxes and benefits.

RPO companies

Recruitment Process Outsourcing (RPO) companies are external providers who take over all or part of a company’s recruitment process. An RPO company acts as an extension of, or alternative to, an internal HR and talent acquisition function. They are responsible not just for sourcing candidates for a specific role, but for the entire recruitment process from strategic planning to evaluation and analytics.

Because RPO companies have a broad network and in-depth industry expertise, they are highly efficient. They can shorten the recruitment process and lower hiring and retention costs.

The right RPO agency will grow your business’s reputation as a great employer by shaping the candidate experience. The result? An improved employer brand, higher retention rates, and better quality hire.

You’ll pay your RPO company an ongoing management fee according, which will vary according to the parameters of your contract. You can temporarily hire an RPO company on an as-needed basis, avoiding the cost of being locked into a long-term contract.

RPO companies that work on shorter-term contracts are often referred to as on-demand RPO firms. Utilizing an on-demand RP firm allows you to add or drop specific elements of the service depending on your circumstances, while still benefiting from their specialist expertise.

Internal recruiter

If your company does a lot of hiring, it might make sense to have somebody on staff whose role is dedicated to this function. Their job title is likely to be “Recruiter,” “Internal Recruiter,” or similar.

An internal recruiter is a salaried employee who is responsible for attracting and recruiting the best talent for their company. Job functions include writing job descriptions, posting job ads online, sorting through resumes to filter out unqualified candidates, and scheduling interviews. An interval recruiter does not usually receive a commission for making a hire as they are paid a salary.

Recruiting the right way

Recruitment can be a tedious and time-consuming process, but it doesn’t have to be. A recruitment agency can save you time, save you money, and help you find the perfect candidate. It’s worth investing in your recruitment process because the costs of a bad hire can be high.

If you plan to use a recruitment agency, you need to make sure you’re working with the right type of agency. Defining your company’s recruitment goals first will enable you to find and work with the agency most equipped to get the results you need.

Cracking the corporate recruiting code can be hard work. But with the right recruitment agency on your side, you’ll be well on your way to hiring and retaining the best people.

For more information from the author head to Launch Space. Nico runs an SEO certification program that helps people upskill their digital marketing.

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