What Do Recruitment Agencies Do?

For a business, finding new employees is a time-consuming process, particularly when recruiting for tech skills. Similarly, for job seekers, conducting a job search can be extremely time-consuming and stressful. Recruitment agencies, therefore, act as the middle man between candidates and hiring managers. They aim to save both sides time and relieve them of some of the stress and administration involved in the hiring process.

The main objectives of a recruitment agency are to:

• Source jobs in the market place
• Advertise jobs on job boards to attract candidates
• Interview prospective candidates
• Find the best match between job applicants and employers, ensuring a good fit of skills and culture that enables both to achieve their long term goals
• Draw up short-lists of candidates best suited to the client’s vacancy
• Coordinate telephone, video and face-to-face interviews on behalf of clients
• Liaise between candidates and clients on salary negotiation

Candidates and Clients are Equally Vital

Candidates, as well as clients, are vital to the success of any recruitment agency. While it’s true that the client pays the agency for their work, without candidates, they cannot fill their roles. For this reason, successful agencies pride themselves in developing and maintaining long-term, trusting relationships with their clients and job applicants.

Once a recruitment agency makes a successful placement, for an appropriate fee, the benefits are evident to all. The client ends up with the most suitable candidate for the job, and the candidate finds the job which is the best match for their interests, skills and future ambitions.

Strong Partnerships and Trusting Relationships

Recruitment is all about developing strong partnerships and trusting relationships with clients and candidates alike. Businesses are more likely to work with a recruitment agency on a long-term basis. It is, therefore, in the agency’s best interest to take the time and effort to develop a deep level of trust with their clients. Agencies do this by maintaining exceptional customer service. Furthermore, they must ensure that only CVs of candidates with suitable skills are put forward for vacant positions.

If an agency does their job correctly, candidates should not need to work with agencies on a repeat basis. Although, agencies must still take care of their applicants or they risk losing them to competing recruitment firms.

To do this, recruitment agencies invest heavily in state of the art recruitment software. Recruitment technology enables agencies to keep track of the intricate details of every role they are working on at any one time. Additionally, it enables consultants to keep candidates and clients informed of each others progress throughout their entire journey.

Who Pays Recruitment Agencies for their Services?

It is always the employer who pays a recruitment agency for their services, never the job seeker. Any recruitment agency that tries to charge candidates for its services is doing so illegally.

Pricing structures vary from agency to agency, but most calculate fees as a percentage of a candidate’s salary. So for example, let’s say a job is advertised at £45,000 and the client agrees to pay a fee of 15%. If the client hires a candidate through the agency, they will pay a fee of £6,500.

This sounds like a lot for something the client could have done themselves. However, a familiar quote in business is that time equals money. As the hiring process is so time-consuming, it is often more cost-effective for companies to outsource their hiring requirements to a recruitment agency.

It’s also worth remembering that the client won’t pay anything to the the agency unless they make a successful placement.

Are all Recruitment Agencies the Same?

Not all recruitment agencies are the same. They fall into many different categories and their different methods of operating suit recruiting for different kinds of vacancies.

We discuss the differences between recruitment agencies vs recruitment consultants in another post. If you’re wondering which best suits your needs, you may find this useful.

Contingency Recruitment

Where businesses use recruitment agencies to find permanent employees, they are usually providing a contingency recruitment service. This means that the Recruitment agencies get paid by the employers only once they make a placement. Doing business this way often results in employment agencies doing a lot of work for which they may not get paid. Hence the term contingency.

Retained Business

Where a recruitment firm focuses on finding rare skills for harder to fill roles, they usually ask for a retainer. A retainer is an up-front fee, the purpose of which is to guarantee exclusivity for the agency finding the candidate.

Where businesses work with headhunters, they can expect to have to pay a retainer.

Temp Agency

Recruitment agencies who source and place candidates in temporary positions operate in a very different way to those described above. More often than not, the clients’ such agencies work with require temporary staffing in the form of seasonal or short-term vacancies. The length of these opportunities can last anything from just a few hours, weeks or months.

As the nature of their business is so very different, so is the way they make money. These agencies usually charge a monthly fee and a percentage of the staff members hourly rate. Additionally, temp staff work for the agency who place them, rather than the company they do the work for.

This means that they still pay PAYE and National Insurance and they recieve the same holiday pay as regular employees. However, this is all dealt with by the agency.

Temporary positions can and do often result in the candidate securing a full-time position with the employer. It’s just as important, therefore, that recruitment agencies diligently source staff for temporary positions.

Contract Recruitment

While contract and temporary employees are both temporary employees, there is a massive difference between the two. Where temps work on an hourly basis and employed by the agency, contractors are self-employed and are hired on a ‘day rate’.

When an agency places a contractor, the agency earns a fee which is a percentage of the contractors day rate. Contractors must make provisions for their own holiday entitlement and do not receive benefits in the same way as regular employees of the business.

The way contractors pay their taxes has been the cause of much debate in recent years. Up until recently, one of the benefits of being a contractor is that they can claim tax back on their expenses. Although the tax rules governing contractors, known as IR35, is currently under review. The outcome of which is likely to make hiring people on a contract basis less attractive to employers.

In Closing

Recruitment is an incredibly complex topic. Hopefully, after reading this article you have a better idea of what recruitment agencies do. So next time you submit your CV to job advert, you understand the process it will go through to get you a job. Furthermore, we hope you now understand better the different types of job roles available through an agency.

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