A Quick Behind-the-Scenes View of Recruiting

I’m often asked questions about recruiters and the staffing industry, so I thought I’d take a few minutes to explain some of the various terms associated with them.

The generic term “recruiter” applies to a person who typically has first contact with you. They may work within a corporation, recruiting only positions for that company.  These are “in house” or “internal” recruiters. You may see their job title as “talent acquisition specialist” or “recruiter.” They often conduct the initial interview and then pass the top candidates on to a hiring manager for further discussion.

Recruiters could be employed by a staffing or recruiting firm. These are external recruiters or “headhunters.” They work to fill openings with any number of client corporations. Their role is to conduct the initial interview/screening and then pass qualified applicants on to the client company for further interviewing.

Let’s turn to how recruiting firms operate. In no case does the job seeker pay anything. For permanent placements – positions where the employee is a direct hire and immediately becomes employed (and paid) by the hiring company – there are two methods of payment, contingency and retainer.

Contingency searches typically occur from the manager level on down. The employer will usually allow several firms to work simultaneously on filling the opening. The search firm only makes a commission if  their candidate gets hired.

Retained searches typically occur at higher levels within an organization. An employer will retain the services of one search firm, typically paying a portion of the anticipated fee up front, another portion upon hire, and a final portion after the new hire has been on board for a short time.

If it helps you to understand better, think of how someone might hire an attorney. If you’ve been in an accident, most attorneys taking your case will work on a contingency basis. You only pay them if you win the case.

On the other hand, a corporation or an individual might hire an attorney on retainer. A lump sum is paid up front with the client and attorney settling up any remaining monies owed once the attorney’s work is complete.

The third way a staffing company is paid is by invoicing the employer based on the hours a person works. This arrangement, as you might expect, typically occurs with hourly workers where there is no direct hire. The worker is actually employed by the staffing company but shows up for work at the client corporation.

The client corporation and staffing company often have an arrangement whereby the client corporation can hire the worker after a certain number of hours have been worked. This allows the client to try the employee before they hire them. We’re seeing more of this arrangement than ever before.

I hope you now have a better understanding of the recruiting business. It serves a valuable role in helping corporations hire folks. Make recruiters aware of who you are and what skills you possess.  Good luck!