If you are a job seeker and you haven’t specified clearly what you are looking for, you are probably getting calls or emails from different types of recruiters offering you different types of positions with all kinds of companies. They may confuse you even more by introducing themselves as a certain type of recruiter that you never heard of. So here’s a high level primer of the different types of recruiters you may encounter.
Internal, Inhouse or Corporate Recruiter
An Internal, Inhouse or Corporate recruiter is the most common type of recruiters that you will probably encounter. Internal recruiters work for and source full-time employees for the company they work for and are paid a salary and benefits like any other employee. Companies often use contractors to work as recruiters to avoid paying an outside agency fees effectively insourcing this activity.
Example: Large companies like Google, Amazon, US Army, Bank of America, Walmart
A Contingency Recruiting Agency does a full-time employee search on a contingency (paid only if they find a candidate) basis for a client company. The recruiter is responsible to do the initial recruiting, screening and interviewing and arranging interviews with the candidates for the client/company. The company pays either a flat fee or a percentage of the first year’s salary usually 15-35% depending on the difficulty. Jobseekers do not have to pay a fee. A lot of regular staffing companies typically offer contingency services too. They will typically advertise these jobs as ‘Direct Hire’ or ‘Contract to hire’ to indicate they are different than the regular staffing positions.
Example: Robert Half, Spherion, Matrix-FA
A Retained Agency is similar to a contingency recruiting with the main difference that the client company pays a retainer (fixed upfront amount) fee to have that company perform a search. A portion of the search fee is paid upfront and the remainder is due upon a successful hire. The initial retainer fee is paid irrespective of whether a placement is made. This is more typical for higher level positions to incentivize the recruiter to spend time on a low probability of placement. (It is harder to find a CEO, CFO as opposed to a software developer) Such firms may also call themselves Executive Search firms to distinguish the kind of talent they acquire.
Example: Korn Ferry, Witt Kiefer
PS: Both Contingent and Retained Search companies are also commonly called “Headhunters”. (A term many recruiters don’t like).
An Outplacement Agency provides job seeking assistance to downsized/displaced/riffed employees. Often the employer will hire an outplacement company to help their recently downsized workforce find jobs as a matter of goodwill. Outplacement services provide resume and interviewing assistance, career counseling, etc. Several of these companies are divisions of larger staffing companies.
Example: Right Management (Manpower), Lee Hecht Harrison (Adecco), Challenger, Gray & Christmas
Staffing Agency (Temp/Contract)
A Temporary/Contract Staffing Firm hires temporary employees for a client’s company. The individual is employed by the staffing agency and the staffing agency pays all wages, employer taxes, medical insurance and benefits. For all purposes the individual is an employee of the staffing company but their work is determined by the client where they work. The client company pays a hourly rate for the contract/temp employee which is higher than the employee cost – the premium or markup to take care of the staffing company’s costs and profits in exchange for the flexibility and ease of hiring and terminating such resources.
Example: Volt, Adecco, Manpower, Aerotek
A lot of Consulting companies follow a similar model to staffing companies, although they typically provide higher skilled professionals like software engineers, finance and marketing professionals. The smaller and lower end Consulting companies operate more like staffing companies in that their employment contract is only valid until the project they are working on is ongoing.
Premier Consulting companies like Accenture, Cap Gemini, McKinsey differentiate themselves in that they don’t terminate employees when their consulting engagement is over. They either find them different projects or work on internal projects but continue to pay them even as consultants are on the ‘bench’ and not billing.