Before hiring a recruiter, it’s essential to understand the key differences between the various types of recruiting companies. Those unfamiliar with these differences might mistakenly use the terms “staffing agency” interchangeably with “recruiting firm”. While the basics are similar, hiring the right type of firm will determine your hiring success.
Let’s begin with the basics.
What is Recruiting?
Recruitment or Recruiting refers to the process of identifying, attracting, interviewing, selecting, hiring, and onboarding employees. In other words, it involves everything from the identification of a staffing need to filling it.
What is a Recruiting Company?
A Recruiting Company (also referred to as Recruitment Firm) is a company that recruits (sources) candidates for open jobs. A Recruiting Company is hired by an organization when they have an open job. A company will typically hire an external Recruiting Firm when they need assistance identifying candidates. This situation may occur for several reasons, such as the lack of an internal recruiter or the pool of qualified candidates is small due to specialization or current employment rates.
There are different types of recruitment firms. The two most common are Executive Search Firms and Staffing Agencies.
Executive Search Firm
An Executive Search Firm is a company that primarily recruits professionals at the executive and mid-level. They may also be referred to as a search firm, headhunters, or a recruiting company.
Companies that recruit temporary junior to mid-level professionals are referred to as staffing agencies.
How do recruiters make money?
Recruiters are paid for their services by the company that engages them. The primary difference between retained recruiting and contingent recruiting is when payment is received for services. There are benefits and clear differences in the services received in each scenario.
When an organization engages a retained search firm, the hiring company pays an upfront fee before the recruiters search for, identify, and present candidates fill an open job. The hiring company also agrees to work exclusively with the recruiting firm. Often the recruiting firm will receive percentages of the total fee at various milestones during the search, such as presentation of the first five candidates, when interviews begin, and when the offer is given to and accepted by the candidate of choice.
When an employer hires the recruitment company for a contingent search no upfront fee required. Instead, the recruitment company receives payment only when the candidate they present is hired by the organization. A company may engage more than one recruiting firm if they are taking the contingency recruiting route.
What are the benefits of using a recruiting firm? How do I select the best recruiter? Why use a retained recruiting service versus a contingent?
There are many benefits to working with a retained search firm like TurningPoint Executive Search. First and foremost, retained searches yield higher caliber candidates who fit most, if not all of a company’s needs. Recruiters with a proven track record of making successful placements (and the retention rate to back it up) will help you find dynamic new hires that will be successful and are more likely to stay long-term.
More often than not, a company will choose to retain an outside recruiting firm rather than utilizing an in-house hiring manager exclusively because of the complexity of the role or the organization itself. Retained recruiters have a deep pool of candidates, many of whom are not actively looking to change jobs. These employed, top-performing, passive candidates can be hard to find. Retained recruiters invest time to research and maintain deep networks across industries, domains, and job functions. Additionally, retained search firms are typically working on fewer roles at one time, allowing the recruiter to dedicate more time to search deeply for high-quality candidates other recruiters would miss. These key differentiators between hiring managers and retained executive recruiters are extremely important to consider when searching for uniquely qualified talent or a senior-level, high-salary, pivotal position.
Recruiters tip: Investing in a hiring expert with a “partner” mindset who is knowledgeable across industry and job function will help you find higher caliber candidates.