Recruiting Firm or Staffing Agency, what is the difference? The terms Recruiting Firm and Staffing Agency are sometimes used interchangeably. In some ways they can be similar. Each company has its own vision, mission and offerings. The lines are often blurred between the two. What is important is to know what you need and to work with whomever you feel the most comfortable.
Never be afraid to ask questions. You have a right to know what it’s going to cost. So, don’t be afraid to ask for this information. Ask about the guarantee being offered. Ask how long the firm will be working for you to help you find an employee.
It is extremely rare to find either a Recruiting Firm or a Staffing Agency that charges the job seeker a fee. It doesn’t hurt to ask just to be sure. However, there are not many left who operate under the model of charging job candidates. How to Work With a Recruiter
Staffing Agency versus Recruiting Firm
Staffing Agency
Staffing Agencies are most commonly known for providing temporary or contract staff. Ideally, they have a database of staff they can send out on a moment’s notice to fill any temporary need. These people are on the Agency’s payroll and therefore an employee of the Agency.
Most people think of Staffing Agencies when they need someone to cover while an employee is out. This can be for more than a day, (e.g., on medical leave, short or long term disability, to fill in until a new permanent employee can be found, or to try out and possibly hire for an open position). After a temporary worker is with a company for a certain amount of time, they may convert over to a full time direct hire employee of the Company.
Temporary staff obtained through an Agency means the Agency is responsible for paying all the payroll taxes, worker’s compensation, any required insurance and payroll processing fees. Of course all of this is added into what you, as the Company using these services, are billed plus a commission or markup on the hourly rate.
The conversion to a permanent employee from temporary status can range from a small additional charge to the full amount of a normal placement.
Some Staffing Agencies also have a direct permanent placement side.
Recruiting Firm
Recruiting Firms most commonly recruit for new talent for specific open positions for specific client companies. Whether part time or full time, the new hire is typically, immediately an employee of the Company and is never on the Recruiting Firm’s payroll.
The Company pays a fee to the Recruiting Firm for finding the new employee. Typically it is a one-time fee and is a percentage of the annual salary offered to the candidate. Therefore, it is important to find out in advance what is included in the calculation. Some firms include commissions, bonuses and salary increases given during the first year of employment as part of the base calculation.
Some Recruiting Firms also offer temporary or contract services, and many operate in the same way as a Staffing Agency. It is important to ask if this is an option and what the terms are.
Guarantees
Most Recruiting Firms and Staffing Agencies offer either a replacement guarantee or a pro-rated refund should the new hire leave or be terminated within the first ninety days of employment.
A replacement guarantee means the Firm will find someone else for the Company if the first placement leaves or is terminated for cause. Find out in advance how long the Firm has to find this replacement. If they cannot find someone, is there a refund policy and if so, how does that work.
In my opinion, pro-rated refunds usually work better for the Company. The Company isn’t out all of the money and waiting for the replacement employee for months or years. Being locked into one Firm/Agency limits your ability to move forward.
Most importantly, whether you are working with a Recruiting Firm or a Staffing Agency, you need to feel comfortable talking with the person you are paying to find your next new employee and have a clear idea of what to expect.
Both need to have access to a variety of job candidates. Thus, for job seekers, my advice is the same, work with the person you feel the most comfortable with and have the highest level of trust.