Human Resources Mysteries – What does a Recruitment Agency do?

Recruitment agencies remain a mystery to many who have not worked with them. What is their real purpose? Are they worth it? What do they have to begin with? Companies? NGOs? Employers? Are you a government official? So many questions… Let’s clarify a few things.

First, agencies are basic companies with employees. They pay taxes, make profits, and try to be competitive in a niche market. On the market there are a few global high rollers that are present in several countries (like Lugera & Makler, Adecco, Trenkwalder), a few small agencies that specialize on a niche, are good at it and actually make profit (like SAP recruitment) and several others which try to survive (but most of the times don’t).

Recruitment agencies are responsible for two main activities. They help candidates find jobs and assist other companies in finding qualified candidates to fill their open positions. The agency acts as a mediator in the marketplace between companies searching for candidates and those who are looking for them. Many agencies (I say “most” because they all did it but I don’t think all are in the same position) offer little or no services to candidates, and are paid by companies.

The following services are offered by a recruiter to candidates (basic services free).

– Receiving the candidate’s resume and putting it into a database that helps search for candidates with the desired skill. Agencies operating in the same market face intense competition because they eventually end up with the same database. Small agencies with inexperienced staff can’t compete against large agencies with vast lists of candidates they can search within minutes.
– Assisting candidates in creating a professional resume (sometimes for a fee);
– Evaluate the candidate’s ability to use tests (IT or language tests, professional psychological tests, or during interviews).
– Offer improvement tips (sometimes paid service) and offer to include them into training or coaching sessions (also usually paid service).
– Sending the resume of the candidate to employers looking for open positions, according their skills (mostly free service).
– Offer feedback to candidates in case they are rejected or mediate the salary offering process (mostly for free).

A recruitment agency provides the following services to a company:

– Search for resumes in their database
– Place ads on the right recruitment channels
– Test and interview candidates
– Consider the most qualified candidates for the positions available.
– Candidates can be replaced free of charge if they leave or are fired for no reason (depending on the position).

How does the hiring process work

1. A client of a recruitment agency opens an opening and offers the position to one or more agencies depending on their internal requirements, policies, or the terms of the signed contract.
2. A client might be required to pay an upfront fee. This is used for placing ads and for the initial time spent interviewing. The fee is non-refundable. The fee is not refundable.
3. Agency places ads, selects resumes and interviews candidates
4. Agency provides a final list with the top candidates for the client
5. Client interviews final candidates, and offers one or more;
6. If the position(s), is covered, taxes will be paid and the process stops. Otherwise, the recruitment process begins again. Multiple agencies may work on the same job, but the money goes to the one that fills it first. The rest are just wasting time.

A recruitment agency is just like every other company. It is a service provider. Its employees include recruiters (the ones who actually recruit and select), sales people (who search clients and sign contracts, sometimes in small agencies), and support people (like financial people, building maintenance workers, or drivers, and any other position that is necessary for a company’s efficiency to function efficiently).

I hope that the role and responsibilities of a recruitment agency are now clear. You can comment below if you have further questions.

All the best!

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