Recruitment agencies, staffing firms and executive search for employers

What do recruitment agencies and executive search firms actually do?

Recruitment agencies find, screen and introduce candidates for your vacancies, and are paid when you hire or as the search progresses. Executive search firms do the same for senior and board roles, with deeper market research and direct approaches to people who are not looking for a new job. Staffing companies employ or engage temporary and contract workers and supply them to you, and recruitment process outsourcing (RPO) providers run part or all of your recruiting function.

Many large groups offer all of this through separate brands for temporary staffing, professional recruitment, executive search and outsourced recruiting. Specialist boutiques focus on one function, sector or country. In some markets, Japan above all, agencies are not a last resort but the main route for mid-career hiring.

What you buy is reach, speed and judgement: candidates you cannot see on job boards, a consultant's time to screen them and market knowledge about pay. How you pay for it varies more than the headline fee suggests.

Which agency model fits the role you are filling?

The commercial model shapes the agency's incentives, so match it to how hard, senior and frequent the hire is.

A contingency agency is paid only when you hire someone it introduced, so a hard role may be one of many briefs on a desk. Retained search reverses the incentive: you pay in stages and the firm commits a team to research the whole market. With temporary staffing, ask for the charge rate to be broken down and compare the margin after statutory costs, not the markup over pay.

What should you check in an agency's terms of business?

Standard terms are written by agencies and can nearly always be negotiated before the first CV arrives, rarely after. These clauses decide what you actually pay.

How are recruitment agencies and search firms paid?

Contingency fees are usually a percentage of the hire's first-year base salary or total package, invoiced on the start date or on offer acceptance. In some markets, including India, Türkiye, Poland and Brazil, fees are often quoted as a number of monthly salaries, which you need to convert before comparing. Japanese agencies use theoretical annual income including expected bonus, and Gulf agencies often add housing and transport allowances to the base.

Retained search is commonly billed in three instalments, on signing, at shortlist and at placement, sometimes with a minimum fee; some firms now offer a fixed fee instead. Container search combines a smaller upfront payment with a success fee. RPO usually pairs a monthly management fee with per-hire or per-outcome fees, or moves to a pure per-hire price at volume. Temporary staffing is billed per hour or day worked.

Guarantees take the form of a sliding-scale refund or a free replacement if the hire leaves within an agreed period. Negotiate the length, remove conditions tied to invoice payment timing and make sure probation dismissals are covered. Fees are usually quoted excluding VAT, GST or KDV.

How do you brief an agency and avoid common mistakes?

Most poor agency results trace back to a poor brief. Give the agency what you would give an internal recruiter: the scorecard, the pay band, the interview process and an hour with the hiring manager. Explain why the role exists, what success looks like after a year, which must-haves cannot be traded and why a strong candidate would move.

Agree the process before the search starts: how many candidates you expect to see and by when, what the agency screens for, how quickly you will give feedback, who presents the offer and how the agency should describe your company. Agencies are your voice in the market.

Avoid sending one role to many contingency agencies: it creates a race to submit CVs, duplicate introductions and fee disputes. One or two well-briefed agencies usually do better, and for senior or confidential roles one retained firm is the norm. Ask how many live briefs the named consultant holds, because you hire the consultant, not the brand.

Finally, review every search on shortlist quality, time to shortlist, offer acceptance and twelve-month retention rather than CV volume. If you pay fees for the same role family every quarter, build a pipeline through referrals, direct sourcing or a talent pool instead.

Frequently asked questions