Types of Employment Agencies

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In today’s highly competitive job market, you may decide to enlist the services of an employment agency to help you find your next position. What's an employment agency? There are a variety of different types of employment agencies that help job seekers get hired.

The one that is most appropriate for you will depend upon your work history (are you an entry-level candidate or a seasoned professional?), your career field, possibly your geographical location (do you want a local job or are you willing to relocate?), your flexibility (are you able to accept a part-time or a temp-to-hire position?) and your skill set.

Types of Employment Agencies

Review the information below to learn more about each type of agency and how they operate.

Traditional Employment Agency
A traditional employment agency assists job seekers in finding work, as well as helping companies to hire staff.

Although this is increasingly unusual, some firms charge the job seeker for their services. Before you sign a contract with them, be sure to clarify, upfront, if there will be a fee involved.

Other traditional employment agencies are paid by the employer. Many agencies specialize in a particular industry, such as sales and marketing, accounting, human resources management, legal, sports, or IT career searches.  In most cases, I would not recommend using an agency that charges the job seeker. Given the number of agencies that are retained by employers to find a talented job candidate pool, most people will do just as well to submit their resumes, free of charge, to these agencies for consideration.

Contingency Employment Agency
A contingency agency is paid when their candidate is hired by the employer. Some contingency agencies charge the candidate, and you should be careful to clarify who pays their fee before you sign up. These types of firms are most often used for low and mid-level searches and they often send a large number of resumes to the employer.

When applying for a position through a contingency agency, you will likely be competing with candidates who found the job opening from a variety of sources, including the company’s HR department, job boards, and possibly other recruiters.

Retained Search Firm / Executive Search Firm
A retained search firm has an exclusive relationship with the employer. Search firms are typically hired for executive- level and senior-level searches and for a specific period of time to find a candidate to fill a job. These firms specialize in sourcing and contacting the best candidates they can find for an employer, and often will even approach executives who are not actively looking for a new job to see if they can entice them away from their current employer. Sometimes referred to with the slang term, “headhunters,” retained search firms are paid expenses, plus a percentage of the employee's salary, regardless of whether the candidate is hired.

Retained agencies will be thorough in reviewing the candidate’s qualifications before sending them to the hiring manager, as their agreement with the company is to present only the most appropriate applicants for the position.

Temporary (Temp) Agency
Temporary agencies are employment agencies that find employees to fill temporary jobs.

For example, temps are often hired to work during seasonal increases in business, during tax season, during harvest seasons, or to cover vacations or illnesses. Temp agencies often also help to place professional consultants in short-term assignments.

Many temporary agencies have expanded their role in the employment sector to fill "temp to perm" positions where the position starts out as a temporary job, but could become permanent if the employer decides to hire the candidate.

Temporary staffing agencies (like, for example, Spherion, which finds temp work for people in the office / administrative, light industrial, non-clinical medical, and customer service sectors) may place job candidates on retainer where they assign them to temp jobs as these arise. The staffing agency is the employee’s official “employer” who issues the paycheck.

They may also provide benefits like health insurance, child care allowances, or vacation pay. If a temp job turns into a permanent position, then the relationship with the staffing agency ends and they are paid directly by their new employer.

Suggested Reading: How to Find a Recruiter | Tips for Choosing a Recruiter