Recruitment agency
A recruitment agency finds and introduces candidates for an employer's vacancy, for a fee the employer pays. Agencies that place people in permanent jobs with you differ from staffing firms that employ temporary workers and supply them to work under your direction.
Two services that share one name
“Recruitment agency” covers two different arrangements, and UK law names them separately. An employment agency finds people for employment with you: the candidate you hire becomes your employee. An employment business supplies people who are, or will be, in its own employment to work for you and under your control (Employment Agencies Act 1973, section 13). Many firms do both, so the contract should say which service you are buying for each role.
In both cases the fee comes from you. Section 6 of the same Act bars agencies, outside prescribed exceptions, from charging candidates for finding them work.
How permanent placement is charged
The two common models differ in when you pay, not only in how much:
- Contingency. You pay only if you hire someone the agency introduced. Several agencies can work the same vacancy, and none is paid for the search itself.
- Retained search. You pay in instalments as the search progresses, whether or not a hire results. It suits senior or hard-to-find roles, where the agency approaches people who are not applying anywhere.
Percentages vary by agency, role and market, so judge a quote on its terms rather than on a headline rate. Check what the fee is calculated on (base salary only, or bonus and benefits too), what happens if the new hire leaves within the first months, and how long an introduction stays “owned” by the agency if the same person later applies to you directly.
Hiring a temp permanently
An employment business may charge a transfer fee when you take on one of their temporary workers as your own employee. In Great Britain, regulation 10 of the Conduct Regulations makes that fee unenforceable unless the contract lets you choose an extended hire period instead. No transfer fee can be enforced once the later of two periods has passed: 8 weeks after the worker’s last day with you, or 14 weeks from their first day on the assignment.
Briefing an agency
Give the agency the same material you would give an in-house recruiter: a call with the hiring manager, the hiring plan and the criteria you will use to decide. Ask for a short list with reasons for each name rather than a stack of CVs. A contingency agency is paid on a hire, so how you define a good candidate up front is what keeps its shortlist aligned with yours.