How do recruitment agencies work?

Recruitment agencies act as bridges between job seekers and employers, providing hiring solutions for both multiple and individual placements. In this article we look at how recruitment agencies operate and what you can expect when working with one.

20 mins read

14 May, 2024

As the world’s largest family-run recruitment company Reed, and other recruitment agencies, play a pivotal role in streamlining the hiring process, offering comprehensive services tailored to the needs of both employers and jobseekers.

Often recruitment agencies specialize in recruitment in specific industry sectors – some concentrate on technology recruitment, others specialize in finance recruitment, whereas larger recruitment companies like Reed, hire specialists in each sector and cover 20 different industries all in all – from procurement, to education, tech, accountancy and scientific.

Using a recruitment company makes hiring easy. Here’s how working with Reed works:

Talk to your local industry expert
Discuss your hiring needs, and goals and refine what your business is looking for in a voice, video call, or face-to-face meeting with your local Reed expert who specializes in recruitment in the sector you are looking to hire in.
Review your hand-picked talent
Our experts use their local industry networks, access to our database of 22 million CVs worldwide, and the latest sourcing tech, to provide you with a shortlist of potential people for your role(s). You can simply review the applicants and select who you would like to interview.
Longest guarantees available
We will help you onboard your new hire, in fact, we’re so confident in the professionals we place, that we offer up to an 18-month guarantee on your new, permanent hires.

What is a recruitment agency?

Also known as an employment agency, staffing agency, or recruitment consultancy, a recruitment agency serves one purpose, and that is to connect employers with the job seekers they need for business to flourish.

Recruitment agencies have a plethora of other names, while the underlying principles of how they operate often remain the same. Many offer different services and across different industry practices.

Here are a few descriptions of recruitment agency operating models.

Temporary staffing agencies

These agencies specialize in providing temporary or contract workers to companies for short-term assignments or projects.

Contingency agencies

Contingency agencies work on a “no win, no fee” basis. They only receive payment if they successfully place a candidate with the company

Retained recruitment agencies

Retained agencies are paid upfront or in stages throughout the recruitment process. They often handle high-level executive searches or specialized positions.

Niche agencies

Niche agencies focus on specific industries, job types, or skill sets. They have in-depth knowledge and networks within their specialized areas.

What does a recruitment consultant do?

So, what are recruitment consultants? Recruitment consultants, also known as recruiters or headhunters, play a pivotal role in connecting job seekers with employers.

Their primary responsibility in working for the above agencies is to source, screen, and match candidates to job vacancies within client companies. This involves understanding client requirements, such as job specifications and company culture, and utilizing various channels like job boards, social media, and networking to attract suitable candidates.

Once potential candidates are identified, recruitment consultants conduct interviews, assess qualifications, skills, and experience, and evaluate candidate suitability for specific roles. They also coordinate and schedule interviews between candidates and clients, providing support and guidance to both parties throughout the hiring process.

Recruiters often provide advice and assistance to candidates, helping them improve their CVs, prepare for interviews, and negotiate job offers. On the client side, they act as strategic partners, offering insights into the job market, salary trends, and recruitment strategies to attract top talent.

Administrative tasks like maintaining candidate databases, managing job postings, and ensuring compliance with employment laws and regulations are also part of their duties.

At Reed, as well as matching job seekers with employers, our consultants provide a host of free resources to help clients and candidates navigate each step of their journey. Our free guides, eBooks, tools, and webinars are designed to make the recruitment process smooth and successful, from interviewing right through to pre-employment screening and onboarding.

How much do recruitment agencies charge?

The cost of recruitment services varies depending on factors such as the type of agency, the level of service required, and the complexity of the position.

For permanent roles, staffing agencies will usually charge the employer a percentage of the candidate's base salary, which may be anything from 10% to 30% – the higher end of these percentages are generally for top-earning roles.

Likewise, for temporary work, the charge will be a percentage of the candidate's hourly or daily rate and could be up to 30%, depending on the pay scale.

It’s worth noting that jobseekers are not required to pay for recruitment agency services, and should certainly question any request for payment. Instead, financial costs are typically managed between the agency and employer, with no interruption to the jobseeker throughout the hiring or onboarding process.

The benefits of using a recruitment agency

So, why use a recruitment agency? Using recruitment agencies offers several benefits for employers compared to relying solely on their own recruitment methods. Here are some key advantages:

Access to a wide pool of candidates: recruitment agencies typically have extensive databases of candidates across various industries and job roles. This allows employers to access a larger pool of potential employees, at all seniorities, than they might find through their own networks or job postings.
Expertise and specialization: recruitment agencies often specialize in specific industries or job roles, giving them valuable expertise in sourcing and evaluating professionals for those positions. This specialization can result in a more efficient and effective recruitment process, as agencies understand the specific skills and qualifications required for different roles.
Time and resource savings: outsourcing recruitment to a specialist recruitment agency can save employers time and resources that would otherwise be spent on advertising, screening CVs, conducting interviews, and other administrative tasks. This allows hiring managers to focus their resources on core business activities while the agency handles the recruitment process.
Cost-effectiveness: while there is typically a fee associated with using recruitment agencies, this cost is often outweighed by the savings in time and resources, as well as the potential cost of making a bad hire. Recruitment agencies can help employers find quality, qualified, experienced candidates more quickly, reducing the time to fill open positions and minimizing the impact of vacancies on business operations.
Access to passive candidates: recruitment agencies have networks and resources to reach passive candidates who may not be actively seeking new opportunities but could be open to the right offer. This expands the talent pool and increases the likelihood of finding candidates with the desired skills and experience.
Screening and vetting candidates: staffing agencies typically offer thorough screening and vetting services to ensure that candidates meet the requirements of the job and are a good fit for the company culture. This reduces the risk of hiring mistakes and increases the likelihood of finding candidates who will succeed in the role.
Flexibility and scalability: working with a recruitment agency will also offer you flexible staffing solutions to meet the changing needs of your business, whether you need to scale up your workforce quickly, or find permanent hires. This flexibility can be especially valuable during periods of growth or transition.

These benefits make recruitment agencies a valuable resource for employers looking to streamline their recruitment processes and find the best talent for their organizations.

How to work with a recruitment agency

When considering whether to engage a recruitment agency, you need to weigh up the pros and cons. Firstly, you need to evaluate your hiring needs, including the number of people needed, the specificity of positions to be filled, and any time constraints. If you lack the in-house recruitment expertise or resources for effective hiring or require niche or executive talent, outsourcing to a recruitment agency becomes more appealing.

Above all, be ready to provide your chosen agency with information about your organization, its aims and ambitions, culture, people, and strategy. It can help to invite the recruitment consultant to your workplace to meet in person at least once, enabling them to get a feel for the organization and who might best fit.

How to find a recruitment agency for you

To find the right agency, you need to conduct thorough research. This involves assessing the agency's reputation, track record, and industry expertise. Reading reviews, seeking recommendations from peers, and examining case studies can provide valuable insights into an agency's capabilities.

As an employer, you should consider the agency's recruitment methods and network. A reputable staffing agency should have access to a diverse pool of candidates, including passive candidates who may not be actively seeking employment. The agency's approach to candidate screening, interviewing, and assessment should align with the employer's hiring standards and objectives.

Why choose Reed?

Reed is a popular choice for many organizations. With our 60+ years of experience in specialist recruitment, we have earned our stripes time and again for successfully placing talented professionals in roles spanning accountancy and finance to technology –recruiting across 20 sectors worldwide.

Employers often find themselves inundated with CVs that aren’t suitable for their vacancies, leading to extra pressure on their time and resources. Using our services cancels out this risk as we have access to 22 million candidate CVs across the globe, meaning our teams can often pinpoint suitable matches within days.

We know it can be daunting for employers to put their faith in a recruitment agency, especially when it’s their first experience, but we pride ourselves on listening to our clients’ requirements and making sure their needs are met. After all, as a multi-award-winning company, we have a reputation to uphold!

Registering with a recruitment agency

Once you decide to work with a recruitment agency, you need to provide your recruitment partner with essential information to facilitate effective collaboration. This includes a detailed job description outlining key responsibilities, required qualifications, and desired skills – your consultant can help work on this with you. Providing insights into the company culture and values – and a copy of your employee value proposition if you have one – can also help the agency identify those who would be a good fit.

Clear communication regarding budget, timeline, and expectations is crucial for a successful partnership. You should also discuss fee structures, including any upfront costs or contingency fees. Here, you should also establish a timeline for the hiring process and set realistic goals in terms of candidate quality and quantity.

Lastly, when working with a recruiter, you need to maintain open communication with the agency throughout the hiring process. Regular updates, feedback on candidate submissions, and constructive dialogue can enhance collaboration and ensure alignment between your needs and your agency's efforts.

Questions to ask a recruitment agency

You can assess a recruitment agency's suitability for your company’s needs by examining several key factors.

Firstly, evaluate the agency's track record and reputation within their industry. Testimonials, case studies, and online reviews can provide insights into the agency's past successes and client satisfaction levels.

Secondly, employers should consider the agency's specialization and expertise in recruiting for their specific roles or industry niche. A recruitment firm with relevant experience is more likely to understand the unique requirements of your vacancies.

Before, partnering with a recruitment company, you need to also assess the agency's recruitment process and methodologies. Transparency regarding their sourcing strategies, candidate screening techniques, and quality assurance measures can help establish trust and confidence. Additionally, don’t feel that you can’t enquire about the agency's candidate pool size, diversity initiatives, and time-to-fill metrics to gauge their ability to deliver timely and diverse talent solutions.

In terms of information provided by the recruitment agency you are looking to partner with, the recruiter will normally provide you with detailed proposals outlining the services offered, including recruitment strategies, timelines, and fee structures. A good agency, like Reed, will also offer you insights into market trends, salary benchmarks, and talent availability to help you make informed decisions. Clear communication channels, regular updates, and ongoing support throughout the recruitment process are essential indicators of a reliable and collaborative partnership.

Ultimately, by carefully evaluating these factors and leveraging the information provided by the recruitment agency, employers can make an informed decision about whether their services align with their hiring needs and objectives.

How do recruitment agencies find candidates?

Recruitment agencies employ various methods to find candidates. These strategies often include:

Online job boards

Recruitment agencies frequently use job boards such as our sister company Reed.co.uk and LinkedIn, to advertise vacancies and attract potential candidates. These platforms allow recruiters to reach a wide audience and filter applicants based on the agreed criteria.

Networking

Building and maintaining a strong network of professionals is crucial for recruitment consultants within recruitment agencies. They often leverage their connections within industries to source suitable candidates through referrals, recommendations, and professional associations.

Direct approaches

Recruiters actively search for candidates who possess the skills and experience required for specific roles. They may use techniques like headhunting, where they directly approach individuals who match the job criteria, whether they are actively seeking new opportunities or not.

Database search

Recruitment agencies maintain extensive databases of candidates who have previously registered with them or applied for roles. They use sophisticated search algorithms to match candidates to current vacancies based on their qualifications, experience, and preferences.

Advertising and marketing

Recruitment agencies invest in advertising and marketing campaigns to promote their services and attract both clients and candidates. This may involve online advertising, social media campaigns, television, radio, and traditional methods such as print media.

Reed stands out from other recruiters in several ways:

Longevity and reputation: with over 60 years of experience in the industry, Reed has established itself as a trusted and reputable recruitment agency globally. Its longevity demonstrates a track record of success and reliability.
Wide range of specialisms: Reed offers recruitment services across various industries and sectors, catering to a diverse range of clients and candidates. Whether it's finance, health and care, IT, or engineering, Reed has expertise in 20 industry sectors worldwide.
Innovative technology: Reed invests in cutting-edge technology and digital platforms to streamline the recruitment process for both clients and candidates. This includes AI-driven candidate matching algorithms, online assessments, and video interviewing tools.
Personalized approach: Reed prides itself on delivering personalized service to clients and candidates alike. Recruiters take the time to understand the unique needs and preferences of each individual, ensuring the best possible match for both parties.
Commitment to diversity and inclusion: Reed actively promotes diversity and inclusion in the workplace and strives to connect employers with candidates from diverse backgrounds. We recognize the value of a diverse workforce and work towards creating equal opportunities for all.

What to expect from a recruitment agency

When engaging with a recruitment agency, employers can expect a comprehensive and structured process designed to identify and secure top talent efficiently.

The timeframe for completing the recruitment process can vary depending on factors such as the complexity of the role, the availability of candidates, and the specific requirements of the employer. However, a typical timeframe for a permanent role from initial consultation to job offer can range from several weeks to a few months. Whether you are looking to recruit a permanent or interim member of your team, it’s essential to maintain open communication with your agency throughout the process to ensure efficiency and alignment with expectations.

Try to be open-minded and allow the recruitment expert to offer their advice on the job market and set realistic targets.

What’s the process once you’ve decided to work with a recruitment agency?

The following step-by-step guide outlines the typical journey you can expect to take as an employer when working with a recruitment agency:

1. Meeting with the recruitment agency

This is the first step in the process, you will need to meet with your recruiter to discuss your hiring needs, company culture, and specific requirements for the role.

During the consultation, your dedicated recruiter will gather detailed information to understand the scope of the position(s) you are hiring for, including qualifications, experience, and any specialized skills required. This meeting can be done over the phone, on a video call, or in person. At some point at the beginning of the process, it’s a good idea for the recruiter to visit your working environment, this will give them a real taste of your organization and allow them to sell the role to prospective candidates as best they can.

2. The agency posts the job advertisement

The recruitment agency crafts a compelling job advertisement based on the information provided by you. They will use their expert knowledge and experience to ensure the job ad covers all bases and will be as well received as possible. In most cases a recruiter will encourage you to advertise a salary band with a role as this will increase application numbers significantly.

Once, the description/specification is agreed upon, your recruitment specialist will advertise the vacancy using all channels possible and advanced search techniques for maximum exposure, to attract a diverse pool of candidates. These channels should include, job boards, such as Reed.co.uk, LinkedIn, and social media platforms as well as the recruiter’s own network. For really niche roles, or roles where a candidate pool can be sparse, your recruiter will headhunt for talent, this may involve searching in the recruitment agency's own database or using tools such as LinkedIn to search for prospective good matches.

3. The recruitment agency will contact the candidates

As applications for your open position start to come into the consultant through the various channels or candidates who have been headhunted show an interest in the role, your recruiter will assess their CV and set up a call with prospective candidates they believe match the specifications and talk them through the role. From this, they will gauge the level of interest from each person and their fit for the job, if they deem them to be a good fit they will book them in for a screening interview.

4. The recruitment agency will screen the candidates

A screening interview will usually be conducted face-to-face or via a video call to determine whether a professional is suitable for the role and company. These interviews are much shorter and less formal than job interviews.

In a screening interview, your recruiter will:

Discuss your role in more depth with the candidate and give them an introduction to your company
Ask the candidate some screening questions to evaluate whether they meet the basic requirements for the role
The recruiter will also ensure that the role aligns with the candidate's wants, needs, and requirements – helping to reduce the number of dropouts
Take any questions the candidate may have about the role and company

If a screening interview is successful, your recruiter will send you a shortlist with notes from the screening interview and the CVs of those candidates they think will be best for your open vacancy. From this shortlist, you can then select those candidates you would like to take to the next stage of the recruitment process which is the interview. At this stage, you need to confirm how many stages there will be in your interview process so that your recruiter can communicate this to the candidates.

5. Employers interview the candidates

Using a recruitment agency will save you a significant amount of time, your dedicated recruiter will arrange interviews between you and the chosen professionals from your shortlist, at the most convenient time for you. They will liaise with the candidates to ensure they know where they are going and manage communication efficiently to ensure a smooth process.

Recruiters will assist you in planning for the interview, and you could even use Reed’s AI-powered interview question generator tool, free, to create a list of valuable interview questions fast.

6. Feedback rounds

After interviews have taken place, the agency gathers feedback from both the employer and the candidates. This feedback loop allows for informed decision-making and adjustments to the selection criteria if necessary. At this point, the recruiter will organize any second interviews needed and where required provide the candidates with details of any tasks. At every stage, your recruiter will facilitate communication between all parties and address any concerns or questions promptly.

7. The candidate receives an official job offer

Once a suitable candidate has been identified, the agency assists with negotiating terms of employment, including salary, benefits, and start date. They act as intermediaries to ensure a fair and satisfactory offer is extended and accepted.

Throughout this process, the agency provides support and guidance to you and your candidate, facilitating a seamless transition.

8. Maintain communication with your recruitment agency

Even after the offer has been accepted, the recruitment agency you are working with may continue to provide assistance during the onboarding process. This may include coordinating paperwork, conducting background checks, and ensuring a smooth integration into your company culture. Your recruiter will check in with you and your new starter at regular intervals over the first 12 weeks to ensure everything is going well.

By following this structured process and leveraging the expertise of a reputable recruitment agency, you can expect to attract top talent and fill critical positions effectively and efficiently.

Employer responsibilities for agency workers

When employers engage with recruitment agencies to hire staff, they share various responsibilities to ensure fair and lawful employment practices. Here are some key responsibilities:

Legal compliance
Employers must ensure that the recruitment agency they choose complies with all relevant employment laws, including anti-discrimination legislation, minimum wage requirements, and regulations regarding working hours and conditions.
Job description accuracy
Providing accurate job descriptions to the recruitment agency is crucial. Employers should clearly outline job requirements, responsibilities, qualifications, and any other pertinent details to ensure that candidates are properly informed about the role.
Equal opportunities
Employers must ensure that their recruitment process, facilitated by the agency, promotes equal opportunities for all candidates regardless of age, gender, race, disability, religion, or sexual orientation. Discrimination in any form is unlawful and can lead to legal consequences.
Verification of candidates
While recruitment agencies typically handle candidate screening and verification, employers should still be vigilant in confirming the credentials, qualifications, and work experience of potential hires to ensure they meet the company's standards and job requirements.
Communication and feedback
Employers should maintain open communication with the recruitment agency throughout the hiring process. Providing timely feedback on candidates and collaborating closely with the agency can help streamline the recruitment process and ensure that the employer's needs are effectively met.
Contractual obligations
Employers are responsible for ensuring that employment contracts offered to selected candidates accurately reflect the terms and conditions agreed upon, including salary, benefits, working hours, and any other relevant provisions.
Payment of fees
Employers are typically responsible for paying any fees associated with using the recruitment agency's services. These fees may be based on a percentage of the hired candidate's salary or a flat rate, depending on the agreement between the employer and the agency.
Feedback and evaluation
After the recruitment process concludes, employers should provide constructive feedback to the recruitment agency regarding the quality of candidates sourced, the effectiveness of the process, and any areas for improvement.

Final thoughts

By fulfilling these responsibilities, employers can ensure a transparent, ethical, and legally compliant recruitment process when utilizing the services of a recruitment agency.

Whether you're an employer looking to build a high-performing team or a jobseeker seeking your next career move, partnering with a reputable recruitment agency can significantly enhance your chances of success in the competitive landscape of today's job market. Get in touch with one of our specialist consultants today.

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Employee tenure: long-term relationship or short-term fling?

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Long-term employee tenure

Increased productivity

Tenured employees tend to have a clear understanding of their roles and company goals due to their experience and time with the organisation. This familiarity with processes and procedures can allow them to work efficiently and contribute positively to productivity, as they are able to navigate the idiosyncrasies inherent in all companies. Quite often, they will have developed practices that enable the most efficient use of time to achieve objectives and outputs; and are then able to influence wider practices to spread the word.

Stability and commitment

Tenured employees will often feel more secure in their positions and so, can demonstrate greater commitment to the company. Their loyalty contributes to a stable work environment, which can positively impact team dynamics and overall organisational success. My current HR team has an average tenure of around 10 years, and this contributes to a very supportive and effective working environment – although how they’ve put up with me over the years is still a mystery!

Skill set and knowledge base

Over time, tenured employees accumulate valuable knowledge and skills specific to their roles. This expertise can not only be passed down to new hires, benefitting the organisation as a whole, but also help with integrating new technologies and processes, ensuring they work for the business. We all have a ‘go-to’ person in our companies who is the fount of all knowledge and can help give a perspective gained from years of experience and insight.

Company ambassadors

A company that retains its workforce builds a reputation for employee satisfaction. In a world where Employee Value Proposition (EVP) plays an important role in both retention and attraction, having employees who are aligned with the company ethos and happy to talk about why they’ve stayed so long, is a real asset. Plus, they are able to share this insight with new hires, acting as mentors and imparting knowledge and enthusiasm for the company.

Short-term employee tenure

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Career experience

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Versatility

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Openness

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In the tech sector, where much progress needs to be made in diversity and inclusion, allyship can solve many cultural challenges as well as create opportunities for tech-related careers.

Q: How important is allyship in the tech sector?

A: It’s no secret that businesses are struggling with digital skills gaps, which is hampering their ability to develop and remain competitive. This scramble to find tech-savvy talent means many companies are missing out on skilled professionals who have been offered higher salaries when they could instead showcase their commitment to diversity and inclusion. They could be looking to hire people who have been traditionally underrepresented in the sector, including women and people from ethnically diverse communities.

They could also invest in retraining existing staff who show enthusiasm and aptitude for tech roles. When experienced professionals mentor others, it can make a real difference to the business, not just in terms of filling jobs, but in creating a culture change where employees feel they can develop their careers within the organization.

Q: How can tech employers build a culture of strong allyship, and how does it work?

A: Allyship takes time to establish so should be viewed as a long-term investment. It involves a combination of top-down support with leaders dedicated to the in-house training and upskilling of individuals. Managers should also act as allies in support of team members taking on additional tasks to develop their skills.

Tech careers are fast-paced and require workers who enjoy learning about new developments, identifying where improvements and efficiencies can be made across the business with tech, and keeping abreast of trends. Pairing employees who can naturally form strong working relationships really helps, and the partnership should also be supported by regular feedback and measurable goals.

Consider setting up employee resource groups for underrepresented communities, where members can network and gain insight from external speakers and advocates to bolster their careers.

It can also help to cement your allyship plans by promoting it in your job adverts and on your website and social channels. It’s a great benefit so should be shouted about – especially by those who are involved. Encouraging people to spread the word on their own channels and through your employee ambassadors, can be hugely beneficial for business.

Q: What types of professionals make good allies? How should allyships be formed?

A: Anyone can be an ally, but the title is not something that can be self-proclaimed, but rather something recognized by the individual or group on the receiving end of the partnership. It is easy while having good intentions, to slip into ‘white knighting’, ‘mansplaining’, or other forms of negatively received behavior. To train yourself out of these habits, if you think you/the ally are prone, is to remember that the focus should be on the individual – their experiences, how they like to learn, and what they want out of the allyship.

It's a privilege to be asked to be an ally – and speaks volumes for the professional reputation of those selected for the role, usually by HR or senior leadership. But it’s important to be realistic about the partnership, what the ally can offer in terms of time and skills, and measurable outcomes.

Personality clashes happen sometimes, so it helps to have trial periods where both parties have time to settle into the partnership and work through any teething problems.

We’ve heard time and again from mentees how useful it has been to have that solidarity – someone in their corner giving them a professional and personal boost, and a new perspective on navigating an industry that can seem challenging at times.

Q: What forms of allyship work best – does it always have to be about practical support?

A: We’ve often found that practical and emotional support go hand in hand.

People wanting to learn new skills are often passionate about their futures and will naturally have concerns about that – as well as how they are progressing and what they want from the partnership. They might want assurances that they are on the right track, or be keen to demonstrate new knowledge. They may see their ally as someone to bounce ideas off as well as to help clarify in their own minds what they ultimately hope to gain from the relationship.

Other ways to be an ally include acting as a sponsor, a champion, or an advocate for individuals or groups. This might include promoting the allyship externally, standing up for individuals experiencing issues in their careers, or inviting members of underrepresented groups within the business to take on roles with greater visibility, at events or within internal communications.

Q: Organisations with a culture of allyship will be more attractive to job seekers. What other benefits are there?

A: Allyship is a benefit that all organizations should seek to offer. It can make the difference between an employee staying or leaving for pastures new. It can attract job seekers and inspire employees who may realize mentoring talents they didn’t know they had.

The rewards extend beyond the organization itself, into the community – and can make an employer sought out by schools, colleges, and universities who admire the principles of allyship.

Brand reputation is everything, and today’s professionals won't settle for anything less than people-first organizations.

To expedite your search for tech talent, don’t hesitate to get in touch.