Definitions Common to Executive Search Firms and Employment Agencies

Recruiting, Staffing, Headhunter – all of these terms refer to recruiting agencies and are generic in nature. Though, the term “headhunter” typically refers to a third-party recruiting solution.

Temp Agency – a temp agency is a recruiting firm that, as it sounds places temporary employees instead of full-time job seekers. Temp agencies, as a rule are paid differently than regular contingency or retained search firms.

The majority of the time, temp agencies are given a cut of every hour that the person whom the recruiting agency staffs until that person is either let go or is offered full-time employment in which case the temp agency is given additional commissions.  Temp agencies, for the recruiting business are a good indicator of the job market as temps are the first to be hired.  

Exclusive recruiting contracts–recruiting firms either work on what is referred to as an exclusive or as a general or better known as contingency contract. An exclusive contract, in the recruiting world is exactly as it sounds whereas that particular placement agency has probably already been paid and is the only search firm working on that staffing project.

Retained search firms–similar to the definition above, retained search companies work one-on-one with employers, and typically, though not always have an exclusive contract.

Contingency recruitment agency–contingency recruitment firms work on a percentage of the compensation package of the employee whom they staff. This percentage is usually 15 to 25% of the individual’s salary and sometimes this fee can include a percentage of the person who was recruited benefits package.

When it comes to contingency recruiting contracts, multiple recruiting firms are typically working on the same placement and it is a “first-come first-serve” commission structure.

Executive search firms–this one is a little tricky as most recruitment companies call themselves executive search firms, however companies that heavily market themselves as executive search firms will typically only deal with jobs paying over $100,000….sometimes more.

Third party recruiter–a third party recruiter is exactly as it sounds. It is a separate company designed to help hiring organisations find employees.  Though, they are a separate entity a.k.a. are an outsourced solution as opposed to in-house human resource personnel.

In-house recruitment–all this means is that the company is not outsourcing the recruiting solutions and has decided to do the hiring in-house.

Third-party recruiters are sometimes more aggressive upon recruiting than in-house staffing professionals as in-house human resource and recruitment personnel typically do not receive commission.