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Recruiting Agencies
Notes on Recruiters       

Recruiters are people paid by employers to find appropriate candidates to fill the employer's job openings. No real news there. But, there are different kinds of recruiters.

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Basic Kinds of Recruiters:

  1. Those who are paid by the employer for their recruiting efforts regardless of the outcome.
  2. Those who are paid by the employer for each referred person who is hired.
Retained Recruiter
The first kind of recruiter is called a "retained" recruiter because they are paid a "retainer" for their recruiting efforts, independent of whether or not open positions are filled. Presumably, if no positions were ever filled, the retained recruiter would eventually be replaced by someone more effective. Retained recruiters include those who are actually employed in-house by the employer as well as those whose work is based on a contract with the employer.

Contingency Recruiter
The second kind of recruiter is called a "contingency" recruiter because their income is "contingent" on whether or not a person referred by them is hired. In other words, they are paid a commission for every job opening which they fill. Anyone who is referred to an employer by a contingency recruiter comes with an extra cost associated with hiring them - the cost is the contingency recruiter's commission, which can add as much as 20% to 30% of the starting annualized salary. This may affect hiring decisions or the starting salary if an employer is particularly price sensitive.

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