Recruitment refers to the process of attracting, screening, and selecting qualified people for a job at an organization or firm. For some components of the recruitment process, mid- and large-size organisations often retain professional recruiters or outsource some of the process to recruitment agencies.
The recruitment industry has five main types of agencies: employment agencies, recruitment websites and job search engines, "headhunters" (for executive and professional recruitment), niche agencies which specialise in a particular area of staffing and in-house recruitment. The stages in recruitment include sourcing candidates by advertising or other methods, and screening and selecting potential candidates using tests or interviews.
The recruitment industry has five main types of agencies. Their recruiters aim to channel candidates into the hiring organisation's application process. As a general rule, the agencies are paid by the companies, not the candidates.
Also known as employment agencies, recruitment agencies have historically had a physical location. A candidate visits a local branch for a short interview and an assessment before being taken onto the agency’s books. Recruitment consultants then work to match their pool of candidates to their clients' open positions. Suitable candidates are short-listed and put forward for an interview with potential employers on a temporary ("temp") or permanent ("perm") basis.
Compensation to agencies take several forms, the most popular are:
- A contingency fee paid by the company when a recommended candidate accepts a job with the client company (typically 20%-30% based and calculated on the candidates first-year base salary – though fees as low as 12.5% can be found online, which usually has some form of guarantee (30–90 days standard), should the candidate fail to perform and is terminated within a set period of time (refundable fully or prorated)
- An advance payment that serves as a retainer, also paid by the company, non-refundable paid in full depending on outcome and success (eg. 30% up front, 30% in 90 days and the remainder once a search is completed). This form of compensation is generally reserved for high level executive search/headhunters
- Hourly Compensation for temporary workers and projects. A pre-negotiated hourly fee, in which the agency is paid and pays the applicant as a consultant for services as a third party. Many contracts allow a consultant to transition to a full-time status upon completion of a certain number of hours with or without a conversion fee.
A "headhunter" is an industry term for a third-party recruiter who seeks out candidates, often when normal recruitment efforts have failed. Headhunters are generally considered more aggressive than in-house recruiters or may have preexisting industry experience and contacts. They may use advanced sales techniques, such as initially posing as clients to gather employee contacts, as well as visiting candidate offices. They may also purchase expensive lists of names and job titles, but more often will generate their own lists. They may prepare a candidate for the interview, help negotiate the salary, and conduct closure to the search. They are frequently members in good standing of industry trade groups and associations.
Headhunters will often attend trade shows and other meetings nationally or even internationally that may be attended by potential candidates and hiring managers. Headhunters are typically small operations that make high margins on candidate placements (sometimes more than 30% of the candidate’s annual compensation). Due to their higher costs, headhunters are usually employed to fill senior management and executive level roles. Headhunters are also used to recruit very specialized individuals; for example, in some fields, such as emerging scientific research areas, there may only be a handful of top-level professionals who are active in the field. In this case, since there are so few qualified candidates, it makes more sense to directly recruit them one-by-one, rather than advertise internationally for candidates. While in-house recruiters tend to attract candidates for specific jobs, headhunters will both attract candidates and actively seek them out as well. To do so, they may network, cultivate relationships with various companies, maintain large databases, purchase company directories or candidate lists, and cold call prospective recruits.
See also What is Headhunting?
Because of their focus, firms that specialise in recruiting and placing candidates with very specific skills can very often produce superior results than other more general gaencies, due to their ability to channel all of their resources into networking for a very specific skill set. This specialisation in staffing allows them to offer more jobs for their specific demographic which in turn attracts more specialized candidates from that specific demographic over time building large proprietary databases. These Niche firms tend to be more focused on building ongoing relationships with their candidates as is very common the same candidates are placed many times throughout their careers.
Larger employers tend to undertake their own in-house recruitment, using their human resources department, front-line hiring managers and recruitment personnel who handle targeted functions and populations. In addition to coordinating with the agencies mentioned above, in-house recruiters may advertise job vacancies on their own websites, coordinate internal employee referrals, work with external associations, trade groups and/or focus on campus graduate recruitment. While job postings are common, networking is by far the most significant approach when reaching out to fill positions. Alternatively a large employer may choose to outsource all or some of their recruitment process (recruitment process outsourcing).
These firms attract candidates to job roles on behalf of their clients (employers) and then help these candidates to apply for and interview with employers for the job role in question. There are two main parts to a recruitment consultant's work, "sourcing" candidates and "screening" candidates.
Sourcing candidates involves 1) advertising, a common part of the recruiting process, often encompassing multiple media, such as the Internet, general newspapers, job ad newspapers, professional publications, window advertisements, job centers, and campus graduate recruitment programs; and 2) recruiting research, which is the proactive identification of relevant talent who may not respond to job postings and other recruitment advertising methods done in #1. This initial research for so-called passive prospects, also called name-generation, results in a list of prospects who can then be contacted to solicit interest, obtain a resume/CV, and be screened (see below).
Screening and selecting candidates usually invovles some form of assessment. Suitability for a job is typically assessed by looking for skills, e.g. communication, typing, and computer skills. Qualifications may be shown through résumés, job applications, interviews, educational or professional experience, the testimony of references, or in-house testing, such as for software knowledge, typing skills, numeracy, and literacy, through psychological tests or employment testing. Other resume screening criteria may include length of service, job titles and length of time at a job. In some countries, employers are legally mandated to provide equal opportunity in hiring. Business management software is used by many recruitment agencies to automate the testing process. Many recruiters and agencies are using an applicant tracking system to perform many of the filtering tasks, along with software tools for psychometric testing.
Internet recruitment and websites
Such sites have two main features: job boards and a résumé/curriculum vitae (CV) database. Job boards allow member companies to post job vacancies. Alternatively, candidates can upload a résumé to be included in searches by member companies. Fees are charged for job postings and access to search resumes. Since the late 1990s, the recruitment website has evolved to encompass end-to-end recruitment. Websites capture candidate details and then pool them in client accessed candidate management interfaces (also online). Key players in this sector provide e-recruitment software and services to organizations of all sizes and within numerous industry sectors, who want to e-enable entirely or partly their recruitment process in order to improve business performance.
The online software provided by those who specialize in online recruitment helps organizations attract, test, recruit, employ and retain quality staff with a minimal amount of administration. Online recruitment websites can be very helpful to find candidates that are very actively looking for work and post their resumes online, but they will not attract the "passive" candidates who might respond favorably to an opportunity that is presented to them through other means. Also, some candidates who are actively looking to change jobs are hesitant to put their resumes on the job boards, for fear that their current companies, co-workers, customers or others might see their resumes.
 Job search engines
The emergence of meta-search engines, allow job-seekers to search across multiple websites. Some of these new search engines index and list the advertisements of traditional job boards. These sites tend to aim for providing a "one-stop shop" for job-seekers. However, there are many other job search engines which index pages solely from employers' websites, choosing to bypass traditional job boards entirely. These vertical search engines allow job-seekers to find new positions that may not be advertised on traditional job boards, and online recruitment websites.