A Guide to Employment Recruitment Agencies for Employers

As the world of work continues to evolve and the labor market becomes increasingly competitive, organizations are facing challenges in finding and engaging qualified talent. To address emerging skills gaps, companies are expanding their recruitment efforts and testing out new solutions, including partnering with employment recruitment agencies to seek out and screen candidates.

If your organization is looking for additional support with your recruitment efforts, learn more about what an employment recruitment agency does and how it works, the different types of agencies available, and when to consider using one.

What is an employment recruitment agency?

An employment recruitment agency is an intermediary between an organization and workers that helps fill open positions with qualified workers, including sourcing and evaluating individuals, presenting top talent to hiring managers, and extending job offers.

Recent research from Gartner found that 36% of HR leaders surveyed say their sourcing strategies are insufficient for finding the skills they need. To improve talent sourcing, many organizations are increasingly embracing alternative staffing solutions, including employment recruitment agencies. In fact, IBISWorld data shows that the number of businesses in the employment and recruiting agencies industry in the U.S. has grown 2.3% per year on average over the past five years.

What do employment recruitment agencies do?

Depending on the type of agency, available service offerings, and agreement between an agency and client, employment recruitment agencies responsibilities can vary. With some contracts, the agency manages the entire recruitment and hiring process. With others, the client may want to be more involved and maintain ownership over certain aspects of the process.

As you consider different agencies, keep in mind that some are engaged only until a worker is hired, while agencies with full-service staffing capabilities stay on as the employer of record. This role may apply for any team member they bring in for the duration of the individual’s time with your company.

Specific employment recruitment agency responsibilities include, but are not limited to:  

• Developing or updating job descriptions in partnership with the client
• Promoting opportunities across talent sourcing channels
• Sharing opportunities with network connections
• Building relationships with skilled talent
• Interviewing individuals
• Administering preemployment testing
• Running background and reference checks
• Extending job offers
• Acting as an intermediary for negotiations
• Administering digital paperwork for new team members
• Facilitating onboarding
• Managing payroll, tax, and benefits on behalf of the client (if applicable)

What are the different types of job agencies?

Several types of employment recruitment agencies are available for your organization to consider based on your specific hiring needs. Understanding the differences between agency types is a key to selecting the right partner.

Employment agencies

An employment agency manages the recruitment and hiring process from start to finish—including sourcing, attracting, and evaluating talent, along with extending job offers—with the goal of matching qualified workers and companies. Companies of varying industries and sizes leverage employment agencies.

While some employment agencies can help with a diverse range of hiring requirements, the primary focus is permanent positions, often placing an emphasis on management and executive roles.

Staffing agencies

Similar to employment agencies, staffing agencies match workers with companies based on an individual’s skills and the organization’s specific role requirements. A key difference between the two is that staffing agencies typically offer service to act as the employer of record for the talent they engage, whereas most employment agencies primarily oversee the process until an individual is hired.

Staffing agencies help support both short- and long-term work opportunities, including temporary, contract, contract-to-hire, and permanent positions. In addition to recruitment and hiring, staffing also includes worker orientation, payroll and benefits, training, retention, and termination.

Temp agencies

A temp agency connects organizations and workers to help fill temporary, short-term, and project-based work. Companies often engage temp agencies for additional support on specific projects, during busy periods, or when team members are on leave. For example, an accounting firm may partner with a temp agency for administrative support at the end of the year or during tax season, while a retailer or delivery service may bring in temp workers during the holiday shopping season.

While temp agencies focus on short-term opportunities, if the project or contract goes well and the business has budget and resources available, the company may consider extending the relationship or offering the worker a permanent position.  

Executive search firms

Executive search firms are specialized recruitment agencies that identify experienced, skilled individuals for executive, leadership, or other specialized positions. Organizations may partner with an executive search firm to expand their leadership team as the company grows or to backfill senior roles when a team member leaves the business.

Finding and engaging talent for senior-level positions requires significant research, time, and resources. Executive search firms can help make the process more efficient while saving time for internal recruiting teams.

Experienced executive search firms have strong relationships with senior-level talent, along with extensive networks from which they can source qualified individuals. Recruiters at executive search firms partner closely with organizations to understand the overall business objectives and specific role requirements and, with this information in mind, target skilled talent who match the agreed-upon candidate profile.

Specialty agency

A specialty or niche agency helps companies engage individuals who are highly skilled in a specific industry or area of expertise. Recruiters at specialty agencies have in-depth knowledge of a particular industry, along with an extensive network of professional contacts with relevant skills. Examples of specialty agency focus areas include marketing, creative, engineering, information technology (IT), and finance.  

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Why do companies use employment agencies?

Organizations partner with employment agencies for a number of reasons, including:

• Supplementing the existing HR and recruitment department when the team has limited bandwidth
• Outsourcing recruitment when the organization doesn’t have a dedicated HR or talent acquisition team
• Improving the recruitment process and the candidate experience by partnering with a dedicated agency expert to oversee the process
• Expanding the talent pool or accessing specialized talent from the agency’s network
• Engaging talent for short-term or project-based work
• Focusing time and resources on the most qualified talent, rather than reviewing all prospective workers

How does using an employment recruitment agency work?

Partnering with an employment recruitment agency requires thoughtful consideration because the agency will be responsible for finding and engaging qualified workers for your team. Understanding how using an agency works and applying best practices to select the right one can help set the partnership up for success.

Below are some of the typical steps involved in partnering with an employment recruitment agency.

1. Find the best recruitment agency for your business

Selecting an experienced recruitment agency can help your organization quickly fill skills gaps and avoid lost productivity due to talent shortages on your team. Search for an agency that can support your specific business goals and can help your team address key recruitment challenges.

Some criteria to take into consideration as you vet agencies include:

• Pricing and payment structure
• Options to customize pricing and contracts
• Focus areas and industry expertise
• Service offerings
• Success rate
• Customer reviews
• Sourcing and recruitment process
• Promised timeline for filling positions
• Guarantees and available options if a new team member isn’t a fit

2. Discuss your hiring needs

As you research different employment recruitment agencies, some may seem like the right fit at first glance. However, before selecting an agency, schedule time to discuss your organization’s hiring goals with recruiters at the agency. This step can help confirm whether the agency has the experience and resources required to meet your needs.

Answer the following questions when you share an overview of your specific hiring needs with prospective recruitment agencies:

• What are the most urgent skills gaps on your team?
• Which roles need to be filled in the near- and long-term?
• Which hard and soft skills are required to succeed on your team?
• Can certain skills gaps be addressed with contract or project-based work?
• Can roles be filled by remote workers from outside your local market?
• What does the overall job market and competition look like for similar roles and skills?

In addition to discussing your hiring needs with prospective agencies directly, also prepare job descriptions to share ahead of time. While some agencies offer services to help companies write or refresh job descriptions, proactively approaching agencies with as much information as possible can make the process of selecting the right one more efficient.

3. Sign an agreement with the employment agency

When initiating a partnership with an employment recruitment agency, review the agreement thoroughly to ensure the payment and contract terms align with your budget, legal requirements, and expectations.

Agency pricing structures can vary, with some being retainer-based and others charging a fixed percentage of the workers’s salary once an individual is selected. Some agencies also offer a guarantee period. With this option, the agency will search for a replacement if the worker isn’t a fit during a set window after they accept an offer.

Before signing an agreement, also ask your organization’s legal team to review to make sure any confidentiality, compliance, intellectual property, and related contract terms are approved from a legal perspective.  

4. Receive qualified talent

Once an agreement is signed, the employment recruitment agency will identify, attract, and screen individuals, saving your internal talent acquisition and recruiting team time and resources. Some steps in the screening process can include one or more interviews, talent assessments, and reference checks.

After the agency’s sourcing and screening steps are complete, the most qualified candidate profiles will be shared with your team for review and consideration.

5. Make a hiring decision

Because a recruiter from an agency isn’t a direct member of your team, a key challenge is that the process can be depersonalized. Based on the hiring needs you discussed, agency recruiters do their best to find the right talent for your open roles or projects. However, asking your internal team to interview top prospective workers can be helpful to ensuring each individual is the right fit.

While individuals have likely completed at least one interview with the agency—if not more—by the time they reach your team, schedule an interview with the hiring manager for the role and also consider a peer interview with a few team members before making a hiring decision. The hiring manager can learn more about the candidate's specific skills and qualifications for the position, while team members can better understand how the individual may communicate and collaborate if they join the team.  

Try an employment recruitment agency alternative

While employment recruitment agencies can help your organization expand your talent pool and streamline the hiring process—especially if you have limited internal recruitment resources—working with an agency also has some drawbacks. Agencies can be costly, your company may compete with the agency’s other clients for top talent, and with limited involvement in the process, you risk bringing on team members who aren’t necessarily the right fit.

To more efficiently and cost-effectively fill skills gaps and meet your talent objectives, consider engaging independent talent from Upwork. Through the Upwork Talent Marketplace™, access highly skilled independent professionals from around the world. You’ll find qualified talent with more than 10,000 skills across marketing, technology, design, administrative support, finance, and many more specialties.

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Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this article. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyze and determine the tools or services that would best fit their specific needs and situation.