Important Info

Why so many names?

Why are there so many names for recruiters when, regardless of what we call ourselves, we do the same thing in most cases? We find a client, or we are the client (Corporation or Human Resources) and the client has a need for an employee, contractor or maybe a contractor-to-hire. I will explain those differences later.

Once we know what our client wants, we start the search for a suitable candidate for the position. Some companies and recruiters, for that matter, post their opening on one of the job boards like Dice, Career Builder, Monster, Computer Jobs or others out there. Some HR recruiters, corporate recruiters, technical recruiters, contingency recruiters, search firm recruiters, staffing firm recruiters and agency recruiters get connected to LinkedIn, Facebook, Twitter, etc. to find candidates for this opening. Once the recruiter finds a match, regardless of what the title of the recruiter is, they set the candidate up with the client and if everything goes well (and this is the person they have been looking for), Wham! A match and a placement is made. Now the recruiters that work for the company with the opening get a feather in their cap and a possible bonus and, of course, their salary and that’s that.

An independent recruiter that is not part of the client’s staff collects a fee or what I like to call a service charge. Depending on what was negotiated up front, this fee could range from 20% to 35% of the new employee’s annual compensation. So, for a $100K position, we’re talking about $20,000 to $35,000 for this one placement. This could be almost as much, if not more, than the in-house recruiter or corporate recruiter makes in an entire year.

Now, if the recruiter works for any of the different types of recruiting firms like Executive Search firm, Search firm, Agency, Staffing Company or whatever they want to call themselves, then the recruiter only gets a percentage of the fee mentioned above. In most cases this percentage ranges from 10% to 50%, depending on how much salary or draw the recruiter is on.

So, as you can see, an Independent Home Based Recruiter or even an independent recruiter that has his/her own office, has an opportunity to earn much more than the other types of recruiters if they work hard and stay focused.

Types of Placements for both parties

Direct Hire: (Use to be called Permanent) until someone sued the company because they got laid off.

Contract-to-Direct Hire: This is when a company uses the Agency, Search Firm or Staffing firm’s hourly employee to do a job at their company and, if things work out (usually two to three months), the client company then hires this person to work for them full time.

Contract or Temporary and also called Consultants: (They work the same; just different titles). These candidates work for the recruiting firm (we will use this term so we don’t have to name them all) on their payroll and normally get an hourly rate. The recruiting firm pays the contractor or temporary an hourly rate and then adds a dollar amount on top of that pay rate and that is what they will bill the client. This is what most firms call the mark-up or margin. Many firms work on a percentage that they mark up, but it’s my belief that you take dollars to the bank, not percentages. In the end, percentages add up to the dollars with every situation being different but I like to know how many dollars I am making on each Contractor, consultant or temporary I have out on assignment.

SPECIAL NOTE:
Many independent home based recruiters don’t get involved with contract or contract-to-hire because when they add up the numbers, they know they cannot handle these types of placements. When you have 5 people out at $100 an hour or $500 an hour times 40 hours your payroll would be $20,000 a week and some of the clients may take as long as 90 days to pay so you would be out $240,000 before you get your profit. The good news is that there are companies out there that do what we in the industry call “pay-rolling” in which case they handle the funding, billing, collections, etc. What this means is that a home based recruiter can offer all of the three scenarios mentioned above to their clients. I will tell you from first-hand experience that if an independent home based recruiter goes about this phase of the business in the right way, this can be the most lucrative of all the recruiting scenarios.

Types of Recruiters - Contingency, Retained, Contract, In-House

Retained:
This service is usually reserved for management up to executive level positions, or high value individual contributors. Fees are paid 1/3 up front, 1/3 at the end of one month, and 1/3 upon completion.

Contingency:
This service can be used for any level of position, but is most common on staff, manager and some director level positions. Fees are due upon placement. The client and other recruiters may also be working on the search assignment.

Exclusive:
This is similar to contingency, except that the recruiter has exclusive responsibility for filling the position. Fees are due upon placement.

Contract:
Terms can vary, but this could include hourly, part-time, or a combination of retainer and commission, with specified recruiting objectives.

In-House:
Refers to company HR type recruiters who work for a single firm. To some extent, contractors may operate a bit more like In-House recruiters, but for this discussion, we'll assume these are permanent in-house employees.

Corporate recruiters:
Are employed by a company for the purpose of finding and qualifying new employees for the organization. Third party recruiters are subcontracted to by a company for the same purpose. Several different types of third party recruiters exist, but the main difference between them lies in how they are compensated. Both third party recruiters are paid by the hiring company, but retained recruiters typically have an "exclusive" with the company. They are paid a portion of their fee up front with the balance paid when the search is over. Retained recruiters are typically used for executive level positions.

Contingency recruiters:
Don't typically have an exclusive relationship with the company. They are paid a fee only if the company hires a candidate discovered through their efforts. (Most third party recruiters fall into this category.)

Here are some of the names recruiters either give themselves or the titles the company gives them:

• Staffing Specialist
• Corp. Recruiter
• HR. Recruiter
• Executive Recruiter
• Contingency Recruiter
• Talent Acquisition Specialist
• Recruiter/Sourcer
• In-House Recruiter
• Third Party Recruiter
• Full cycle recruiter
• Full Desk Recruiter

Below is a partial list of Specialty Recruiters; these are just a few. There are many more.

• Technical Recruiter
• IT Recruiter
• Health Care Recruiter
• Engineering Recruiter
• Transportation Recruiter
• Hospitality Recruiter
• Telecom Recruiter
• Gaming Recruiter
• Manufacturing
• Oil and Gas Recruiters
• Life Science Recruiters/Bio Tech
• Finance Recruiter
• Food and Agriculture Recruiter
• Construction Recruiter

Not only are there these types of recruiters, but many times a recruiter will specialize in one industry on all types of positions.

I had a fellow recruiting associate that worked the photo industry like Polaroid and within that industry he worked all types of positions from the janitor on up to the CEO. Then there are recruiters who specialize on one type of position within an industry. Example: IT recruiter specializing in placing Network Administrators or Health Care Recruiter specializing in placing Physical Therapists.

So, as you can see, this profession while being very simple, requires some thinking on your part in terms of what direction you want to go once you understand the Art and Science of Recruiting.