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Becoming Familiarized with the Intricacies of the Staffing Industry

Posted by in Human Resources
There is no Series 7 of recruiting, and yet the industry has the potential to be as lucrative as the field of finance. Even though experts believe that the staffing business dates back to ancient Egypt, it did not get rolling in its modern form until WWII, when a shortage of male workers became a problem for businesses looking to hire throughout the U.S. However, even after the end of the War, the recruiting industry continued its streak of being able to charge significant fees because with the end of WWII came a boom in technology. Thanks to that new technologically driven economy, there proved to be a shortage of male applicants. In the world of executive search, when demand spikes for employees, so does the ability for the staffing vertical and all its incumbents to charge exorbitant fees. However, fees and potential revenue generation aside, ever wonder how your recruiter works, what their day is like and whether you should pursue a career in the field? Here is some insight regarding the above inquiries: How Your Recruiter Works: Recruiters do business either on a contingency or retained basis. Usually, a retained contract is quite preferable for a staffing firm, as the company gets a portion paid upfront (due upon signature of the agreement) and typically obtains an exclusive on the job. That translates into no other executive search firm or headhunter potentially being able to monetize on or duplicate the placement efforts. On the flip side of the coin, some headhunting firms will work on contingency-based agreement. That means the staffing company receives no upfront fee nor do they have exclusivity on the account. In this scenario, the search firm usually charges the client a percentage of the base salary of the successful recruited employee. Depending on the firm, this percentage could be anywhere from 15% to upwards of 30% of the candidates salary or total compensation package that would encompass variables such as insurance, 401k and any form of bonuses. Either way, your headhunter is bound to make a nice commission off of you getting that job. What Is A Recruiter's Day Like? Depending on the firm, this varies significantly. Staffing agencies designate certain necessary tasks to various individuals. If the search firm is smaller, as with any smaller company, the recruiters will wear multiple hats. Remember, recruiters work for their clients, i.e. the hiring companies. Those are the parties cutting the checks. However, many staffing professionals leverage this as a way to treat applicants poorly - a practice that is never justified, yet rampant in the recruiting world. For the most part, a recruiter will get a job req. or a write-up of the client's needs and begin to shift through what they perceive to be pertinent resumes from various sources, including from posting the jobs on websites, possibly niche, industry related job boards. Additionally, recruiters will use contacts, social media sites such as LinkedIn, Twitter and Facebook, as well as perform search queries on the aforementioned job boards that can yield a high amount potentially solid candidates. Every now and again, staffing professionals will make the mistake of calling a person's place of business - a tactic that tends to irritate and turn off even the more desperate candidate. With relevant resumes on hand, the recruiter will hit the phones, calling and pitching the applicants who can potentially get the job and make them the commission that recruiters depend upon entirely. To many headhunters, these calls are a numbers games and the tactic is usually transparent to the applicants, thus turning them off. Whether You Should Pursue A Career In The Field Ironic, but more often than not I would tell you "no." There are so many unethical firms out there. There are firms filled with recruiters who are in the industry for a quick payday that never happens. In any company, the people within the company play a significant part in your success or lack thereof. However, in the small instance that you do find the right organization, staffing can be fun, challenging and lucrative. It is these search firms that you want to align yourself with. With regards to compensation, some staffing professionals receive base salaries plus some form of bonus or incentive, while others will only receive commission, without any weekly paycheck. Of course, depending on where you work, the commission per placement can be incredibly high. Sometimes these figures can get into the $30,000 range, but typically the fees you receive, as a commission-only employee of the recruiting firm, are half of that. Also, upon hitting these accounts, make sure you don't celebrate yet: most recruiting firms give the client a guarantee about amount of time the employee will last at the organization. On occasion, a blunder will result in a monstrous refund that can be financially devastating to the search expert. In the end, it is hard to predict what type of total compensation any particular recruiter will receive. This is something that you would have to feel out for yourself. When it comes to your estimated paycheck, be cognizant of the fact that many placement firms will grossly over-inflate the numbers and first year earning potential.
Melissa Kennedy
Melissa Kennedy
Thanks for stopping by. The staffing and recruiting industry is certainly challenging. I guess it's good to have an idea of the problems recruiter's face before deciding on a career in employee search.
Tracen
Tracen
Great post!
Jeanne
Jeanne
Thanks a lot. Your answer solved my problems.
Christiana
Christiana
Great post!

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