Are Employment Agencies Worth It? | Every Thing You Need to Know

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Recruiting, which is an integral part of an organization’s workforce, can be daunting, leaving employers wondering if employment agencies are worth it.

Although having a competent in-house recruitment team can be good, employers often seek employment agencies to handle the entire process.

Whatever the case, these agencies play a vital role in scouting, screening, and hiring candidates for their clients.

According to statistics, employment agencies provided jobs and career opportunities for about 16 million employees even before the pandemic.

Hence, the need to know much more about this agency. Journey with us as we unravel all you need to know about employment agencies and answer the question – are employment agencies worth it?

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What is an Employment Agency?

Before deciding if employment agencies are worth it, we must first know what an employment agency is.

An employment agency is a business that assists both companies and job seekers. Simply put, it acts as a link in bringing employers and job seekers in close contact.

An employment agency can be privately owned or controlled by the government. The services they offer primarily focus on the unemployed. It allows job seekers to find better positions with better pay and prospects.

In other words, it allows these candidates to come in contact with employers they can’t access on their own.

On the part of the company or employer, it helps them sift through candidates quickly and without going through the strains of the recruitment process.

In summary, employment agencies are there to serve companies or employers, as well as job seekers.

Employment Agency: How Does it Work?

In the case of employment, there are two parties involved – employers and job seekers. While the employer seeks to fill a vacant position, the job seeker aims to secure a decent job.

Irrespective of the party involved, finding and scouting for candidates to fill in a position most times can be time-consuming, accompanied by a nearly endless pool.

Hence, the need for a firm can take the burden and stress off their shoulders. Bringing an employment agency into the picture helps an organization and job seekers cut to the chase in the employment process.

These employment agencies sift through numerous candidates, settling for those qualified to fill several positions temporarily to full-time.

Employment agencies (public and private) assist businesses in placing qualified workers in various positions. The core responsibility of an employment agency is to provide and promote a network of job-search assistance and tools through different mediums.

Employment agencies have different areas or fields, such as:

Recruiter/personnel placement services: The recruiter searches for and connects employees to open positions, putting potential candidates in line for interviews with the company.
Staffing services/temporary help services: Staffing agencies supply qualified candidates for temporary or contract positions.
Executive search firm/Headhunter: An executive search firm works on a retainer from the hiring company and applies standards to locate candidates for these high-profile jobs and place them in the positions.

In summary, employment agencies are why tons of people get work placements daily.

Advantages of an Employment Agency

Contrary to what some job hunters believe, there are advantages to engaging an employment agency.

The following are the benefits of an employment agency:

Time management

It is a fact that most businesses can’t afford the time to search for potential employees to fill a vacant position personally. This is where employment agencies step in.

They use their resources in searching for these candidates faster than most companies in the most timely manner.

Quality of candidates

This is mainly for employers. Getting to employ or engage a terrible client is the nightmare of any organization.

The good news is that these agencies come up with quality candidates at the end of the day, saving employers from hiring employees that fall below their expectations.

Preparation for the interview

It is a fact that employment agencies prep candidates ahead of an interview. They get them ready for the job position by screening them to identify those that are eligible.

In addition, the candidates they refer to the employers are qualified and possess the necessary skills.

Agents in disguise

To a significant extent, employment agencies act as the job seeker’s agents. Often, successful candidates end up confused about some vital regions, such as negotiating salary and benefits.

But not to worry, employment agencies always come to the rescue, assisting them to ensure that both parties (employer and employee) are satisfied at the end of the day.

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Disadvantages of an Employment Agency

There are also downsides to engaging the services of an employment agency. Having this in mind will expose you to the loopholes you should look out for.

The following are the disadvantages of using an employment agency:

Lack of communication

Most recruiters are ghost candidates who apply for specific positions, leaving them with a cold trail.

This is highly unprofessional and is why some end up with a bad reputation.

Higher cost

Having employment companies carry out the recruiting process on behalf of another organization requires money.

In other words, companies pay for the hiring services employment agencies offer.

Legal implications

Most companies realize at the end of the day that the hiring process has errors, which may attract lawsuits that would have been avoided.

This could mostly happen, especially if you can’t establish you were unaware of any violations by the agency.

Absence of employer branding

It is a fact that the recruitment process is another way of branding. By implication, getting an employment agency to handle recruitment means resigning your company to its brand.

To this effect, you may realize that your brand stands above theirs in the long run.

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How Much Does an Employment Agency Charge?

It is no news that employment agencies receive payments in exchange for the services they offer.

However, the amount an employment agency charges depends on the services they offer to both parties. If it is centered on the employer, it could vary since there are two categories of services theyprovider to employers.

In other words, there is a financial distinction between both parties regarding paying employment agencies.

Before jumping into how much employment agencies charge, let’s look at the types of employment agency fees.

1. Hiring company-paid fees

This is the most common payment type and is mainly preferred by employment agencies.

The employer accepts total responsibility for the charge to the agency under this payment type. Therefore, the employee pays nothing.

This implies that an employee might not be aware that a fee has been associated with their employment because the recruitment agency may include hiring costs when calculating the salary for a position.

In addition, headhunters receive their fee after a candidate is hired. These rates fall between 20 and 30 percent of the new employee’s first-year salary. Simply put, instead of being paid by the employee, this is paid directly by the employing firm to the agency.

On the flip side, another type of employer-paid fee. In this case, the employment agency is the employer, while the hiring company contracts them for the services of the employee they need, with a monthly fee for the employees.

In summary, the employee that the employment agency continues to work for the agency and not the hiring company.

2. Employee-paid fees

In this category, the employee bears the financial burden of the contract. In other words, applicants pay employment agency fees to find employers.

This arrangement plays out with the employment agency receiving a particular portion of the employee’s salary.

In other words, an employment agency will serve as a staffing agency and seek a percentage of a worker’s hourly wage for the duration of a contract.

By implication, without the employee’s knowledge, the employment agency may keep the difference or a portion of the difference in place of a one-time charge.

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What are The Types of Recruitment?

There are two types of recruitment services employment agencies provide. These services, to a large extent, determine the duration the applicant or employee will spend in that position.

Temporal/contract basis

As the name implies, employment agencies provide staffing services by helping companies fill vacant position on a short-term basis. For instance, these agencies come on board when a company needs a vacation fill, the duration which will last for a couple of months.

Permanent/long-term basis

In this situation, employment agencies act as a recruiter and a manhunter for permanent positions in a company.

They will create the job description, search for and screen candidates that will eventually land the job, and handle the paperwork for the new employees, such as contracts and taxes.

How Do Employment Agencies Find Candidates?

To those wondering how employment agencies source candidates for possible hire, it’s a no-brainer.

It is a fact that these agencies put a lot of effort into compiling a pool of candidates that they eventually give work placements.

These agencies work with the information provided in the following ways:

Candidate’s database: Employment agencies mainly get this information from the candidate’s CV.
Social media: With social media on the scene, employment agencies find little or no difficulty finding and accessing a candidate’s information.
Jobs boards: This is also a significant way employment agencies can find candidates.
Linked IN: Recently, this has been one of the most effective ways employers and deployment agencies can get in touch with candidates. This platform makes it super easy for those in charge of the recruitment process to spot candidates in specific fields and the companies they have worked for.

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How to Create a Recruitment Agency Contract

When you decide on the position you’re looking forward to filling. Which recruitment agency will best handle the recruitment process? You can use Legislate to develop an agency agreement suited to your unique needs.

To get this right, you need your lawyer to review the contract to ensure that it meets the legal requirements, as well as provide answers to simple questions.

What are the Standard Terms of an Employment Agency Contract

Like most contracts, the standard terms of an employment agency should specify how and when the employment agency will be paid, as well as any other condition.

It should also include whether the agency will be responsible for checking the candidate’s qualifications, mainly if they are a member of a professional body, or whether this is the employer’s duty.

Furthermore, agency agreements should include a specified duration so that the duties and limits will no longer apply after the applicant has been successfully hired.

Are Employment/Staffing Agencies Worth it?

Yes, employment/staffing agencies are worth it. Getting to this point, one thing is sure – employment/staffing agencies are worth it due to the benefits it offers employers and employees alike.

Truth be told, these companies bring value to the table by working with both parties to reach their goals in scouting for and securing decent jobs.

These agencies practically give candidates job placements and don’t stop there. They go a step further in coaching and acting as the job seeker’s agent and the liaison between the company and the candidate.

In other words, employment/staffing agencies help reduce the population in the job market. This practically says yes to the question, are employment agencies worth it?

Hence, the fees shouldn’t be the pedestal on which you should base your judgment on the values they come with.

Conclusion

Here you go – all you need to know about employment agencies. A quick reminder, these agencies exist to make the recruitment and hiring process more accessible and timely for companies or business owners.

With this information at your fingertips, what do you think? Are employment agencies worth it? Go on and be the judge of that.

We hope this article met your expectations. Kindly reach us through the comment section for feedback.

Thanks for reading!

Is it Worth it to Use a Recruitment Agency?

Absolutely! If there is one thing employment agencies are known for, it is the fact that they have a better idea of what the perfect candidate is and how to find them.

Is it Better to Get a Job Through an Agency or Directly?

While you may have the best hands in HR to handle the recruitment process, engaging an agency brings you in contact with more candidates you will ordinarily reach.

Do Recruitment Agencies Help You Find a Job?

Yes. Recruitment agencies can help you source for a job since companies contact them to help source for candidates to fill a particular position.

Why Do Candidates Hate Recruiters?

Poor communication or ghosting is the primary reason why candidates hate recruiters. This is unprofessional and leaves the candidate in the dark.

Is it OK to Work With Multiple Recruiters?

Of course! It is okay to work with multiple recruiters if you desire. It further increases the pool of reputable companies you can work for to a large extent.

FAQs

Is it worth it to use a recruitment agency?

Absolutely! If there is one thing employment agencies are known for, it is the fact that they have a better idea of what the perfect candidate is and how to find them.

Is it better to get a job through an agency or directly?

While you may have the best hands in HR to handle the recruitment process, engaging an agency brings you in contact with more candidates you will ordinarily reach.

Do recruitment agencies help you find a job?

Yes. Recruitment agencies can help you source for a job since companies contact them to help source for candidates to fill a particular position.

Why Do Candidates Hate Recruiters?

Poor communication or ghosting is the primary reason why candidates hate recruiters. This is unprofessional and leaves the candidate in the dark.

Is it OK to work with multiple recruiters?

Of course! It is okay to work with multiple recruiters if you desire. It further increases the pool of reputable companies you can work for to a large extent.

References

money.howstuffworks.com – How Employment Agencies Work
comeet.com – Pros and Cons of Using a Staffing Agency
legislate. tech – Everything you need to know about working with Recruitment agencies