Here’s What You Should Know About the Different Types of Recruitment Firms and Which Type Best Fit Your Needs

Mar 1, 2019

Recruitment is a core function in human resource – your employees have the potential to make or break your organization.

Hence, it’s not surprising to know that executives make it their priority to select and retain the best talents. But as the market turns more complex and the competition for available skills increasingly becomes fiercer, the recruitment process can become costly, especially so if you get bad hires.

On average, the cost of hiring can exceed 40,000 dollars per employee, with most of the expenses allotted in the recruitment process itself. The company’s HR departments have to spend time discussing the job opening, job advertising, screening, interviewing and background checking.

In-house HR personnel have to frequently do the same tasks over and over again. But this kind of approach can be inefficient in terms of time and costs, especially with small companies wherein time and the division of labor is already thinly spread out.

To cut on expenses, companies may do away with having in-house recruiters – this means the company has to pull some of its staff to do a recruiter’s job, taking work time away from them.

On the other hand, if you do have in-house recruiters, you have to pay for their salary annually, which means additional expenses for your company. Yes, even when there are no hiring needs.

Partnering with a recruitment firm can be your best course of action to remedy this. Recruitment firms have a team of expert recruiters who can represent your company and they can give you access to their rich database, landing you the best talents in the market.

But to effectively take advantage of a recruitment firms’ capabilities, You first have to familiarizing yourself with the hiring needs of your company, and then working alongside the search firm.

In this article we will be going through the different types of recruitment firms and how each can uniquely address the various hiring needs of companies.

But before all of that, let us first define what a recruitment firm is.


What are recruitment firms?

In a nutshell, recruitment firms act as external hiring department for employers, who are usually medium to large sized businesses. Each of these search firms may operate differently but their main task is to find the “right candidates” for their clients to fill up an available position.

They may have a specialization in certain industries such as healthcare, construction and creative fields. Or they can also be involved in different sectors. Some firms can have independent contractual recruiters, while others have a team of expert recruiters ready to be dispatched at any given time.

The recruitment process generally starts with the recruiters seeking out the potential candidates, sourcing them for the available position, screening each candidate by means of interviews, and then testing their skills before actually referring them to a hiring administrator.

These recruitment activities can be completed in various methods and tools. Search firms are constantly coming up with quick and efficient methods to streamline the recruitment process. These can include using online job boards, social media, application tracking system and phone calls or video calls.

However, even if the search firm has all the cutting-edge recruitment tools, do take note that they can only produce good results if the company has relayed accurate descriptions in the job specifications.

If you’re looking to engage a recruitment firm, remember that no one knows the ins and outs of your company better than you do.

Questions such as “how often do you hire new employees?” or “what job skills are you looking for in your next hire?” can best be answered by you. Being able to communicate with the search firm by giving them a comprehensive briefing about what you are looking for can be a good foundation in getting a successful hire.


Hiring Needs of Companies in Terms of Frequency

Having a clear understanding of your company’s hiring needs in terms of the frequency of hiring can help you utilize the use of the search firms’ capabilities, thereby boosting your chances of getting a successful hire.

Here are 4 divisions of how often companies need to find new hires.

  • Infrequently— hiring new employees only happens once or twice a year
  • Regularly— hiring is usually done about once a month
  • Frequently—your company is actively seeking candidates at any given time
  • Nonstop— for companies who are mass hiring, upsizing and experiencing high turnover

Before proceeding to the different types of recruitment firms, and how the different hiring frequencies can impact your choice of recruitment firms, it’s important that we differentiate recruitment firms from employment agencies. These two terms are sometimes used interchangeably but they are, in a strict sense, different in nature.


Difference Between Recruitment Firms and Employment Agencies

Although both recruitment firms and employment agencies are involved in the recruitment industry, these two terms have different clients they cater to.

Recruitment firms have businesses for clients while employment agencies represent the jobseekers. It’s a matter of where candidates actually end up working for.

Employment agencies are typically government-funded, they are paid to help people who are under employment benefits to find jobs and any job for that matter. They work side by side with the jobseekers, and when they do find a job for their client, the agency directly pays the jobseekers their salary, taking a percentage out of their income.

A recruitment firm on the other hand acts as an intermediary between a company that’s looking to hire someone and a jobseeker looking for employment – they match candidates to job vacancies, working directly with companies to help fill the role.

To put it in clear context, the main difference between a recruitment firm and employment agency is that when a jobseeker finds a job via a recruitment firm, the jobseeker becomes the employee of that company whereas when a jobseeker lands a job via employment agency, the jobseeker becomes the employee of the employment agency.


Different Types of Recruitment Firms

There are all sorts of recruitment firms out there. Having a good foundation on each type can aid you in choosing which one is going to best fit your business.

Again, the key here is knowing your company well and identifying the hiring issues you want to addressed. Pairing your company familiarization with your know-hows about the different types of recruitment firms can guide you to the right recruitment firm.


Retained Executive Search Firms

Nature of Collaboration

Retained or executive search firms, such as Curran Daly + Associates, seek to develop a more hands on relationship with the company and also make use of a thorough processes to land the right candidate.

The recruitment services they can offer are often consultative, research-based and solution oriented. They are hired for a set period of time to conduct a search and paid an upfront free, but the goal is to create a long-term relationship built on trust.

Curran Daly + Associates work on a limited number of assignments before moving on to the next one, making it an ideal recruitment partner for job positions that need to be filled infrequently. They specialize in conducting upper-level management and executive positions that require professional and personality-wise higher qualifications advanced search.


This search firm connects with the client deeply by getting to know the client’s organization, mission, and job position responsibility to gather all the necessary background information before the actual search even begins. They make sure that the company’s values, branding, and culture are properly represented by the candidate.

They can do this by employing competency-based interviewing, 360 degree referencing and applying advanced psychometric assessment to get a better profile not only of the candidate but also of the company, hence getting a more refined pool of potential candidates as compared to the other recruitment agencies.

Specific Hiring Needs That Can be Addressed by Retained Search Firm

According to Cornerstone International Group, when the salary of the job position available is above 100,000 dollars, it becomes critical to hire the most qualified person available, which makes retained or executive search firms good partners for their superiority among other agencies in identifying the most qualified candidates.

Another situation is when the recruitment process requires high level of confidentiality. Retained or executive search firms are bound by data privacy laws since all parties involved have to give their consent to the transfer and receipt of information.

If the candidates are currently employed, recruiters from retained or executive firms are the most adept at persuading them to transfer to the client’s company. Recruiters from retained search firms are experienced professionals and often in possession of successful careers. They may sometimes be contemporaries of the highly skilled executive candidates who need to be poached.

The next type of search firm is similar to retained or executive search firm, but is more involved in the front-end recruitment process, leaving behind the assessment process and selection to the client.

Contingency Search Firms

Nature of Collaboration

Recruiting process involved in contingency search firms are transactional and placement oriented. It has been tagged as “No win, no fee” because unlike retained search firms, contingency firms are basically working for free until they find a proper candidate, hence, the firm can not invest that much time and effort beyond basic recruiting and resume submission.

They often simultaneously take a multitude of open job orders, but still keeps speed as a success factor. Their recruiters and consultants are less experienced as compared to retained recruiters.

They are also under no legal obligation to produce results, no pressure to maintain confidentiality due to the paid-on placements only agreement, and candidates can be presented to multiple organizations without their knowledge.


Contingency recruiters make use of combined strategies of advertising, networks, and online databases to be able to single out the qualified candidates who passes the client’s standards. Resumes are gathered and passed on to the client who takes charge of the recruitment process and from there on, evaluation and review of candidates become the responsibilities of the clients.

Since this model is a placement contract, the more candidates that get hired by the client, the higher the revenue for the contingency firm making them more invested in submitting as many successful resumes as they can.

Specific Hiring Needs That Can be Addressed by Contingency Search Firm

Contingency firms are best suited for companies with nonstop hiring frequency needs and only looking for mid-level positions under 100,000 dollars salary level, positions with multiple vacancies in need of mass hiring, or positions wherein many people can easily qualify for.

Cases wherein a company has a functional HR team but needs external help in some areas of the recruitment process such as sourcing and screening of resume can benefit by partnering with contingency firms.

The next type of search firm is more focused as it specializes only in certain industries compared to the previously mentioned firms.


Niche or Specialist Search Firms

Nature of Collaboration

Niche or specialist firms are responsible for finding highly skilled candidates who are specializing in certain field or discipline, such as information technology, telecommunications, or industrial designs. They have in-depth knowledge of the industry and make it their business to keep a database of the best talents, whether they are actively seeking for employment or not.

They initiate a proactive approach when to finding candidates like that of retained recruitment firms wherein they seek a long-term relationship established on trust. Since they stick only to their chosen industries, having a repeat business is going to benefit the niche firms giving them greater industry knowledge.


Niche recruiters usually have background in their focused sectors wherein they can gain the extra knowledge needed as a specialist. They are in possession of rich databases and are always working in growing their pool of talents to widen their network.

They are active not only in their recruitment sector but also in its community as a whole, by constantly keeping in touch with their contemporaries, attending conferences, and doing volunteer works to promote their career.

Specific Hiring Needs That Can be Addressed by Niche or Specialist Search Firm

Whatever the frequency of your hiring need is, collaborating with niche specialist firms can be of great help for your recruitment solutions.  

For the most part, niche recruitment firms work best for businesses who have available job positions that requires specialist skills that are unusual and hard to find. Niche search firms can find the companies who have employed staffs with these specialist skills and can persuade them to move.


Final Thoughts

The hiring process can be costly, but getting the right hires can greatly help your company and your bottomline. Getting the help of a recruitment firm to aid you with the recruitment process can be your best shot at making the most out of your hiring investments.

There are many recruitment firms in the market. Before engaging on one, it’s best to be aware of the different typologies to make sure that your expected recruitment solutions can be and will be met.

Retained search firms, since they are under upfront payment method, can spend their time getting the right processes and methodology, meticulously sorting and sourcing resumes, and screening candidates. Meanwhile, a contingency search firm is more focused on producing more candidates to raise their chances of making a placement.

Niche search firms on the other hand, are a more specialized search firms, concentrating on specific industries by building their specialist database and being active in the community they are recruiting for.

Every business has its unique hiring needs. As the executive of the company, understanding these hiring needs can help you make a better decision which recruitment firm to partner with.

Now that you know about the different types of recruitment firms, which one best fit your company’s hiring needs? Share your thoughts and leave a comment down below.


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Recruiterbox Blog. (2018). Why Use a Recruitment Agency? Everything You Need to Know When Using These Companies. [online] Available at: [Accessed 31 Aug. 2018].

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Cornerstone, A., Group, A., Story, O., Edge, T., Team, L., Cornerstone, J., Search, E., Search, R., Search, F., Office, Consultant, Dev, C., Development, L., Services, E., Services, B., Coach, Blog, N. and Interest, A. (2014). When Should You Use Retained Executive Search Services?. [online] Cornerstone International Group. Available at: [Accessed 1 Sep. 2018].

By: Curran Daly + Associates


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