In-house recruiters are paid on commission

Recruiting: how it works, costs, advantages and disadvantages

The war for talents is forcing companies to act. The days of waiting for the ideal applicant are long gone. If their own competence does not lie in human resources, the companies often choose the path through a personnel agency. This can also be useful from an applicant's point of view and noticeably shorten the often laborious application process. In the following, we will therefore inform you about everything you need to know about recruitment.

What is a recruitment agency?

Until about 1994 it was the sole responsibility of the employment agency to bring together employers and potential candidates for a vacant position. A lot has changed in the labor market since then. That calls the recruitment agency on the scene. Not least because of the low birth rate, the personnel situation is strained, and companies are finding it increasingly difficult to find sufficiently qualified workers. It is not foreseeable that this trend will change - on the contrary, experts estimate that 816,000 positions in the public sector alone will remain unfilled in 2030. This development could hit other sectors, for example the trades, even harder.

In order to remain competitive tomorrow, companies have to recruit enough qualified specialists today. You will more or less become applicants yourself who come into contact with attractive candidates. Active sourcing This form of personnel management is called.

Especially in small and medium-sized companies, human resources can only be rudimentary. You therefore outsource personnel recruitment to external parties and use a recruitment agency. You determined the so-called Profiling the requirement profile of the position to be filled. In a specially managed applicant database, she compares this with the competence profile of potential candidates.

In addition, the recruitment agency also places job advertisements. Suitable channels for this would be print and social media or online job exchanges. In addition, many recruitment agencies are also active in job networks such as Xing or LinkedIn.

If a contract is concluded between the company and the applicant, the recruitment agency receives a commission. Your work is therefore similar to that of a (real estate)Broker.

Personnel placement, personnel consulting, temporary employment, headhunters

When it comes to recruiting, terms such as headhunter or temporary employment are occasionally used. Despite some differences, they are often used interchangeably in common parlance because there is a lot of overlap. In fact, the transitions are fluid. A recruitment agency can also act in temporary employment and also employ headhunters.

The recruitment agency relies on job advertisements and applicants who are not currently employed. As a rule, she works up Basis of success.

If a company wants to fill a higher position for which specific specialist knowledge and / or personnel responsibility is required, the search on the job market can be very difficult. Therefore, for this purpose HR consultant or Headhunters used. They have a reputation for poaching employees from other companies. But that's not always the case. Rather, headhunting is now a common term for direct contact with applicants by a personnel consultant. If particularly high, for example management positions are sought, one also speaks of the so-called Executive Searching.

The pay of the recruiter is also slightly different from that of the recruitment agency. A personnel consultant will charge a fee for the search alone, regardless of whether his or her work leads to success.

The Temporary employment means a temporary employment of employees in a company. The duration of employment can be reduced to a specific project, for example. The employee's employment relationship does not exist between him and the client, but continues to exist with the company that provides him borrows. Temporary staffing can therefore be understood as a kind of "temporary staffing".

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Recruitment: Also useful for applicants

Not only for companies, but also for applicants, a recruitment agency like Randstad is interesting in order to shorten the application process. It is by no means only high positions that are filled. A recruitment agency is usually set up on a broader basis and also offers graduates and young professionals good opportunities to start their careers.

Recruitment agencies are often geared towards specific industries and accordingly include companies among their customers that applicants do not become aware of in their own search. In addition, they know the requirements in their areas exactly and can optimize application documents such as cover letters and résumés for their clients.

However, the consulting service of a recruitment agency can very different fail, which is why both companies and applicants are encouraged to take a close look at the placement. For example, in some cases the intermediaries are limited to companies just a selectionsuitable candidate to submit. Others are during it active throughout the application process, hold job interviews and sometimes even organize assessment centers.

Recruiting: pros and cons

There are a few things you should think about when considering recruiting, because like almost everything in life, it has several advantages as well as disadvantages. However, this applies to both sides: employee and employer.

Benefits for the employee

You save time

As an employee, you transmit your relevant data to the recruitment agency, which you then add to your applicant database. From this point on, almost everything happens by itself. The recruitment agency corresponds with companies on your behalf.

Success-based work in recruitment

A recruitment agency works success-oriented. That means: only if you are mediated can the mediator earn anything from you. The incentive for employment to take place is therefore great.

Networking of recruitment agencies

As a rule, a recruitment agency spans several industries networked. This is also necessary to bring companies and applicants together. Larger recruitment agencies in particular have locations across the country. In this way you can set regional priorities and prefer your desired working environment.

Profiling and Matching

If a recruitment agency is commissioned to recruit employees, the vacant position is first precisely profiled. Only if your own profile matches the requirements (Matching), you will be taken to the candidate pool. The likelihood that the position will harmonize with your interests and skills is therefore very high.

You benefit from inside knowledge

You can benefit from the inside knowledge of a recruitment agency. Since she is mostly geared towards specific industries, she knows exactly the job pool in her areas. This may result in contacts that would have remained hidden from you if you had searched for yourself.

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Disadvantages for the employee

A selection process over which you have no control

As a rule, you can hardly influence whether and how you get into the candidate pool as an applicant. Most companies have very specific ideas about the requirements for applicants. In order not to endanger customer loyalty, the recruitment agency usually withholds them, even if they are very strict. You may be deprived of a job because there are only a few points that do not fit your profile.

The assessment of your skills is carried out by the recruiter and is therefore subjective. In the worst case, you will therefore be wrongly judged with regard to certain properties.

You could play the decoy

You could also fall victim to the performance-based pay of a recruitment agency. That would be the case if the personnel consultant wants to make a certain applicant attractive to a company and for this purpose draws in other - less suitable - applicants to the group of candidates. Most likely, said applicant will stand out against these candidates. If, on the other hand, you are one of the “decoys”, you will most likely be rejected.

Benefits for the employer

Less effort

If a company hires a recruiting agency, it bypasses a time-consuming and costly job search. This can be very useful, especially if HR does not have an independent department, because then there is a lack of both expertise and resources, which the recruitment agency definitely has. But even large companies sometimes make use of a personnel consultant, especially for executive search.

Profiling and Matching

Of course, profiling is also in the employer's interest. In this way, he can draw from a pre-selection of applicants who are exactly suitable for the vacancy. There is no need to sound out numerous applications from unsuitable candidates.

Temporary employment

If a company has only a limited need for certain employees, it can acquire them in the course of temporary employment. As soon as they are no longer needed, for example because the respective project has ended or the order situation has normalized, the transfer can be discontinued. This can be relatively unbureaucratic, as no employment relationship is concluded between the client and the employee.

Disadvantages for employers

Lack of control

Outsourcing recruiting is associated with a loss of control. Employers do not know beforehand which applicants will be proposed to them and accordingly have no influence whatsoever on the selection process. Since no less than the question of which people will help shape their company in the future, many companies want transparency in their recruitment.


Neither the recruiter nor the personnel consultant is a protected job title. Sufficient qualifications and seriousness are therefore not guaranteed. The choice of a personnel agency should therefore also be made carefully on the part of the company.


Regardless of whether it is recruiting or personnel consulting, at the end of the application process there are costs for the consulting service that are incurred on the gross annual salary of the candidate orientate. Sentences of 20-30 percent. If the position is in management, the fee can exceed the 30 percent mark.

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What does the recruitment cost for the employee?

When it comes to costs, the question naturally arises as to whether these can also arise for the employee. There is no general answer to this.

Some recruiters advertise with a free consulting service for the applicant and see this as a criterion of their seriousness. In principle, however, a recruitment agency is not prohibited from demanding a fee from the applicant. This fee is also success-based.

Provides a legal basis for this Section 296, Paragraph 2 of the Third Social Code (SGB III). It says:

"The jobseeker is obliged to pay the remuneration [...] if the employment contract has come about as a result of the placement of the mediator."

The payment may not exceed an amount of 2,000 euros (including VAT) and must be in one written agency contract be managed. Paying a fee to a recruitment agency is particularly difficult for job seekers. If this applies to you, you should check whether you may be entitled to a placement voucher. One of the criteria is, for example, an existing entitlement to unemployment benefit 1 (ALG 1).


Since the recruitment agency can accelerate the application process and possibly open the boundaries to previously unknown companies, it can also be useful for your application. However, if you are considering this option, you should take a closer look when choosing the intermediary you want. It is best to find out in advance about the sectors being looked after, the way of working and any costs that may arise.

Many thanks to © geralt / for the cover picture!

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About the author

Alexander Reschke is a well-known application trainer, founder of and author of the successful application guide "Secret strategies of successful applicants". It is his passion to actively support applicants on their way to a job. He likes to spend his free time traveling through the sunny parts of the world and karting.