Article: Recruitment Agency or Search Firm?

The language used to reference the various types of recruiting companies often betrays the user’s knowledge of the third-party recruiting profession overall.  I’ve recently heard reference to a  “job recruiter” from someone who needed an executive search firm and many times I’ve heard executive search firms referred to as “agencies” and agencies referred to as “executive search firms”.  There are varieties of recruiting companies and the differences among them are important.  Here’s a primer.

After in-house vs. out-sourced, or third-party, the recruiting profession gets divided in to executive vs. non-executive.  Almost every recruiting company will claim that they’re executive recruiters but in reality, very few are.  

The definition of “executive” comes in to play here as a combination of compensation, responsibilities and levels away from the CEO (the top gal/guy, whatever title they have) and it can get complicated depending on the size of the company. For simplicity sake in this blog, we’ll define an executive solely based on salary. Most executive search firms typically will not recruit for positions that are below $200K base salary (yes, they turn away work).  The “big five” executive search firms are Korn/Ferry, Heidrick & Struggles, Spencer Stuart, Egon Zehnder and Russell Reynolds.  These companies have multiple offices all over the United States and other countries.

One tier down from these firms in are a few others: Stanton Chase, DHR, CT Partners (formerly Christian and Timbers), and Boyden.  These companies have global offices as well, and are more likely to do mid management work as well as executive.  Below those, there are literally thousands of other “boutique” firms that will do a few executive level searches, but the bulk of their work will be mid-level, and sometimes, low level management.  Typically companies that are recruiting primarily at the executive and mid level are called search firms.

The recruiting companies whose work is primarily low level management and non-management recruiting are usually referred to as “agencies.”  Companies that offer a wide variety of services from recruitment process outsourcing (RPO) to temporary-, staff- and mid-level recruiting are also typically referred to as agencies even if one of their divisions also offers executive recruiting. Allegis, Adecco and Randstad would all be classified as agencies.

After executive vs staff recruiting, the profession is divided into retained and contingency.  Many believe that the most significant difference between the two types of companies, is the billing structure. While there are exceptions, for most firms, nothing could be further from the truth. The most important differences between the two are in the areas of candidate sourcing, candidate development, candidate assessment, search process management, and finally, candidate and client management.

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