What Do Recruitment Agencies Do?

by Nick Derham, Director • C-Suite Executive Recruitment Specialist

Added on: 30th May 2013

Recruitment agencies act as intermediaries between job seekers and employers, streamlining the hiring process. They source talent, conduct interviews, match candidates to roles, and manage negotiations to ensure successful placements. So, how do they make money?

Hiring for tech talent or any role can be a slow and stressful process for both employers and job seekers. That’s where recruitment agencies come in.

Recruiters act as the middlemen between candidates and employers, helping both sides save time, reduce stress, and streamline the hiring process.

Key Responsibilities of a Recruitment Agency

Recruitment agencies provide end-to-end hiring support. Their core functions include:

Sourcing job opportunities
Advertising vacancies on job boards
Screening and interviewing candidates
Matching skills and cultural fit to roles
Shortlisting suitable applicants
Coordinating interviews (phone, video, in-person)
Assisting in salary negotiations

Their goal is to create mutually beneficial matches between businesses and candidates that support long-term success.

A recruitment agency is the middleman or woman in this case, between business and job applicant — A recruitment agency acts as the middleman – or woman between employers and candidates.

Candidates and Clients Are Equally Important

While businesses pay the recruitment fees, agencies rely on both clients and candidates. A good agency builds long-lasting, trusting relationships on both sides by:

Focusing on long-term satisfaction, not just immediate placements

Offering a high level of customer service

Sending only qualified candidates

Keeping both parties informed with recruitment software

Who Pays Recruitment Agencies?

It is always the employer who pays the recruitment agency. Charging candidates for job placement services is illegal in the UK.

Fees are typically calculated as a percentage of the candidate’s salary. For example:

Salary: £45,000
Recruitment Fee: 15%
Total Fee Paid by Employer: £6,750

The employer only pays when a successful placement is made.

Jigsaw piece representing where recruitment agencies fit in the hiring process — Ever wondered where a recruitment agency’s role fits in the hiring process? Read on…

Types of Recruitment Services

Type of Recruitment	Description	Payment Model	Candidate Employed By
Contingency	Standard permanent recruitment	Paid only on successful placement	The hiring company
Retained Search	For niche or hard-to-fill roles, includes exclusivity	Upfront retainer and success fee	The hiring company
Temporary (Temp)	Short-term roles (days to months)	Monthly fee plus hourly margin	The recruitment agency
Contract Recruitment	Project-based, self-employed contractors	Percentage of day rate	The contractor

Are All Recruitment Agencies the Same?

No. Agencies vary based on:

Industry expertise (e.g. tech, finance, healthcare)
Recruitment type (permanent, temp, contract)
Client engagement model (contingency or retained)

Some specialise in headhunting, while others focus on volume hiring or temporary staffing. It’s important to choose an agency that aligns with your business needs or your career goals.

Recruitment consultant negotiating salary on a candidate's behalf — Where businesses work with headhunters, they can expect to have to pay a retainer.

Final Thoughts

Recruitment involves much more than just matching CVs to job descriptions. It requires strategy, communication, and relationship-building. Whether you’re hiring or looking for your next opportunity, understanding how recruitment agencies operate can help you navigate the process more effectively.

If you found this guide helpful, share it with someone who’s currently hiring or job hunting.