 | Employer-Paid Agency: 10%-25% of Employee's First-Year Wages |
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 | Headhunter or Recruiter: 10%-30% of Employee's First-Year Wages |
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| An employment agency, also called a recruitment or staffing agency, is a place for job seekers to find permanent work. According to Investopedia, there are two types of employment agencies: employer-paid and applicant- paid. There are also temporary agencies, which are typically employer-paid and offer short-term employment. | | |
| Typical costs: | - An employer-paid employment agency collects a placement fee for each worker that is hired. A typical range is 10%-25% of the employee's first-year wages (gross wages, before taxes). For example, Larchmont Employment Agency in New York specializes in childcare and domestic placement services and charges families a nanny or housekeeper hiring fee of 15% of the employee's first-year wages. The company guarantees a suitable replacement within two months if the hire is unsuccessful. Adamen, Inc. in Poulsbo, WA, offers accounting employment solutions at a rate of 17% of the employee's first-year salary for management and executive positions and 12% for support staff.
- A headhunter or recruiter is a type of employment specialist that aggressively searches for high-level job candidates for 10%-30% of the employee's first-year salary. For example, Hans the Headhunter in Seattle charges employers an initial $1,000 executive search fee and an additional 10% of the employee's annual salary if the business chooses to hire one of their candidates. Rather than companies seeking out employment agencies, headhunters look for the best job candidates in a certain field and shop them to different businesses.
- Employment agency fees generally vary by state, according to the Better Business Bureau. Higher fees are typically associated with higher-level jobs.
What should be included: | - Employment agency services include collecting resumes, interviewing job candidates and performing assessments, in order to narrow down the applicant pool to highly qualified employees. This includes background and reference checks.
- The employer can also leave hiring decisions up to the employment agency. Once the position is filled, the employer pays a one-time fee to the agency. The new, permanent employee is paid through the company's payroll and has no more dealings with the employment agency once hired.
Shopping for an employment agency: | |
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Article updated June 2011 |
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