Corporate vs Third Party
There are two kinds of recruiters: corporate recruiters and third party recruiters.
Corporate Recruiters are internal. They are on staff inside a company.
Third Party Recruiters are external. They work for client companies on a search by search basis.
Corporate Recruiters get paid a salary. Third Party recruiters are paid by the search.
In the past, Corporate Recruiters were limited to posting ads and processing the people who applied. This differentiated them from Third Party recruiters who are called headhunters because they go out hunting for people.
Now, however, Corporate Recruiters are not always so focused on advertising. They often search for candidates and call them directly, as well.
Contingent vs Retained Recruiters
External recruiters get paid in two different ways. They can work a search on a contingent basis or they can be retained.
When they work on a contingent basis they get paid only if one of their candidates gets hired.
When a recruiter works on a retained basis she gets paid for working the search whether she makes a hire or not.
A retained search is usually divided into three parts: research, submission of candidates and hire.
The recruiter gets paid one third of her fee when the research starts, one third she submits a short list of candidates and one third when the candidate starts work.
A recruiter is willing to work on a contingent basis when she thinks she has a good chance of finding the person required -- because then she's pretty sure that she's going to be paid.
If it looks like it's going to take a long time to find someone and there is even a chance a hire won't be made, a recruiter will want a guarantee that she is not working for nothing so she will ask for a retainer. That's a non-refundable portion of the fee paid in advance of the service to be rendered.
If a recruiter who is working on a contingent basis does end up with a very difficult search she will probably give priority to more do-able searches.
She's working without a guarantee of payment so she has no commitment to work the job. That's why an employer with a hard job to fill might be forced to pay for it on a retained basis.
When a recruiter works on a retained basis it is understood that she is the only recruiter on the job.
If a candidate comes in from another source and gets hired, the recruiter still gets paid because she's being paid for her commitment to work the search not for making the placement.
When we work retained searches and a resume comes in from another source the client simply passes it to us to put in the mix.
It's worth noting here that even when a candidate does not come in through the recruiter she might have been made aware of the search because of the work the recruiter is doing.
For instance, the recruiter speaks to Betty about the search, she tells her friend and the friend applies directly because she thinks it might help her if she bypasses the recruiter.
Sometimes, a contingent recruiter has exclusive on a job for a certain amount of time. For instance, 30 or 60 days.
When a contingent recruiter has an exclusive and someone applies through another channel he usually won't get paid even if his work led to the candidate hearing about the job.
When an employer gives a search to a number of contingent recruiters they have to compete to get to the right people before anyone else does.
That leads some recruiters to send in a profile before they check to see if the candidate is interested. Meanwhile, another recruiter might call the same candidate and get permission to submit his resume only to find that it was already sent in by someone else. He will ask the company to give him credit for the candidate and a conflict ensues. It doesn't happen all the time but it does occur.
Contract and Temp Recruiters
Some recruiters specialize in placing people on a temporary basis. It could be for a week or many months or even years. In this case, the recruiting firm employs the worker and pays her an hourly rate then bills the client company for the hourly rate plus a commission on top of it.
Recruitment Process Outsourcing
An RPO firm takes over part or all of the client company's recruiting function on an ongoing basis.
Some companies specialize in putting together a sizeable workforce very quickly. They can focus on skilled or unskilled labour.