In the early days of the Colorado Technical Recruiters Network, we had many discussions about recruiting as a profession. Some of what Kelemen missed were items that we CTRN founding members hashed out over many adult beverages. Here's my take on recruiting as a profession:
There are three aspects to recruiting:
1. First Party or Corporate Recruiting – you hire employees to your own payroll, they work under your managers. Most contract recruiters are working in this role.
2. Second Party or Staff Augmentation – you hire to your own payroll, employees work under client management. Also called labor vendors, labor brokers or contract services. Most temp agencies use this model.
3. Third Party or Headhunting (a.k.a. Executive Search) – clients hire your candidates for their own payroll.
There are four kinds of Headhunting firms:
1. Contingency – paid when the client hires (I did this)
2. Retained Search – Paid a flat rate to find one or two of the best candidates.
3. Hybrid – I've heard these firms called fee plus, "retigency" and combination fee. Creative recruiters and sales reps can work many kinds of deals. One typical arrangement is an up-front retainer, plus a per hire bonus.
4. Source only – a newer model where the client pays a flat fee to receive a limited number of pre-qualified candidates. The client contacts the candidates and moves on from there.
Referring to contingency headhunting firms, The Recruiting Animal says:
If you work for a firm it works a lot like the real estate business. The firm takes half of the fee. The person who brought in the order takes 25% and the person who supplied the candidate takes 25%.My experience is that different firms have different business models. The percentages vary between the house and the staff, and between the person owning the candidate and owning the order. The firm I worked for took more, for "overhead". Obviously, it is better to fill your own orders.
So - thanks to Mr. Keleman for a great start to the conversation. He's given me ideas for a few more monographs.