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Recruiting Agencies vs. Staffing Firms: What Is the Difference?

The hiring process can be challenging and requires a critical eye to source the best talent. While many employers have in-house recruiters to assist, others prefer outsourcing agents from recruiting agencies and staffing firms. As an employer looking for an external recruiting agency, it is crucial that you understand the difference between a staffing agency and a recruitment agency. You want to work with a professional that understands your hiring needs and uses them to find the most suitable candidate for your open position. 

On the other hand, if you are a job seeker and do not want to job hunt, an employment agency will help you quickly find your dream job. So, what then are the differences between staffing, recruiting, and employment agencies? Plus, how does each contribute to recruiting solutions? Below, we help you get clear insights into recruiting agency vs staffing firms so that you can easily make the right choices in acquiring the best talent for your company.

Employment Agency vs Recruitment Agency

These agencies seem similar, but their difference is who they serve. An employment agency mainly focuses on jobseekers, whereas a recruitment agency helps employers find candidates. 

How do Employment Agencies Work

An employment agency works for job seekers, who are their clients, to help them find their dream jobs. They will register you and then look for companies with positions they can refer you to. The best element about using employment agencies to find employment is that they will focus on your skills and expertise and find a position you fit right in. With vast connections and networks, even the inexperienced job seekers trying to advance their careers can now find jobs in various companies.

Differences Between Staffing Agency and Recruitment Agency

Now that you know the difference between an employment agency and a recruiting agency, let’s get into the difference between recruiting vs staffing agencies.

What is a Recruiting Agency?

As mentioned earlier, recruitment agencies, also known as placement agencies, help their clients find long-term or permanent employees. They initiate solid plans and strategies to ensure they get the best talent for their clients. Since some companies do not have an internal recruiter, the recruitment agencies conduct in-depth research about the candidates and assess their qualifications to meet the client’s needs. You will also need a placement agency when looking for specialist employees to diversify your workforce and promote long-term productivity.

Contrastingly, staffing agencies provide temporary employees based on a company’s required skills. For instance, a company may need to fill a position left indefinitely due to sickness, mandatory leave, and transfer. The working time and duties of temporary employees are streamlined because they often sign a contract agreement with the staffing company. Staffing agencies have gained momentum in the business sector due to the rising cases of employee turnover. 

Other differences between recruiting vs staffing agencies are as follows:

1. The Interview Process

Placement/recruiting agencies apply all the recruitment strategies to ensure they source the best talent in the market. They conduct all the essential interviews irrespective of the rounds and present the finalists to the company for final vetting. The company then performs the last interview and selects the best candidate. Simply put, a recruiting agency provides long-term, competent professionals intending to improve a company’s productivity and fit into its culture. 

On the contrary, staffing agencies focus on the skills required by the company. They advertise the skills in question, and candidates who fit the criteria are selected and interviewed. Some of these agencies formulate skill assessment tests and send them to the candidates. Those who pass them get a direct entry to the workforce temporarily without being scheduled for an interview. If their clients don’t like the selected candidates, they send them back for replacement.

2. Recruitment Strategy

Regarding recruitment techniques, placement agencies use a step-by-step procedure in sourcing their candidates. They use different platforms for marketing a company’s brand and conduct thorough scrutiny of the applicants’ qualifications. Candidates who meet the company’s talent requirements are selected. They conduct interviews and finally present the best candidates for long-term employment.

Staffing firms rarely apply sourcing strategies. Instead, they have skilled professionals set aside to do the temporary jobs. They only advertise the skills in situations where they do not have qualified personnel. Therefore, if you are a job seeker applying for a job via a staffing agency, they may require your credentials to analyze if you have the skills needed for various job openings.

3. Employee Selection

Other than hiring long-term employees, recruitment agencies tend to source employees for higher-level positions. Since the process involves in-depth analysis and assessment, it may take a recruiting agent longer to hire the required professionals.

On the other hand, staffing agencies take a short time to hire employees because they are readily available. Their candidates are willing and ready to work on a contract basis and later move to a different organization.

How do Recruitment Agencies Get Paid?

So far, we’ve looked at the differences between recruitment, employment, and staffing agencies. One thing they have in common is that they all source the best talents and jobs for their clients. Simply put, they play the role of recruiters and headhunters; hence payment is mandatory for their services. That being said, let’s look into details of how recruitment agencies get compensated for their roles in the business sector.

Recruitment agencies only receive compensation from employers looking for new talent. So if you are a job seeker, applying through this agent is free. Note that recruitment agencies’ fees vary, and it all depends on what works best for your business. Some recruitment agencies charge a flat fee while others a percentage of a candidate’s first-year salary. 

Most companies pay their recruitment agencies on contingency, meaning they have to source the employees first before they get their payment. If an organization wishes to retain the recruiter, they are paid up-front irrespective of the hiring season. Moreover, companies hire more than one recruiter on contingency terms to put them on their toes. Since they all want to win and get paid, they will dig into their connections and present the best. 


Recruiting agencies and staffing firms have played key roles in business productivity. Companies with no recruitment strategies can still compete favorably in the talent acquisition market with the help of these agencies. Whether searching for a recruitment or staffing firm, you should focus on your company’s needs. For job seekers, an employment agency is your best bet, only that you should be keen on their terms of payment. That being said, weigh your hiring needs and choose the best candidate sourcing agency for a better workforce and productivity in your organization.

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