Job hunters sometimes use the services of a commercial employment agency. There are an estimated 20,000 such firms in the United States, and distinguishing the type and quality of services they offer is no simple task. First of all, many labels are used interchangeably: executive search firms, personnel consultants, headhunters, outplacement firms, employment agencies-to name a few. The industry is further complicated by its questionable reputation and lack of regulation.

The following descriptions of the four basic types of third-party recruiting may offer some understanding:

Outplacement Organizations: These accept money from individuals (private outplacement), or from corporations sponsoring individuals (corporate outplacement), to conduct job campaigns for displaced employees. The fee is paid up front (retained fees) and the firm markets the individual (candidate marketing).

Employment Agencies: Working primarily with candidates who seek their services, these organizations market the candidates to employers who can potentially use their skills. Fees are earned either from the candidate (applicant paid fees) or the employer (employer paid fees), but only after the candidate is successfully placed in a position (contingent fees).

Contingent Search Firms: Instead of depending on walk-in or mail-in candidates, they custom locate (recruit) candidates, and are paid by the employer upon successful assignment completion (contingent fees).

Retained Search Firms: Like contingent search firms, retained search firms recruit candidates for their corporate clients, but are either paid up front or on a progress basis (retained basis).

If you decide to become involved with a commercial third-party firm, make sure you are familiar with its identifiable traits, then follow these guidelines

  • Exercise caution with employment advertisements directing you to call "900" telephone numbers. The Federal Trade Commission warns that you will be billed either a flat fee or a per-minute charge for each call. Most reputable firms will state the cost of these calls up front.
  • Study online postings and classified listings. Familiarize yourself with agencies that run the same ads week after week. This is usually an attempt to stockpile resumes for potential clients.
  • Be wary of glamour jobs. Offers of high salaries plus the bonus of meeting stars, politicians, etc. are lures to get the unwary in the agency's door.
  • Request specific job information. A reputable agency should tell you by telephone the location of the job, the skills required, experience needed, the size of the firm, and the salary. If the agency refuses, hang up. (For its own protection, the agency will not give you the name of the employer.)
  • Demand only fee-paid jobs. Otherwise, be prepared to spend from 5 to 20 percent of your annual salary for perhaps three hours' work that the agency spent locating your job.
  • Do not sign contracts without precaution. If you do, and you find the job you accept is a mistake, you are still bound to pay the agency its full fee. Ask agencies if you can have a copy of the contract to take to a legal counselor or local consumer protection agency for professional guidance before you sign.
  • Verify that the job you originally sought exists. If the agency refuses, either leave or file a complaint with your area's consumer protection agency.
  • Know about the job before the interview. In spite of what the agency says, you have a right to a written copy of the job description and qualifications.
  • Avoid the interview treadmill. Some agencies will arrange countless interviews for jobs, even though the applicant is not qualified. The idea is to get the applicant a job, any job, and the placement specialist a commission.
  • Take the job you want. Do not fall for "You'd better take what you can get." Again, that line is strictly to land a placement specialist his/her commission. Keep in mind that regardless of what is promised, these firms cannot guarantee they will find you a suitable job.
  • Complain if you have problems. Unethical business practices will continue until the public begins to apply pressure where it hurts. Report your complaints to your area's consumer protection agency, the Better Business Bureau, an appropriate state licensing board, or your state attorney general.
Back to Top