Recruitment refers to the process of screening, and selecting qualified people for a job at an organization or firm, or for a vacancy in a volunteer-based organization or community group. While generalist managers or administrators can undertake some components of the recruitment process, mid- and large-size organizations and companies often retain professional recruiters or outsource some of the process to recruitment agencies. External recruitment is the process of attracting and selecting employees from outside the organization.

The recruitment industry has four main types of agencies: employment agencies, recruitment websites and job search engines, "headhunters" for executive and professional recruitment, and in-house recruitment. The stages in recruitment include sourcing candidates by advertising or other methods, and screening and selecting potential candidates using tests or interviews
The recruitment industry has four main types of agencies. Their recruiters aim to channel candidates into the hiring organizations application process. As a general rule, the agencies are paid by the companies, not the candidates.

Traditional Agency

Also known as a employment agencies, recruitment agencies have historically had a physical location. A candidate visits a local branch for a short interview and an assessment before being taken onto the agency’s books. Recruitment consultants then work to match their pool of candidates to their clients' open positions. Suitable candidates are short-listed and put forward for an interview with potential employers on a temporary ("temp") or permanent ("perm") basis.

Compensation to agencies take several forms, the most popular:

  • A contingency fee paid by the company when a recommended candidate accepts a job with the client company (typically 20%-30% based and calculated of the candidates first-year base salary), which usually has some form of guarantee (30-90 days standard), should the candidate fail to perform and is terminated within a set period of time (refundable fully or prorated)
  • An advance payment that serves as a retainer, also paid by the company, non-refundable paid in full depending on outcome and success (eg. 30% up front, 30% in 90 days and the remainder once a search is completed). This form of compensation is generally reserved for high level executive search/headhunters
  • Hourly Compensation for temporary workers and projects. A pre-negotiated hourly fee, in which the agency is paid and pays the applicant as a consultant for services as a third party. Many contracts allow a consultant to transition to a full-time status upon completion of a certain number of hours with or without a conversion fee.