Types of recruitment
Find out more about the different types of recruitment agency, and which recruitment sectors are set to boom in 2020
When people talk about types of recruitment, they generally mean one of two things. They may be referring to different types of recruitment agencies, including temp agencies and retained recruitment agencies. Or they may be talking about recruitment sectors, such as medical or industrial recruitment.
In this guide, we’ll explain the different types of recruitment agency you’re likely to come across, and take a look at the industry sectors likely to experience a recruitment boom in 2020 (and beyond).
We will cover the following sections:
Types of recruitment agency
Whether you’re thinking of setting up your own recruitment agency or just looking for a new role, you’ll need to know about the four main types of recruitment agency: temp, contingency, retained, and niche.
A temp agency – also known as a staffing agency – provides temporary workers (hence the name) for a wide range of companies across a variety of industry sectors.
This description includes a wide range of scenarios – everything from covering someone on maternity leave to helping a sales department cope with a busy period. Some industries may also just hire people to work on a specific project. This is most common for roles that require a high level of technical skill.
If a candidate is employed through a temp agency, then it should be made explicitly clear how long they are going to be employed for, so they know when to start looking for their next job.
The employee will generally be paid an hourly rate and have their wages and benefits paid by the temp agency, which will then reclaim these costs from the employer.
The majority of the UK’s recruitment agencies primarily operate on a contingency basis – in other words, they don’t get paid unless the candidate they put forward gets the job.
In practice, this means recruitment agencies are not only competing with a company’s internal HR team, but also other recruitment agencies. They will therefore do their utmost to support candidates, including offering interview coaching, as well as support regarding salary negotiation.
Their arrangement with the client also generally includes a rebate or replace clause – if the employee leaves within a set period (often the three-month probation period), then the agency must either replace them for free, or refund the fee paid (or in some cases, a percentage of the fee paid).
If the client does hire a candidate put forward by the agency, then they must pay the agency a one-off fee equal to a certain percentage of the role’s annual salary (often 15-20%).
Retained recruitment agency
Often associated with executive search and more senior positions, a retained recruitment agency is one that has been paid a non-refundable fee by the client to source candidates, with further fees paid once a candidate is hired.
Due to the more stringent requirements of the roles they recruit for, agencies operating on a retained basis will generally charge a higher fee per role placed (up to 50% of annual salary, compared to 15-20% for contingency recruiters).
They are also likely to invest more resources into approaching candidates directly (headhunting), rather than relying on responses to job ads.
Niche or specialist recruitment agencies operate in specific sectors of the job market, and therefore have expertise and strong relationships in those areas.
Examples of these sectors include:
- Information Technology (IT)
- Digital marketing
They can operate on a temp, contingency, or retained basis.
Due to their level of industry knowledge, they are often the best source of advice for candidates, and have high standards when it comes to putting people forward for interview.
Many niche agencies will also concentrate on approaching candidates directly
A recruitment sector is just an industry that recruiters operate in. These tend to be broad, with notable examples including industrial, medical, or transport recruitment.
If you are thinking about starting your own recruitment agency, are a jobseeker that wants to enter a growing industry, or a graduate trying to decide on a career path, you’ll need to know which industry sectors are going to be recruiting heavily in 2020 (and beyond).
Here are three recruitment sectors set to boom over the next few years.
The Conservative election manifesto promised £100bn in infrastructure spending over the next five years, including £1bn to create a new fast charging network for electric cars, and £4bn on flood defences.
The government also recently doubled down on the HS2 rail scheme that promises to slash journey times between London and Birmingham, with further rail improvements planned over the next few decades.
These promises come against an uncertain backdrop for engineering recruitment, with Engineering UK suggesting that there is an annual shortfall of up to 59,000 engineering graduates and technicians needed to fill core roles.
The primary driver here is the UK’s aging population – for example, the proportion of those aged over 85 is expected to double by 2043. Moreover, the government has promised a real-terms investment of an extra £20.5bn in the NHS, alongside commitments to recruit 31,000 nurses and 6,000 more GPs.
These numbers may not be enough, though, with a recent report suggesting that the NHS could face a shortfall of 70,000 nurses within the next five years. This is on top of the soaring demand for elderly carers, and suggests that healthcare recruitment is set to be a hugely important area over the next few decades.
Renewable energy recruitment
This is another area where the UK government has made some eye-catching promises – the main one being to make the country fully carbon neutral by 2050.
Meeting this goal will require huge investment in renewable energy, with one energy analyst recently suggesting that the UK would need to build 2,600 new offshore wind turbines over the next 10 years.
Meeting these goals will require a massive increase in renewable energy employment, with the Energy & Utilities Skills Partnership suggesting in 2017 that 221,000 new recruits would be needed across the energy and utilities sector by 2027. The government’s 2050 pledge is only likely to have increased this total.
On a broader scale, it’s clear that tackling the climate crisis will be the defining challenge of at least the next few decades, and that employment in renewable energy will therefore need to become a much bigger part of the UK economy.
- Types of recruitment can either refer to types of recruitment agencies or recruitment sectors
- There are four main types of recruitment agency:
- Temp agency – recruits temporary workers for set periods of time
- Contingency agency – is only paid when a company hires a candidate it put forward
- Retained agency – is paid a non-refundable fee by the company to find candidates, with further fees paid when a candidate is hired
- Niche agency – operates in a specialist area; can operate on a temp, contingency, or retained basis
- A recruitment sector is an industry that recruiters operate in
- Engineering, healthcare, and renewable energy recruitment are all expected to boom in 2020 (and beyond)