Employment agencies, also known as staffing agencies or recruiters, generate revenue by connecting job seekers with employers. They act as intermediaries, facilitating the hiring process and receiving payment for successful placements. This payment typically comes in the form of a fee, either a flat rate or a percentage of the placed candidate’s starting salary, paid by the hiring company. For example, an agency might charge 20% of a new hire’s annual salary.
This service provides significant value to both businesses and individuals. Companies benefit from reduced recruitment costs and access to a wider pool of talent. Job seekers gain access to opportunities they might not otherwise find and receive guidance throughout the hiring process. Historically, employment agencies played a vital role in connecting workers with burgeoning industries during periods of economic growth and continue to adapt to the ever-evolving labor market.