Employer Insights

How Is a Recruitment Agency Structured in Australia & Abroad?

Mark Smith Posted by Mark
min read

In the first installment of our series comparing job seeking and recruitment across the world, we addressed how resumes are formatted around the world. This week, we discuss how recruitment companies work in the Australian and U.S. markets.

How is a recruitment agency structured? Who does what?

Mark Smith, people2people: Interestingly, recruitment firms in Australia resemble their cousins from the United Kingdom quite considerably, and, consequently, international recruitment staff transfers mainly occur between the UK and Australia. In the white collar middle market in which people2people operates, I would go as far to say that over 50% of recruitment consultants are from the United Kingdom. American based recruitment agencies have been less keen to enter the Australian market and have only really expressed an interest in the last 15 years, seeing it as a foothold into the Asian markets. 

Some have been successful, while others have not, but what is interesting is the noticeable difference, at least initially, in the way the firms are structured. In white collar recruitment (as distinct from blue collar recruitment), Australia's recruitment firms mostly have a very flat organisational structure. Recruitment consultants often report to a team leader and/or branch or office manager and then through to a regional manager. There is always a back office function with administrative staff. The business development is conducted by the consultants themselves, who also deliver the service. This is the key difference. In my experience, the U.S. firms had dedicated business development managers and account managers who were not responsible for delivering the service. In some instances, candidate management and resourcing is also undertaken as a separate function from the recruitment consultant. Over to you Will. Am I correct? How different are the recruitment agencies in the U.S.?

Will Thomson, Bulls Eye Recruiting:  Mark, this was an interesting and great question.  It was one of the main reasons why I wanted to do this series.  There are corporate recruiters who actually work for the company and help deliver talent to the companies they represent, and then there are agency recruiters.  There are larger agencies with branches all around the United States, and then there are smaller firms.  

Larger agencies can have multiple branches within a large city.  Smaller agencies can vary quite a bit on how they are structured. Some of the larger agencies in the United States are Kforce, Alegis Group,  Manpower & Volt.  They typically have a branch manager (also known as a market manager or director of operations), account executives, and recruiters.  These agencies typically recruit for either full-time roles or contract-to-hire roles.  

The branch manager oversees the account executives and recruiters, makes sure people get hired into the roles, and are responsible for budgets and key decisions. The account executives are typically responsible for a territory or vertical within a market.  An example of a vertical would be technology recruiting or accounting recruiting.  The account executives go out and find new business and also cultivate existing business.  Once they get the order for the role, they then hand off the position to a recruiter or team of recruiters.  Each firm is structured differently, but commissions are often split, 50% for the recruiter who finds the candidate and 50% for the account executive who brings in the business. 

The smaller agencies usually have people running a 'full desk', which means that they will typically find the new business and recruit the individuals themselves.  This can be more lucrative, as they get 100% of the deal, as opposed to 50%.  Some smaller agencies are also set up like larger agencies with a larger footprint.  They may recruit in multiple cities and countries.  A larger agency typically sticks to one city.  They may have a team of recruiters and account executives also.  It just depends on the situation. Agency recruiting is extremely competitive in the United States.  Not only are you competing against the corporate recruiters and any of the sourcers that the corporate recruiters have on staff to augment their search, but you are also competing against the other agencies and recruiters within your OWN company. Agency recruiting is 100% about sales and the ability to deliver results fast.  

Most larger companies do whatever they can to not use agencies, so you have to be really good at what you do to be successful.   It is much cheaper to use a corporate recruiter to find a person for a role than use an agency. An agency on average charges 15-20% of the annual salary of the candidate being hired.   It  can add up quickly for a company that is on a budget. Hopefully that helps!