Written by:
Valerie A. Gonyea, CPA
Recruiting Manager
Robert Half International, Inc.
In order to set the stage, let's start with this: if a company spends its own time and resources to find a candidate in order to fill a position in the company then there are two parties in the transaction, right? So, when a company cannot find - or doesn't want to spend the time or resources to find - their own candidate they seek out a "third party" which is either an individual recruiter or a recruiting firm. When the assistance of a recruiter/recruiting firm is sought, the company has two (typical) types of options:
Contingency - This is an arrangement whereby fees are agreed upon up front (typically based on a percentage of the first year compensation) but you only pay the recruiter or recruiting firm IF they find a candidate that you choose to hire. It is not unusual for multiple firms to be "hired" in this manner, since the company only has to pay the one recruiter that finds the chosen candidate.
Retained - This arrangement also typically sets the fee up front, usually based upon the first year compensation...BUT you pay the recruiter or firm for their work regardless of whether they actually find you the right candidate or not. The usual arrangements involve three installment payments along the way. This type of recruiting is often known as "Executive Search", as they tend to be focused on executive (VP to "C" level) positions. The idea is that they would do an exhaustive search (even nationwide or worldwide if needed) and conduct heavy pre-screening to find a "slate" of appropriate candidates for the position. In essence you are paying them for their time to conduct the search on your behalf, which is why you pay them regardless of results.
In-House - These are recruiters that are employees for a specific company, like an Apple or Oracle or the like (sorry for my Bay Area focus on naming companies!). They are the folks that are responsible to fill positions for that company. They often work with contingency or even retained recruiters to do their job (although they don't always want to). This category, then, is the opposite of the 3rd party recruiter (either contingency or retained). An In-house recruiter is most often an employee of the company, but sometimes a company will outsource this function to a consultant (just to confuse the matter further!).
A "Sourcer" is typically someone who is focused on FINDING candidates as opposed to someone who is responsible for business development. Candidate-side as opposed to client-side.You see this title in some bigger firms where some people are responsible for recruiting candidates, pre-screening them and doing references. They usually have counterparts who are out development business relationships with potential clients.

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