Are Employment Agencies Worth It? | Everything You Need To Know

You submit job application after job application. You’ve read all the job-hunting books, carefully tailored your resume and cover letter to each position you’ve applied for, searched all the appropriate websites and maintained all the appropriate social media profiles, and…nothing has worked for you. There is no work. Then you ask yourself, “Are employment agencies worth it?”

Many types of employment agencies assist job seekers in obtaining employment opportunities. So, you can use the services of an employment agency to find your next position in today’s intensely competitive labor market.

Now, it is time to shed more light on the question “Are employment agencies worth it?

What Are Employment Agencies?

Wikipedia defines an employment agency as an organization that matches employers to employees. In developed countries, multiple private businesses act as employment agencies and publicly-funded employment agencies.

An employment agency is a business that connects businesses with job seekers. Multiple private firms and a government-funded employment agency exist in industrialized countries.

Employment agencies find people to fill all kinds of jobs, from temporary to full-time, in several career fields. Whether a company needs a nursemaid, an administrative assistant, a manager, or a carpenter, an employment agency can find a suitable employee.

Now that the question “Are employment agencies worth it?” has been treated let’s look at the different types.

Types of Employment Agencies

1. Public Employment Agencies

In 1650, Henry Robinson developed the idea for a “Office of Addresses and Encounters,” connecting employers and workers. The British Parliament didn’t like the idea, but he tried to start his own business. It didn’t last long. As time went on, the idea to set up public employment agencies as a way to fight unemployment became more common in developed countries.

Social reformer Alsager Hay Hill set up the first labor exchange in the United Kingdom in London in 1871, and it was the first one in the country. This was later bolstered by official exchanges set up by the Labour Bureau (London) Act 1902, which spread across the country thanks to the Labour Exchanges Act 1909, which the Liberal government passed. Jobcentre Plus is the government agency’s name that helps people find jobs now.

The New Deal in the United States set up a government program to help people find jobs. The Wagner-Peyser Act of 1933 was the first piece of legislation. Since 1998, job services have been provided through one-stop centers set up by the Workforce Investment Act of 1998.

When the Commonwealth Employment Service was set up in 1946, it was the first Public Employment Agency that was set up by the government.

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2. Private Employment Agencies

After Robinson, Gabbitas & Thring, the first known private employment agency was set up in 1873 by John Gabbitas. He hired teachers for public schools in England. People in the United States first started a private job agency in 1893. Fred Winslow, who lived in the US at the time, started an Engineering Agency.

As time passed, it became part of General Employment Enterprises, which also owned Businessmen’s Clearing House (est. 1902). Katharine Felton started it in response to the problems caused by the 1906 San Francisco earthquake and fire. Felton started another of the oldest agencies.

3. Traditional Employment Agency

A traditional employment agency helps job seekers find work, as well as businesses when they need to hire new employees. Even though this is becoming rarer and rarer, some companies still charge job seekers for their help. Tell them you will have to pay for their service as soon as possible.

The employer pays for other traditional job boards. Many agencies specialize in a single field, like sales and marketing, accounting, human resources management, sports, or IT job searches. Most of the time, we don’t think using an agency that charges the job seeker is a good idea.

Considering how many agencies employers hire to find the best job candidates, most people will do just as well to send their resumes to these agencies for free.

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4. Contingency Employment Agency

A contingency agency only gets paid if their candidate is hired by their company. You should be sure to find out who pays the fee for the contingency agency before you sign up. Most of the time, these types of firms are used for jobs at the low and middle levels. They send a lot of resumes to the company.

When you apply for a job through a contingency agency, you’ll likely compete with people who found the job through the company’s HR department, job boards, and other recruiters.

4. Search Firms that are hired to look for people

A retained search firm has a one-on-one relationship with the company. Search firms usually do executive and senior-level searches. They are usually hired for a set amount of time to find someone to do a job. These companies specialize in finding and contacting the best candidates they can find for a company.

They often even try to get executives not looking for a new job to leave their current company to see if they can get them to work for them. Retained search firms pay for their expenses and a percentage of the salary of the person they find, even if the person doesn’t get hired. This is called “headhunting.”

Retained agencies will be very careful when they send the candidate’s qualifications to the hiring manager because their agreement with the company is to show only the best candidates for the job.

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5. Temporary or Temp Agency

Temporary agencies are companies that help people find jobs that last for a short amount of time. There are times when businesses hire temps, such as during tax season, when harvest time comes around, or when people are sick or on vacation, to help out. People who work for temp agencies also often help to find jobs for professional consultants to do for a short time.

Many temporary agencies have expanded their roles in the job market to fill “temp to perm” jobs, which start out as temporary but could become permanent if the employer hires the candidate.

You might be put on a “retainer” by a temporary staffing agency like Spherion. This means they keep you on file and send you temp jobs as they come up. The staffing agency is the employee’s official “employer.” They are the ones who pay them.

They might also offer health insurance, child care allowances, or vacation pay. Their new employer pays people who work for a staffing agency when their job turns into a long-term one.

Pros and Cons of Employment Agencies

Are employment agencies worth it? Let’s take a look at the advantages and disadvantages associated with them.

Pros of Employment Agencies

The advantage of employment agencies is that you’re paying for the help of someone who knows what they’re talking about. Often, employment agencies work directly with employers and have a better idea of what they want in a worker. They may also know about jobs you wouldn’t know about alone.

People who work for agencies can also help you be a better candidate for the job. That’s how they get paid. So, they’ll often (but not always) help you out, whether it’s giving you advice on your resume or preparing you for your big interview, but it’s not always the case.

SEE ALSO: What if Candidate Fails Background Check After Job Offer?

Cons of Employment Agencies

The chance for fees or commissions is at the top of the list of disadvantages of employment agencies. If you pay a fee for a job and then don’t like your new job, quitting may cost you money in the long run. Other problems can happen if you don’t communicate well with your company.

Because if they send applications on your behalf without telling you first, they could send their application to the same business, which would be unprofessional. If you show you’re desperate for work, the agency may not work as hard to find the best job for you or get you the best pay.

Employment agencies can have a significant impact on job search for both job seekers and employers.

Here are some ways employment agencies can affect the job search process:

  1. Access to job opportunities: Employment agencies often have job openings not advertised publicly. They may have established relationships with employers who rely on them to fill positions, giving job seekers access to a broader range of job opportunities.
  2. Industry expertise: Many employment agencies specialize in specific industries, such as healthcare, finance, or technology. This provides job seekers valuable insight and advice on job requirements, skill sets, and salary expectations.
  3. Streamlined application process: Employment agencies can help job seekers by streamlining the application process, saving time and effort. Agencies often provide resume and cover letter assistance and may conduct pre-screening interviews to identify the best candidates for a particular job.
  4. Flexibility: Employment agencies can offer temporary or contract positions, ideal for job seekers looking for flexible work arrangements or wanting to gain experience in a new field.
  5. Reduced hiring costs: For employers, employment agencies can reduce the costs and time associated with hiring. Agencies can handle recruitment, screen candidates, and conduct initial interviews, saving the employer time and resources.

What Is The Future Of Employment Agencies?

The future of employment agencies is likely to be shaped by various factors, including technological advancements, changing work patterns, and economic conditions. Here are some possible trends that may impact the future of employment agencies:

  1. Increased use of technology: As technology evolves, employment agencies will increasingly use artificial intelligence, machine learning, and other tools to streamline the hiring process, automate administrative tasks, and match candidates with job opportunities.
  2. Remote work: The COVID-19 pandemic has accelerated the trend toward remote work, and many employers will likely continue offering remote work options. Employment agencies may need to adapt to this trend by expanding their remote recruitment capabilities and offering remote work options for candidates.
  3. Gig economy: The gig economy, which refers to a labor market characterized by short-term contracts or freelance work, is likely to continue growing. Employment agencies may need to adapt their business models to accommodate this trend, for example by offering temporary or project-based work.
  4. Skills-based hiring: Employers increasingly focus on hiring candidates with specific skills, rather than relying solely on educational credentials or work experience. Employment agencies may need to adapt their recruitment and training strategies to meet this demand.
  5. Economic conditions: Economic conditions can have a significant impact on the job market and the demand for employment agencies. A strong economy and low unemployment can reduce the need for employment agencies, while a weak economy and high unemployment can increase demand for their services.

Are Employment Agencies A Good Choice For Your Business? 

Using an employment agency can help accelerate your hiring process, reduce the workload for your current employees, offer flexibility regarding the type of hires and mitigate legal risks. At the same time, its services come with an additional fee that can be as high as 100% of a worker’s annual salary, and they are less likely to be a suitable cultural fit. 

Combining an agency’s efforts with additional internal vetting can be a good idea to ensure the optimal fit. If you decide to use an employment agency, assess your business needs, goals and budget carefully; conduct an extensive reference and reputation check; and clearly communicate your hiring requirements.


You can use employment agencies to help you find a job when looking for a job. However, ensure not to fall into the trap of relying too much on recruiters. Many employers now use job boards like Indeed or Monster to find new employees, while others get staff recommendations from inside the company and use them to find new employees.

FAQs On Employment Agencies

Why do companies use agencies?

Using a recruitment agency benefits businesses by increasing or decreasing their employee levels as needed.

Can an agency help you find a job?

At a staffing agency, companies pay the agency to find employees.

Do I have to pay a fee to an employment agency?

Sometimes—it depends on how they’re structured. The employer pays some employment agencies. The job-seeker pays other agencies. This could involve an upfront fee or (more likely) a percentage of the salary you land in your new job.


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