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What Is a Recruitment Agency? The Complete Guide

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recruitment agency

What Is a Recruitment Agency? The Complete Guide

The Complete Guide

What Is a Recruitment Agency? The Complete Guide

A recruitment agency is a business that connects employers with candidates, taking a fee from the employer when a successful hire is made. That is the simple version. The real picture is more nuanced: there are different types of agency, different fee models, different ways the percentage is calculated, and some practices within the industry that employers and candidates both need to know about before they engage with anyone. This guide covers all of it.

recruitment agency
£43bn
UK recruitment industry turnover in 2025
REC, 2025
60%
Of senior roles filled via recruiter or network, not job boards
LinkedIn, 2025
10-25%
Typical recruiter fee as percentage of first-year salary
Market standard
28%
Faster time-to-hire via specialist recruiter vs job boards
REC, 2025

Quick Answer

A recruitment agency is a third-party company that sources, screens, and presents candidates to employers in return for a fee, typically paid only when a hire is made. Agencies act as intermediaries between people looking for work and businesses looking for staff. They range from large generalist firms placing hundreds of different role types to small specialist agencies focused on a single sector or function. The fee is almost always paid by the employer, never the candidate, and is usually expressed as a percentage of the placed candidate’s first-year salary.


Section 01

What Does a Recruitment Agency Actually Do?

A recruitment agency sits between the employer who needs to hire and the candidate who wants a new role. In practical terms, the agency does the following: identifies what the employer needs, finds and approaches candidates who fit that brief (including people who are not actively job searching), screens applications, conducts initial interviews, presents a shortlist, supports the offer and negotiation process, and remains involved through to the candidate’s start date.

The distinction between a good agency and a bad one is what happens between “finds candidates” and “presents a shortlist.” A poor agency sends every CV it can find to create the impression of activity. A good agency genuinely filters, qualifies, and presents only the candidates it would personally stake its reputation on. That distinction is the entire commercial case for using a specialist rather than a generalist.

What a good agency does

Understands the role commercially before sourcing anyone

Approaches passive candidates, people not on job boards

Filters candidates ruthlessly before the shortlist

Prepares candidates properly for interviews

Validates the offer before it is made to avoid rejections

Manages counteroffers and resignation support

What a bad agency does

x

Posts the job ad and waits for inbound applications

x

Sends every CV to look busy and active

x

Exaggerates candidate fit to get interviews booked

x

Goes quiet after the invoice is paid

x

Treats candidates as a CV database rather than people

x

Fails to disclose when a candidate is being sent elsewhere simultaneously


Section 02

How a Recruitment Agency Works, Step by Step

Whether you are an employer using an agency for the first time or a candidate engaging with one, understanding the full process helps you know what to expect, what to push for, and what should raise concern if it does not happen.

1

The brief

The employer contacts the agency, usually by phone or email, and describes the role. A good agency will ask detailed questions: commercial context, reporting structure, team dynamics, salary range, timeline, why the role is open, and what the previous person in the role looked like. A bad one will nod along and start sending CVs within the hour.

2

Search and sourcing

The agency searches its database of registered candidates, posts the role (sometimes with a condensed brief to protect the employer’s identity), and approaches passive candidates directly, people currently in roles who are not actively searching but may be open to the right conversation. This outreach component is the part of the process that job boards cannot replicate and is where specialist agencies with deep sector networks add the most value.

3

Screening and qualification

The agency interviews or conducts detailed telephone screenings of potential candidates. A genuine screening call covers: current role and reasons for considering a move, relevant experience, salary expectations versus the employer’s range, notice period, and any other factors (location, working model, ambitions) that could cause a placement to fail. The purpose is to surface problems before an employer spends time on someone who is never going to accept the role.

4

Shortlist presentation

The agency presents a shortlist, typically three to six candidates, with profiles and covering context for each. The covering context matters: it should explain why each person is right for this specific role, not just what their CV says. If you receive a shortlist with no commentary, you are receiving a CV-forwarding service, not a recruitment service.

5

Interview coordination and feedback

The agency coordinates interview scheduling between the employer and candidates, briefs candidates ahead of each interview, and collects and relays feedback immediately after. Fast, honest feedback from both sides keeps candidates engaged and helps the employer make sharper decisions. An agency that lets feedback sit for four days is adding delay without adding value.

6

Offer, negotiation, and close

When the employer identifies their preferred candidate, the agency validates the intended offer against market expectations before it is made, manages the negotiation between the two parties, and supports the candidate through resignation, including handling counteroffers from their current employer. This final stage is where a lot of placements fall apart if the agency is not actively involved.

7

Start date and rebate period

Once the candidate accepts and starts, the agency invoices the employer. Most agencies offer a rebate period, typically 8 to 12 weeks, during which a proportion of the fee is refunded if the placement does not work out. The agency should also check in with both sides in the first few weeks of employment to ensure the transition is smooth. If the agency disappears the moment the invoice is paid, that tells you what their service actually prioritised.


Section 03

Types of Recruitment Agency in the UK

Not all recruitment agencies work the same way. Understanding the different types helps employers choose the right one for the role and helps candidates understand who they are actually dealing with.

01

Contingency recruitment agencies

The most common model. The agency works on a role and only gets paid if they successfully place a candidate. There is no upfront fee. This aligns the agency’s financial interest with a successful outcome, but it also means agencies may work multiple roles simultaneously without committing full resources to any single one, particularly if the role is difficult or the employer has also briefed other agencies at the same time.

Best for: Mid-level and specialist commercial roles. Most eCommerce recruitment operates on this model. No financial risk for the employer, but requires the employer to be clear and responsive to get the recruiter’s best effort.

02

Retained search

The employer pays part of the fee upfront to retain the agency exclusively on the search. The agency commits full resources to that assignment and is contractually obligated to produce a shortlist within a defined timeframe. Retained search is the standard model for C-suite, director-level, and highly confidential appointments.

Best for: Senior leadership roles where confidentiality matters, where the market is very tight, or where the employer needs guaranteed exclusivity and commitment from the agency. Fees are higher, typically 25 to 35 per cent.

03

Generalist agencies

Large firms, Hays, Reed, Michael Page, Robert Half, that place candidates across dozens of sectors and hundreds of different role types. They have large databases and can move quickly for common role types. The trade-off is depth: a generalist consultant working across finance, marketing, operations, and HR simultaneously cannot have the same market knowledge as a specialist who places only eCommerce managers.

Best for: High-volume, common role types (administrators, accounts, general managers) where sector depth matters less than network breadth and speed.

04

Specialist agencies

Boutique firms focused on a specific sector, function, or level. Examples include agencies that place only legal professionals, only technology salespeople, or, like Elite X Recruit, only eCommerce professionals. Because the consultants work exclusively within their sector, they carry live knowledge of who is available, what the market is paying, and which candidates are high performers versus high CV-polishers. Their networks are warm, not just large.

Best for: Any role where the fit is highly specific, the market is competitive, or a mis-hire would have significant commercial consequences. Fees are consistent with or slightly above generalists, but the quality-to-cost ratio is typically better for specialist roles.

05

Temporary and contract staffing agencies

These agencies place workers into roles that are temporary, fixed-term, or contract-based. The agency employs the worker and invoices the client business at a day rate or hourly rate that includes the worker’s pay plus the agency’s margin. This model is common in logistics, retail, hospitality, healthcare, and some areas of technology and finance.

Best for: Short-term cover, project-based resource, seasonal peaks, or when you need someone to start immediately while a permanent search runs in parallel.


Section 04

Recruitment Agency Fees: How the Percentage Works

The fee is the part of working with a recruitment agency that causes the most confusion, the most resentment, and occasionally the most unpleasant surprises. Here is exactly how it works.

How the percentage is calculated

The standard model is a percentage of the placed candidate’s first-year basic salary, invoiced on the start date. If a candidate accepts a role at £55,000 and the agency fee is 18 per cent, the invoice is £9,900 plus VAT.

Some agencies calculate on total package (including bonus and car allowance) rather than basic salary. This is worth clarifying upfront. A £55,000 basic with a £15,000 on-target bonus is a £70,000 package: the difference between 18 per cent on basic (£9,900) and 18 per cent on package (£12,600) is significant. Know which basis is being used before you agree to any terms.

Salary 12% (a steal) 15-18% (standard) 20-25% (senior/specialist)
£30,000 £3,600 £4,500 to £5,400 £6,000 to £7,500
£45,000 £5,400 £6,750 to £8,100 £9,000 to £11,250
£60,000 £7,200 £9,000 to £10,800 £12,000 to £15,000
£80,000 £9,600 £12,000 to £14,400 £16,000 to £20,000
£120,000 £14,400 £18,000 to £21,600 £24,000 to £30,000

What percentage is fair?

Below 12%
A steal, but a warning sign

Below 12% is rarely sustainable for the agency and often signals a volume-based approach: they will take the brief but deprioritise it the moment something easier comes in. You may save on the headline fee and spend more in time and restarts.

15 to 18%
Standard and fair

The market norm for most UK commercial and specialist roles placed on a contingency basis. Allows the agency to invest properly in the search while remaining commercially viable for most employers.

20 to 25%+
Senior / executive / retained

Justified for director-level appointments, retained search, and niche roles where the candidate pool is very small. At this level the recruiter is doing significantly more work and carrying more commercial risk on the employer’s behalf.

Rebate conditions to watch out for

A rebate is the agency’s commitment to refund part of the fee if the placed candidate leaves early. Standard UK terms are 100 per cent within four weeks, 75 per cent within eight weeks, and 50 per cent within 12 weeks, with nothing after that. Some terms void the rebate if the employer made the candidate redundant or changed the role, and others offer a free replacement search instead of cash. Always read the rebate clause before signing anything.


Section 05

Weasel Tactics: Why Some People Distrust Recruitment Agencies

Recruitment agencies have a reputation problem. Much of it is deserved, not because the industry is full of dishonest people, but because the contingency model creates incentives that, when not managed with integrity, produce behaviour that damages both employers and candidates. Here are the most common complaints, how they manifest, and what to watch for.

🔢

CV spraying, sending your CV to employers without your knowledge

What it is: Some agencies register candidate CVs and then send them to multiple employers speculatively, sometimes without the candidate knowing. If two agencies send the same candidate to the same employer, a dispute over who owns the introduction can arise that legally and commercially falls on the employer to resolve.

How to protect yourself: Candidates: always ask which specific employers your CV is being sent to before giving consent. Employers: ask in writing whether the candidate has been registered with any other agencies working on the same role.

🛍

Ghost jobs, advertising roles that do not exist to build a database

What it is: Some agencies post job adverts for roles that are either not yet confirmed, no longer open, or that never existed at all. The purpose is to attract candidate registrations. The candidate applies, gets a call that “this role has been filled but we have you on our database,” and is then marketed to other employers without their active consent to that use of their details.

How to protect yourself: If an application results in “we’ll keep you on file” with no specifics, ask directly whether the role you applied for is still open. If the answer is unclear, that is your signal.

💰

Salary inflation, talking up what the role pays to attract more candidates

What it is: An agency advertises or describes a role with a higher salary than the employer is actually offering, either because they have not confirmed the salary with the client, because they are quoting a “package” that includes variable elements not guaranteed, or because they are inflating the number to attract more CV submissions.

How to protect yourself: Always ask: is this the confirmed base salary? Is it guaranteed or does it include bonus or commission? If the recruiter cannot give a definitive answer, the salary has not been confirmed.

🔕

Pressure tactics around counteroffers, inflating urgency to force a decision

What it is: When a candidate receives an offer, some recruiters push for an immediate decision and strongly advise against accepting a counteroffer from the current employer, not because that advice is in the candidate’s interest, but because the agency’s fee evaporates if the candidate stays. Counteroffers are sometimes the right decision for the candidate. An advisor who tells you they are always wrong is not giving you advice.

How to protect yourself: Take the time you need to make the right decision. A good recruiter will give you an honest view of the pros and cons of a counteroffer. One who tells you to decide in 24 hours “or the offer will be withdrawn” is managing their commission, not your career.

📢

Disappearing act, full service until the invoice is paid, then nothing

What it is: The recruiter is attentive, communicative, and helpful throughout the search and placement. The candidate starts. The fee is invoiced. The employer never hears from the recruiter again until they have another role. The candidate is not checked in on. Any integration issues in the first few weeks are left to the employer and candidate to work through without support.

What good looks like: A brief follow-up at week two or three from both the employer and the candidate to check the landing has been smooth. This takes 10 minutes and is the difference between a transactional and a relationship-based recruiter.

👁

The “exclusive” bluff, pretending to have a role before it is confirmed

What it is: A recruiter calls a candidate and tells them they have a fantastic role that has not been advertised yet and will go quickly. The urgency is designed to get the candidate committed before they can think about it too carefully. In some cases the role is real. In others, it is a speculative call to gauge interest in a role the recruiter hopes to get briefed on, or to encourage the candidate to register in advance of anything concrete.

How to protect yourself: Ask for the job title, the company (at least the sector and size), the confirmed salary range, and the timeline. A recruiter with a real, live brief can answer all of these. One who cannot is selling you potential, not reality.


Section 06

What Employers Should Expect from a Recruitment Agency

If you are using a recruitment agency for the first time, or switching after a bad experience, here is what good engagement actually looks like, and what you are entitled to ask for.

You are entitled to

A proper briefing call before any search begins

Market feedback on your salary range before they start, not after two weeks of no progress

A shortlist with written commentary on each candidate, not just CVs forwarded

Proactive updates if the search is proving difficult, not silence

Honest pushback if your brief or timeline is unrealistic

Clear terms of business in writing before any candidates are sent

Your responsibilities to the agency

Give a clear, honest brief including salary, timeline, and why the role is open

Respond to CVs and interview requests within 48 hours, the market does not wait

Give specific feedback after interviews, “not quite right” is not useful

Tell the agency immediately if the role changes or the brief evolves

Do not introduce a candidate to additional agencies once you have a live shortlist, it creates confusion and damages trust with all parties

The best agencies respond to the best employers fastest

Agencies prioritise their effort based on the probability of a placement. An employer who is clear, responsive, and has a competitive salary will consistently receive better service from the same agency than an employer who is vague, slow to respond, and negotiating aggressively on the fee. Both get the “yes we can help” in the first call, only one gets the full effort behind it.


Section 07

What Candidates Should Know About Working with a Recruitment Agency

Using a recruitment agency as a candidate is free, the employer pays the fee, always. But understanding how the relationship works helps you get more out of it and avoid the situations where a recruiter’s incentives and your best interests diverge.

1

Be specific about what you want and what you will not consider

Vague registration calls produce vague results. Tell the recruiter your current salary, your minimum acceptable salary for a move, your preferred locations and working model, the sectors or role types you will and will not consider, and your notice period. A recruiter who knows your real constraints can only present roles that are genuinely worth your time, and can move fast when the right one comes in.

2

Control where your CV goes

Your CV is your professional document. You have the right to know exactly which employers it is being sent to before it is sent. Make this a condition of working with any agency: “I am happy for you to send my CV, but I want to approve each employer before you do.” This prevents your CV from appearing at companies you have approached directly, or at businesses where the appearance of being “sent around” would damage your candidacy.

3

Be honest about your current salary and what you actually need

Inflating your current salary to try to get a higher offer almost always backfires. Employers and agencies often verify salary through the offer process. And a recruiter who presents you at a salary level that does not match your current package will lose credibility with both you and their client when the discrepancy surfaces. Give real numbers. A good recruiter will work to improve the offer for you, they cannot do that if they are working with false data.

4

Understand that the recruiter’s client is the employer, not you

The recruiter’s fee comes from the employer. Their commercial loyalty is therefore to the employer, even when they are also advocating for you. This does not mean they are working against you, a good recruiter genuinely looks after both sides, because failed placements damage their reputation with everyone. But it does mean that if there is ever a conflict between what the employer wants and what you want, you cannot assume the recruiter will automatically take your side. Know who you are dealing with.

5

A specialist agency with genuine sector knowledge is worth far more than a generalist

A specialist recruiter in your sector knows which roles are genuinely good, which employers have high turnover problems they are not advertising, which companies pay fairly versus those who squeeze offers, and which hiring managers interview well versus those who make people feel undervalued in the process. This intelligence is invisible on a job ad and invaluable to your career decision-making. For eCommerce professionals, registering with Elite X Recruit means working with people who know your market in real time, not people who googled it before the call.

recruitment agency

Section 08

How to Choose the Right Recruitment Agency

Not all agencies are equal and choosing the wrong one costs you time, money, and in the worst cases the candidate. Here is how to make the right call before committing to anyone.

Questions to ask any agency before briefing them

QHow many placements have you made in this specific role type in the last 12 months?
QCan you name three businesses in our sector that you have placed into in the last year?
QWhat is your typical time from brief to first shortlist for this type of role?
QWill you be personally working this role or will it be passed to a junior consultant?
QWhat are your rebate terms if the candidate leaves in the first 12 weeks?
QIs the salary I am offering competitive for this role in the current market?

Red flags to walk away from

They cannot name any clients or placements in your sector
They ask for an exclusive without offering any commitment in return
They guarantee placements in unrealistic timeframes without knowing the role
They send CVs before terms are agreed in writing
They cannot tell you specifically what they do that a job board cannot
They do not push back on any aspect of your brief, agreement with everything is a warning sign, not a green one

Specialist vs generalist: the practical test

Ask any agency you are considering: “Tell me about the last three people you placed in a role like this, what were their backgrounds, what did they move from, and what are they doing now?” A specialist with genuine market knowledge will answer this in detail and without hesitation. A generalist will give you a vague, high-level answer about “working across the sector.”

That one question tells you more about an agency’s actual capability than any amount of credentials, website copy, or case study slides. You want to work with someone who knows the market from the inside, not someone who has googled it before the call.

● REC Member  ·  eCommerce Only  ·  No Black Holes

Looking for an eCommerce Recruitment Agency That Actually Knows the Sector?

Elite X Recruit is a specialist recruitment agency placing eCommerce professionals exclusively across the UK. No generalist consultants covering 12 sectors at once. No CV spraying. No ghost jobs. We know the market because we work it every day, and we can tell you immediately whether your salary is competitive, who is available in your area, and what a realistic timeline looks like.

Bottom Line: Is a Recruitment Agency Worth Using?

A recruitment agency is worth using when the value of getting the hire right exceeds the cost of the fee, and for most specialist and senior roles, it does. The maths are straightforward: the REC puts the cost of a mis-hire at manager level at three times the annual salary. A specialist recruiter’s fee is 15 to 20 per cent of first-year salary. The risk-adjusted case for using a good agency on roles that matter is not close.

The agencies that have damaged the industry’s reputation are largely those operating as high-volume CV-forwarding services, masquerading as search firms. The way to avoid them is to ask specific questions about sector knowledge, recent placements, and what they do differently, and to walk away from anyone who cannot answer those questions concretely.

1

For volume and common roles: a well-written job board advert is sufficient and a generalist agency will serve you adequately. Expect 15 to 18 per cent and a 12-week rebate.

2

For specialist or hard-to-fill roles: use a specialist agency with demonstrable placement history in your specific sector. The quality differential versus a generalist is significant enough to justify the same or slightly higher fee.

3

For eCommerce roles across the UK: Elite X Recruit places exclusively in this sector. See also the eCommerce salary guide, hiring on a budget, and how to hire fast for the practical detail behind every stage of the process.


FAQ

Frequently Asked Questions

01What is a recruitment agency?

A recruitment agency is a company that finds, screens, and presents job candidates to employers in return for a fee. The agency acts as an intermediary between businesses that need to hire and people who are looking for work or open to new opportunities. The fee is paid by the employer, never the candidate, and is typically expressed as a percentage of the placed candidate’s first-year basic salary, usually between 15 and 20 per cent.

02How does a recruitment agency make money?

Most agencies operate on a contingency model: they only earn a fee when they successfully place a candidate. The fee is invoiced to the employer on the candidate’s start date and is calculated as a percentage of the placed salary, typically 15 to 20 per cent for mid-level roles, up to 25 per cent or more for senior appointments. Some agencies are retained, meaning the employer pays part of the fee upfront to secure the agency’s exclusive focus on the role.

03Do I pay a recruitment agency as a candidate?

No. In the UK it is illegal for a recruitment agency to charge a candidate a fee for finding them work (with very limited exceptions for entertainment and modelling agencies). The employer pays the fee. A recruitment agency that asks you to pay anything is operating outside the law and you should not engage with them.

04What percentage do recruitment agencies charge?

The UK market standard is 15 to 18 per cent of the placed candidate’s first-year basic salary for most contingency placements. Senior and specialist roles typically attract 20 to 25 per cent. Retained search can reach 30 per cent or more. Below 12 per cent is possible through volume agreements but often signals a lower level of commitment to any individual search. The fee is calculated on basic salary unless the terms of business specify otherwise, so always confirm whether bonus, car allowance, or other elements are included in the calculation before signing.

05What is the difference between a specialist and a generalist recruitment agency?

A generalist agency places candidates across many different sectors and role types. A specialist agency focuses on one sector, function, or level, for example, placing only eCommerce professionals, only finance directors, or only healthcare workers. The practical difference is depth of market knowledge: a specialist knows the candidates, the employers, the salary norms, and the market dynamics in their sector in real time, because it is all they work on. For specialist roles this translates into faster shortlists, better-matched candidates, and more accurate salary guidance.

06What is a rebate and how does it work?

A rebate (or guarantee) is a contractual commitment by the agency to refund a proportion of the fee if the placed candidate leaves within a specified period. Standard UK terms offer 100 per cent within the first four weeks, 75 per cent within eight weeks, and 50 per cent within 12 weeks, with no rebate after that point. Some agencies offer a replacement search instead of a cash refund. Always read the rebate clause before signing terms, as some agencies add conditions (such as no rebate if the candidate was dismissed rather than resigned) that significantly reduce its practical value.

07Can I use more than one recruitment agency at the same time?

Yes, unless you have signed an exclusivity agreement with one agency. Briefing multiple agencies simultaneously on the same role is common, it increases candidate coverage and creates competitive pressure. The trade-off is that agencies working on a multi-agency brief will typically deprioritise it relative to exclusive roles, because there is no guarantee they will earn the fee even if they find the right person first. For hard-to-fill or senior roles, offering exclusivity to a well-chosen specialist often produces better results than splitting the brief.

08What is the difference between contingency and retained recruitment?

In contingency recruitment, the agency works speculatively, they only earn a fee if they successfully place a candidate, with no upfront cost to the employer. In retained search, the employer pays part of the fee upfront (typically one-third on engagement, one-third on shortlist delivery, one-third on placement). The retained model is used for senior leadership roles where the employer wants guaranteed exclusivity and full resource commitment from the agency. Retained fees are higher, but the employer gets a contractual obligation to deliver, not just a best-effort service.

09Is it worth using a recruitment agency for eCommerce roles?

For eCommerce roles at manager level and above, yes, particularly when using a specialist agency rather than a generalist. The eCommerce talent market is relatively small and specialist in its skills requirements. A generalist recruiter who does not work this market daily will not know the difference between a strong and a weak head of eCommerce candidate, cannot advise credibly on salary, and will not have the passive candidate network that produces the best shortlists. Elite X Recruit places exclusively in eCommerce across the UK and can advise on any active role at no cost upfront.

Sources and Further Reading

  1. Recruitment and Employment Confederation (REC): UK Recruitment Industry Analysis, Market Size and Cost of Mis-Hire Data, 2025
  2. REC: Jobs Outlook, Specialist vs Generalist Recruiter Time-to-Hire Comparison, 2025
  3. CIPD: Resourcing and Talent Planning Survey, UK Recruitment Practices and Cost-Per-Hire, 2025
  4. Conduct of Employment Agencies and Employment Businesses Regulations 2003, UK legislation governing agency conduct
  5. Office for National Statistics: UK Labour Market and Employment Data, 2025
  6. Elite X Recruit: UK eCommerce Salary Guide, Live Benchmarks by Role
  7. Elite X Recruit: Hiring on a Budget, 10 Tips for UK Employers
  8. Elite X Recruit: How to Hire Fast, 8 Ways to Cut Time-to-Hire Without Cutting Corners
  9. Elite X Recruit: Best Recruitment Companies in the UK, 2026 Rankings

By the Elite X Recruit team, UK eCommerce recruitment specialists. REC members.

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