Types of Services
There are several types of employment-related firms, offering a range of services. It is important, therefore, o understand the differences among these companies and to choose the type that best fits your needs. They include:
Private Personnel Placement Services: This is the most common type of agency, a commercial enterprise designed to bring the job-seeker and the prospective employer together in the hope of producing a one-to-one match-up.
For this service, the placement firm charges a fee; but only when the job seeker is actually hired. Usually, the employer pays the fee; however, this may vary depending on the skills required for the job.
Temporary Help Services: These services that deal exclusively in temporary help are actually employers themselves, who lend out their employees to businesses with temporary needs. The client company pays a negotiated price per hour for the worker's services and pays that money to the temporary service. The worker, in turn, gets paid from that amount minus the temporary service's percentage for administrative overhead and profit.
Retained Search Firms: These companies provide a management consulting service, arranged between the search firm and the client company. The services include learning about the client company and its personnel needs and then locating qualified executives who are interested in working for the client.
Payment is agreed upon between the search firm and the client company. The executive being offered the job does not make any payment. Unlike personnel placement services, payment is not usually contingent upon the actual hiring of a candidate.
Executive Counseling Services: This firm's aim is not to obtain positions for job seekers, but to prepare them to make career decisions, improve their resumes, boost their interviewing effectiveness and help them to obtain positions which fit their goals. The cost is an agreed-upon fee paid in advance by the job seeker and is not contingent on obtaining a job.
Better Business Bureaus have received a number of complaints about the services provided by executive counseling firms. By their nature, these firms cannot guarantee you will land a job, yet they charge substantial fees. Some clients claim the companies promise a great deal but do very little.
In some cases, the BBB has uncovered high-pressure sales tactics, overpriced aptitude "tests" and letter-writing services, and implied promises of employment that cannot be fulfilled. Other instances have revealed companies that provide a conscientious and valuable service.
When considering an executive counseling service, ask to see materials prepared for previous clients with similar backgrounds, as well as for references from former clients. Most importantly, get in writing a clear explanation of what the firm will and will not do, what the costs will be and what time period the contract covers.
Some states prohibit advance fee counseling services. Find out what the law is in your state.
Job Listing and Advisory Services: These firms sell information on obtaining employment in the United States or abroad. The information sold may include lists of job openings, advice on conducting successful job searches and interviews, or guidance on how to write resumes. Listing/advisory services differ from employment agencies which place applicants in specific jobs and receive a fee from either the job seeker or the employer only after placement.
Some listing and advisory firms have placed misleading ads in newspapers and magazines in the "help wanted" columns. These ads appear to offer jobs when, in fact, the firms are selling information on employment. Advisory companies usually require an advance fee -- although this charge may not be disclosed in advertisements. Usually the fee is charged whether or not you find a job through the company's services.
Public Employment Services: As an alternative to private employment services, all 50 states, as well as territories, run placement and referral services. Usually called the Job Service or Employment Service, this system charges no fee and offers both job-seekers and employers an array of employment services at offices nationwide.
In addition to providing referral to job openings listed on the Employment Services' automated job bank, each state's Employment Service may also provide employment counseling, screening, and referral to appropriate educational and training services. Occupational and labor market information is available at most offices, and trained staff provide assistance on resume preparation, interviewing techniques and skills assessment.
Many states have touch-screen computers and kiosks available in public areas such as malls and state offices where job-seekers can access the job banks. The Employment Services also provide special assistance to veterans, the disabled, senior workers, youths, dislocated workers, and welfare recipients who may require additional services in their search for employment.
The nearest Employment Service office can be found by looking in the telephone directory in the state government section.
What an Employment Agency Does
When consumer problems arise in the employment service field, it is often because the job seekers did not understand what services were offered by the firm, what obligations they were under and what the financial arrangements were to be.
The average worker changes jobs infrequently, but an employment agency counselor handles job searches daily. Employment agencies are involved in two to four million job placements annually. They are more aware of successful job winning techniques than most people are likely to be.
Since a placement service only gets paid when its job seeking client is hired, it provides a wide range of services to see that a match occurs. It will:
An employment agency can be particularly helpful if you are attempting to move to a different location with your next job. Many agencies have personal contacts in other cities and computerized systems to exchange information. They may be able to give you a head start in your job search in the new city.
Only a small fraction of the available jobs ever make it into the classified ad section of the newspaper. Many companies prefer to work with an employment agency instead of placing an ad in the paper. For the employer, the agency screens the applicants and only refers the most qualified job seekers. For the job seeker, the employment agency is a source of jobs not listed elsewhere.
In short, an employment agency can help a job seeker improve his or her marketability, learn about job openings not generally announced and save time.
What an Employment Agency Cannot Do
While employment agencies offer many advantages to the job seeker, there are also some built-in drawbacks. The agency does not earn any money until it places an employee in a company. In addition, the job counselor who works with you is usually paid on commission based on job placements.
If your employment counselor tries to pressure you into taking a job that does not really appeal to you, you may either need a new counselor or a new agency. Also, be concerned about a counselor who is pessimistic about your chances for landing the position you want and tries to talk you into seeking a job not suited to your needs. Nevertheless, listen carefully to the counselor's assessment of your skills and suggestions on how to best market them. You may be overestimating your skills or unrealistically viewing the job market.
Employment agencies tend to be most helpful for people seeking white-collar office jobs or other professional or technical positions. Tradespeople and blue-collar workers may have difficulty getting assistance at most agencies, because their contacts and sources of jobs are outside of those fields.
Choosing the Agency That Is Right For You
To improve your chances for success in your career search, it is important to select the best employment agency and counselor for you. Several years ago, nearly all employment agencies were generalists, meeting all employers' needs and helping all applicants. However, many agencies now, have found success by specializing. They either emphasize an occupational area, such as placing accountants, data processors or secretaries, or they specialize in an industry, such as transportation, hotel management or marketing. Research the agencies in your area or the area in which you want to work.
One way to locate agencies to work with is by watching the advertisements in local newspapers. See which agencies are associated with the jobs that appeal to you. These are the agencies that have an ability to locate positions in your field and they are probably worth talking to. However, many specialized placement firms do little or no newspaper advertising.
Ask friends and business acquaintances for recommendations for an employment agency. It is always reassuring to hear from successful, satisfied customers before you invest your time and money, if you will need to pay a fee.
Another approach is to contact the personnel departments in your career field and ask them which employment agencies they rely upon to fill their needs. Personnel officials must keep current on which agencies are most effective and can be counted on to deliver qualified individuals in that field.
Selecting an Employment Counselor
Just as agencies vary in quality, so do employment counselors. The effectiveness of your experience at an agency will depend in large part on your counselor. When you find out about agencies that friends and associates have used, ask for the names of the counselors they used too.
What special training in personnel placement does an employment counselor have? Training varies considerably in length from several weeks or months to only days. Increasingly, attorneys are hired to place attorneys, data processors to place data processors, etc. Technical knowledge, to an extent, replaces formalized special training. Many firms which have little training of their own may send their counselors to local, state, or national training programs.
The most qualified counselors have passed a comprehensive examination which allows them to be designated as certified personnel consultants (CPC). To be eligible to take the exam, the counselor must have two years of experience in the field. The exam covers such subjects as legal aspects of the industry, general business practices and handling practical situational problems. It is worthwhile to seek out someone who has passed this exam. Ask whether the agency you are considering has any certified personnel consultants and ask to see his or her certification.
Now, with the names of some potential agencies, the next step for a prudent consumer is to contact the local Better Business Bureau. The BBB can tell you how long the company has been in business, its reputation in the community, and how well the agency deals with customer complaints.
You are then ready to visit a few employment agencies. Talk to some employment counselors before choosing the one or ones you want to sign a service agreement with. Find a counselor who is knowledgeable and understands your field of work, your skills and your goals. Look for someone who you can speak frankly to and with whom you can establish a productive rapport. Interview the potential job counselor as carefully as you expect to be interviewed.
Working With Your Employment Counselor
A good employment counselor is an ethical professional whose aim is to assist you in finding a job. You can help that process by giving your counselor complete information from the beginning. Be open about your past experience and qualifications. If you withhold adverse information about your background, it is likely that the truth will come out eventually and be more damaging than if you have been honest to start. Your employment counselor can explain to you how best to describe career liabilities in your resume and on an interview.
With ethical personnel counselors, the information that you discuss confidentially will remain that way. However, as part of the process of locating a potential job opening, your counselor may send your resume to a wide variety of companies. If there are any places that you would not want it sent -- because of the difficulty that might cause in your current job, for example -- tell your counselor.
Cooperate and work with your employment agency. It is to your advantage. After being sent out on an interview, let your counselor know the result immediately. He or she may be able to help you plan your strategy by putting the interview in perspective. The counselor may be able to tell you the company's reaction and offer you advice based on that knowledge.
If the interview that was arranged for you was inappropriate, discuss the problem with your employment counselor. Perhaps the counselor misunderstood your goals. If a mismatch keeps occurring, your counselor may not be the right one for you. If you feel you are being pressured to take a job that is wrong for you, find another agency.
State Laws Governing Employment Agencies
In addition to the important principles of contract law that pertain to any agreement you sign with an agency, there are various state laws that govern the actions of personnel consultants and set conditions for licensing. These laws vary greatly from state to state. In some jurisdictions, there may be no law at all that specifically addresses employment agencies. In those cases, the general commercial code applies and offers some measure of protection to the consumer.
Before you commit yourself to an employment agency contract, find out what laws apply in your state or the state in which you are seeking a job.
The majority of states still require an employment agency to be licensed to operate, although many do not license firms which have limited or no financial liability to the job seeker. In most cases, the agency must meet the standards set by the state Labor Department or a designated state office. Most employment agencies must be bonded and must pass certain requirements of having suitable premises to conduct business.
Some states have laws monitoring the fees that employment agencies charge. In some states, the maximum amount that can be charged is set by law. In other jurisdictions, employment agencies must file their fee structures with the state and they cannot revise them without advising the appropriate state office first.
The scale of fees that a job seeker might be liable to pay will be included in the agency's sales agreement. In many states, the law requires that this fee schedule also be clearly posted in the agency's office or reception room.
Certain laws also specify the way that employment agencies must conduct their business. For example, in several states, any job advertisement must either state that it was placed by an agency or must give the name of the agency. This disclosure requirement gives the consumer added information before he or she pursues that job. In addition, some states require the agency to list a job number of each ad. This requirement is added emphasis that there must be a job if one is advertised.
In addition to the conditions set down in the agency contract, many states regulate refunds to customers. Some state laws specify that refunds must be unconditional and must be returned within a certain time limit. If you have questions on what your state requires or whether the agency you are dealing with conforms to the law, contact your state employment department, local Better Business Bureau, or attorney general's office.
Types Of Employment Fees
Placement fees are the main source of income for private employment agencies. There are numerous methods of fee payment, which include:
The employment agency is concerned with being paid for its services and the majority prefer that the employer pay for most positions. Regardless of the obligation you sign with an agency to pay its fee, you are still entitled to pursue any of the above options with the prospective employer. In some cases, the employment agency may assist you in negotiations to obtain some splitting of the fee with the employer.
Check to see what laws apply to agency fees in your state. You may be able to examine the fee scales of agencies you are considering. Fees vary widely from agency to agency, but do not choose an agency simply because it charges the lowest fees. Each individual job seeker's needs are different. It is better to choose an agency for its services and its understanding of your goals than by its fee.
Fees can range from one-half of your first month's salary to 5, 10 or even 30 percent of the first year's salary. These fees are calculated on your gross salary, not your take-home pay.
If you, the job seeker, are obligated to pay the employment agency the fee, it is usually due on the day you begin work. Some agencies will extend you the privilege of paying by installment over a short period of time. Most agencies will help you arrange financing by borrowing the needed funds from a bank or other financial institution. Some agencies offer this help without additional charge and some add on a fee for this extra service.
Ask in advance about the payment terms of your agency. These should be spelled out in your contract. Some agencies that accept installment payments will also grant a discount for payment in full when you accept a position. Also, check to see if the employment agency fee is tax-deductible.
Although the first type of fee, the employer paid option, is the most common, it also has some conditions attached to it of which you should be aware. If you do not meet your obligations in an employer-paid fee job, it could cost you money.
A "fee paid" job means that the employer will pay the entire fee and the applicant will be charged none, if the applicant fulfills the conditions of the contract. However, if you accept a "fee paid" job but do not report for work, are discharged for cause or leave on your own accord, you may be required to pay the fee or some penalty service charge.
Some agencies handle both employer paid and employee paid fee positions. If you go to an agency because of an employer fee paid position, but the agency or the company offers you another job, find out if there is a fee before you accept it.
The Service Agreement
It is most important that you read the contract thoroughly and carefully before you sign it. An informed customer is the best protection against questionable business practices. As with any other service contract you may encounter -- from appliance maintenance to lawn care -- ask questions about anything that is unclear to you.
Just because a contract is printed does not mean that it cannot be changed. If a condition seems unfair or excessive to you, ask to have it altered. By the same token, if an employment counselor makes oral promises to you that are contrary to or in addition to the statements in the contract, have those oral promises added in writing and signed by the agency owner or manager. Your copy should contain any agreed-on alterations.
If you are already interviewing with a company, this should be noted in the contract so you will have no obligation to the employment agency should the job come through. Ask for and keep a copy of any agreement that you sign.
A well-written service contract will explain what happens and what service charges are due in the case of several commonly occurring situations. Before you sign, be sure you know what would be your financial responsibility if:
You take a position through an agency and then lose the job.
Usually, your responsibility depends on whether the termination was due to any fault on your part. If the employment ends for reasons unrelated to your performance, most employment agency contracts provide for partial reimbursement of fees you have paid. Check your service agreement to see what it says.
On the other hand, if you quit or are fired for cause from a position soon after you take it, most agencies expect their full service charge. Some agencies make allowances for this possibility, though. Refer to your contract and ask the agency about its policy before you resign. Some state laws limit the amount of the fee to be paid in these cases.
You accept a position but change your mind before reporting to work.
In most cases, the full service charge would be due anyway. Remember that the agency is being paid for the service it rendered, not for the job it obtained. In this instance, the service was fully rendered, since the position was located, the applicant accepted and so did the employer. The agency completed its commitment and earned its fee, even though you later changed your mind.
You are referred to a company by an agency. Either you do not see that firm or you see it, but do not get the position. At a later time, however, you do accept a job with that same company.
This is a "gray" area that often leads to disagreements. Most employment agencies argue that since they initiated the contact, they are entitled to a service charge. Often the service agreement will cover this point, making the job seeker liable for a charge if the position is obtained within a time period of six months to a year after the initial referral.
You are registered with two different agencies and they both refer you to the same position, which you accept.
Technically, you may be liable for two fees. Ethically, it is the agency that caused the "hire" to take place which is entitled to the fee. If this problem arises, responsible agencies usually settle the matter between themselves. The job seeker should exercise caution to avoid such an occurrence. Speak up immediately if you are referred to a company that another agency has already introduced you to.
Deceptive Advertising Alert!
Many states have laws requiring employment agencies to keep records of the jobs they advertise in the newspapers. This is to make sure that all such positions are legitimate openings. Among less reputable agencies, two common practices that you should be aware of are the"phony ad" and the "bait-and-switch."
Some employment agencies function by having job seekers come to their offices on a regular basis. The best way to lure them in is to advertise attractive jobs in the newspaper. Unfortunately, some agencies take this technique one step further and advertise non-existent jobs simply to get traffic into the agency.
When an applicant arrives at the agency and inquires about the advertised job, he or she is then told "it was already filled" or "you are overqualified for that job" and is shown other listings instead. This is the unethical practice known as "bait-and-switch."
Since it takes a day or two for an agency to hear about a job opening and get it printed in the newspaper, it is possible that a specific job may be filled by the time you call about it. But a consistent pattern of these responses may mean the employment agency is trying to attract clients deceptively. However, occasionally one advertisement will be a composite of the general requirements for more than one position and there may be several jobs all of which require the qualifications advertised.
Here are some ways to protect yourself against employment agencies that use deceptive advertising techniques:
Code of Ethics
The personnel placement industry has adopted its own code of ethics. All members of the National Association of Personnel Services, a trade group representing many placement services, subscribe to this code. Many firms that are not members of that organization have adopted this code or codes similar to it.
The code commits the employment agency to extend professional service to all qualified employed and unemployed applicants regardless of race, color, creed, religion, national origin, sex, age, income level or physical handicap.
The code assures that:
In selecting an employment agency, ask whether it subscribes to a code of ethics. If, in the course of working with an agency, it violates one or more of the code's provisions, consider finding another, more reputable agency.