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Understanding the Differences between a Recruitment Agency and a Labour Hire Agency

by Olufisayo
Recruitment Agency

Looking for people to fill job positions is a time-consuming and stressful process. Because of this, many companies often hand this task to either a third-party recruitment agency or a labour hire service agency. Although both providers share similar roles, their descriptions and hiring strategies aren’t exactly the same.

In this article, we’ll take a look at the differences between the two to get a better understanding of their unique functions.

What is a Recruitment Agency?

Typically, the task of recruitment agencies is to help applicants find job vacancies that suit their skills. However, companies can also turn to recruitment agencies if they’re a small business or don’t have a dedicated in-house recruiter.

Recruitment agencies also have the expertise and resources to hire the best candidates for their clients. What’s more, they’ll handle all the tedious procedures that are demanded in the recruitment process. These include the following:

  • Place job listings online
  • Keep an eye out on new resumes and CVs
  • Background checks

Once candidates are hired, they become the responsibility of the recruitment agency’s clients. This means that their wages, management, and other benefits will be taken care of by the company that hired them.

Working with a successful recruitment agency provides businesses with the following benefits:

  • Helps reduce cost. Hiring people is a long and expensive process, so teaming up with a third-party recruiter is a great way companies can save on resources.
  • Gain access to large skill pools. Recruitment agencies have access to large databases of candidates with varying skills and work experience. They’re also knowledgeable and up-to-date- with the latest news in the labour market. Because of these factors, they’re able to recruit people for any position quickly.
  • Increased chances of hiring the perfect person for the job. Reputable recruitment agencies only want the best for their clients. As such, they follow a specialised recruitment process to ensure that they provide the most qualified individuals for their client companies.

What is a Labour Hire Agency?

What makes labour hire agencies somewhat similar to recruitment agencies is that they provide ready and willing workers a connection to companies seeking labour. However, unlike recruitment agencies, labour agencies work on a “labour hire” arrangement.

In this arrangement, candidates are employed by labour hire agencies; not their client companies.  This means the agencies will be responsible for their workers’ wages, insurance, and other benefits. Labour hire agencies also provide preliminary training and onboarding to ensure that each candidate is capable of taking on the job.

Thanks to this arrangement, labour hire agencies provide businesses with the following benefits:

  • Also helps in reducing cost. Since labour hire agencies will handle all the procedures in the recruitment process, as well as the training, companies can save on labour cost.
  • Can easily adapt to the industries changing landscape. Labour hire agencies can tweak their arrangements to address the ever-changing demands of the labour force. Because of this, businesses can keep up with their production requirements and their product’s seasonality.
  • Available for short notice and emergency cover. The candidates in labour hire agencies are ready and willing to start work. As such, they can immediately provide temp cover should a company fall short on workers.

Which Agency Should Businesses Choose?

Both agencies have something to offer when it comes to recruiting new workers. However, depending on what the business needs, one agency might be better than the other.

If companies want to build a reliable team for their brand, then turning to a recruitment agency is the best option. If they’re looking for candidates to fill in for absent workers or short term projects, on the other hand, then a labour hire agency is what they need.

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