The need for talent forever exists in corporations. The search for the right kind of talent is probably every organization’s biggest challenge. There enter the intermediaries like the placement agencies who bridge the gap between the organizations and potential employees.

Traditionally, what does a placement agency do?

A placement agency is an organization which matches the employers to the employees. The recruitment process comprises of sourcing, interviewing, reference checking and matching candidates with clients - usually companies or larger corporations, both in terms of the work culture of an organization and the specific requirements of the position and finally selecting a suitable candidate for a vacant job position.

The agency then facilitates an interview with the client who is seeking to fill a vacant position. The agency remains the point of contact between both the parties.

If an agency is successful in what it is supposed to do, then both the parties benefit from it

  • The client gets the right candidate for a vacant position.
  • The candidate is placed in an appropriate and satisfying position.
  • The agency receives an appropriate fee for their work.

Do companies use placement agencies?

The answer is yes and no. Most organizations do use placement agencies. More often than not organizations outsource their core HR function. They outsource their recruitment function mainly because it’s cost effective. According to a report by Growth Praxis, organizations can save up to 40% of their recruitment costs by outsourcing their recruitment process. They give this function to HR experts who find the crème de la crème in the talent acquisition process. In such corporations, these placement agencies or now as they are called HR consultants, play a major role.

The role that the Staffing firms or consultants play in today’s day and age goes beyond than just finding the right kind of talent. They also offer various other HR services like structuring the payroll services, learning and developing policies and sometimes even the compensation and benefits policies. So, companies in the sense do use these agencies not just to hire people but also to retain them, reward them and so on.

Having said this, there are quite a number of companies who do not prefer to recruit their talent through third party vendors. Many of these organizations come up with innovative ideas in the process of recruiting talent. There is a major trend amongst companies to build a brand through recruitment strategies. For example, a social media company, Hootsuite hosted a series of live broadcasts, giving a virtual tour of all their office locations while also advertising available jobs. This is a great way to connect with passive candidates and it also helped candidates connect with and understand Hootsuite as a workspace. This transparency about the Hootsuite experience bolstered their brand while sourcing candidates at the same time.

There have been a lot of emphases lately on “employment brand”. Savvy candidates will evaluate company brands before applying to or accepting a job. There are studies that talk about, ‘The most favorable place to work’, which is a result of employment branding, by attracting new talent. Hence, it becomes imperative to make your website a strong tool for engaging talent.

Is there a chance of replacement of placement agencies?

Companies are now extensively using Social Media as a new form of recruitment. LinkedIn, Twitter, and various other job portals enable companies to be in touch with candidates on a personal level, thereby avoiding intermediaries like placement or recruiting agencies. Even more importantly, studies show people recruited via social media are more likely to be hired, and stay on longer than candidates found via other methods. This is one of the quickest, easiest and most effective ways to recruit candidates. A study also revealed that most companies check a candidates’ social media links, like Facebook, Twitter and so on before short listing them.

Companies also use Data analytics for hiring candidates. Cloud-based hiring is the trend of the future. Cloud-based hiring tools allow recruiters to affordably, not to mention, easily find, evaluate and organize top job candidates. While, innovative assessment and filtering techniques would help provide a 360-degree holistic view of top applicants.

These are just some of the various other ways of hiring talent in today’s technological age.

When we are still on the topic of replacement of the traditional placement agencies, let us take a different perspective. A student who is pursuing her business degree might not want to enroll herself in a placement agency. Colleges and Universities have placement cells that directly get in touch with companies. As of lately, even these placement cells are getting replaced by the online job/internship portals like,, LinkedIn and so on. Students are able to get a direct point of contact with the company rather than relying on third party sources. An added advantage to this form of recruitment from a candidate or student’s perspective is that it is free of cost. Finding an internship on Internshala takes a student hardly any resources. Similarly, finding a job on LinkedIn takes very less time too.

Now, one might argue that the Placement agencies do not just provide jobs but also help train candidates in certain skills. And, obviously as stated earlier, this comes with some cost factor involved. The counter argument to that is even our online portals provide certifications to aspirants, most of them bring free of cost.

Over the past decade, technology has drastically transformed the recruiting world, and it shows no signs of stopping. Through it all, however, the special skill possessed by all great recruiters remains the ability to see through all the messages, jargon and interview questions to find someone who’s truly a great fit for the company. As a parting thought, we might want to amend our traditional definition of what a Placement agency is and its much more than just getting job assistance.

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