Employment Agencies

SIC 7361

Industry report:

This category pertains to establishments primarily engaged in providing employment services, except theatrical employment agencies and motion picture casting bureaus. Establishments classified under this code may assist either employers or those seeking employment. Establishments primarily engaged in operating theatrical employment agencies are classified in SIC 7922: Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services; those operating motion picture casting bureaus are classified in SIC 7819: Services Allied to Motion Picture Production; farm labor contractors are classified in SIC 0761: Farm Labor Contractors and Crew Leaders; temporary help services are discussed in SIC 7363: Help Supply Services.

Industry Snapshot

An employment agency's major function is to place people into short- or long-term positions. In the late twentieth century, the industry was positively affected by the boom in technology, the government's efforts to get more people off welfare and into employment, the shift from corporate paternalism to the independent portability of employment skills, and the growing need for professionals on short-term bases. One cannot discount the role of temporary employment firms as a try-before-you buy means of finding full-time employees.

Employment agencies employed a daily average of 2.6 million temporary and contract workers in the United States in the 2010. During the 1990s, staffing services was one of the fastest growing segments of the U.S. economy, and temp agency jobs grew from less than 1 million average per day in 1990 to 2.54 million in 2000. The financial impact of temporary placement services was evidenced by Adecco, the world's largest employment agency (based in Switzerland), which posted revenues of more than $21 billion in 2010.

Employment agencies are susceptible to changes in the economy. In a strong economy, with low unemployment rates, candidate numbers tend to be lower, but many businesses come knocking in need of help to identify high quality employees in a tight job market. Agencies may even have difficulty filling a customer's request for employees. When the economy slumps, however, the number of people looking for work increases, and candidates flood the employment offices in search of work. With so many available workers vying for so few new jobs, in a recessive economy, employment agencies tend to find themselves with too many potential employees and not enough business clients.

An economic recession that began in 2001 and was exacerbated by the terrorist attacks of September 11 threw the employment industry into a tailspin. Both temporary and permanent placements fell off significantly, leading many employment firms to leave the industry as profitability disappeared. However, as the economy recovered in the mid-2000s, the employment industry began to show significant improvement, turning robust by 2005.

The boom was short-lived, however, as the country entered another economic recession in 2007. The downturn in the economy hurt the employment agency industry, with more than 1.4 million jobs lost in two years. According to the American Staffing Association, sales also declined, dropping more than 24 percent in fiscal 2009 alone. However, by mid-2009, staffing numbers were starting to increase again, signaling a recovery in the economy and the employment services industry. That year, revenues for the staffing industry totaled $61.4 billion, 87 percent of which came from temporary and contract staffing and the remainder from search and permanent placement services.

Organization and Structure

Employment agencies are defined by the National Association of Personnel Services as "offering an orientation of finding jobs for people; building a back log of screened candidates by consistent advertising and by referrals from satisfied candidates and employers." Placement fees are paid by either the job-seeking candidate or the employer and are contingent upon an offer by the employer and acceptance by the job seeker. Fee structures vary but are generally based on a percentage of the annual salary of the job being filled. These fees are also known as contingency fees.

Employment agencies are also called personnel placement firms, personnel consulting firms, and personnel service firms. Executive search, recruiting services, "headhunters," and other firms that help employers fill higher level executive and management positions and place qualified candidates for these particular jobs are sometimes also known as employment agencies. Private agencies are more likely to combine career counseling and placement as one service. Applicants are more "job-ready," whereas public agencies deal with people who are deemed in great need of supportive services before being considered job ready.

Licensed employment agencies are paid by job seekers that come to them for placement. These agencies generally serve hourly workers, first-line supervisors without degrees, clerical workers, and entry-level technical and professional workers. Recruiters locate candidates for positions. Professional search consultants conduct in-depth searches for potential candidates to fill specific job openings.

Search consultants can work on either a contingency or retainer basis. A contingency search typically costs 20 to 30 percent of the hire's salary, paid once the search is completed. Retained searches, usually for top-level jobs, cost a third of the placement's first-year pay package, a third of which must be paid upfront. For both types of searches, however, other fee arrangements are possible. Some firms will cut their fees if they are guaranteed several assignments. Other recruiters have begun charging on a per-hour basis. With so many start-up firms looking for talent, recruiters, like accountants and lawyers, have received equity stakes in lieu of cash compensation.

Background and Development

The business of serving as a broker between employers and those seeking employment has existed for centuries, beginning perhaps as early as the fifteenth century. The English practice of indentured servitude would fall under this definition because it involved men acting as employment brokers or agents of free workers. These brokers acted on behalf of employers who did not have easy access to laborers. They negotiated the contracts that bound these free people to work for a specified period. Indentured servants agreed to work in exchange for benefits that ranged from free passage to the New World to food and lodging.

The first known private employment agencies were called "intelligence offices," which began sometime in the early nineteenth century. In his book, Martinez cites the "Employers and Servants Protestant agency"--established in 1819 for the "better regulation of Domestic Servants"--as the earliest reference to a bona fide employment agency. Martinez also notes that the first large scale employment agency appeared in 1863 as the American Emigrant Company, created to "secure laborers and skilled workers for a number of American employers." Fees were collected from employers and registration fees exacted from European job seekers. The agency paid for transportation to the United States then was reimbursed via future deductions from the immigrant worker's wages.

Private employment agencies appeared with more frequency in the latter nineteenth century as evidenced by classified advertising in newspapers of the period. Before World War I, private employment agencies recruited manual laborers or female domestics. Almost anyone could be an employment agent--the middleman and often the only source of information between employers and prospective workers.

Immigrants were valuable commodities to employment agencies because they provided cheap, capable, and, to their detriment, naive labor. Because of this imbalance, many immigrants were abused by unscrupulous employment agencies. Employment agencies were often located in poor neighborhoods, saloons, and pool halls, usually as part of patronage systems in big cities like Chicago and New York. People who "got out the vote" were rewarded with jobs.

Agencies specializing in hiring women as domestic servants also concentrated on hiring African American and immigrant women. But there was a difference, states Martinez: "Male employment agents sold jobs to the applicants, while the domestic employment agents sold servants to the housekeepers. In each case, the object being sold was scarce and the buyers were plentiful. Thus the buyer or the party paying the fee was not given as much service as the more precious marketable commodity."

Private employment agencies often had less than stellar reputations. Besides instituting a form of legalized indentured servitude, many often trafficked in providing houses of ill repute with immigrants and minority women who were often unaware of the actual type of employment to which they were applying.

Specialization in the industry did not occur until after the turn of the century, when agencies began serving teachers, nurses, barbers, and engineers. But the generic employment agency in the early 2000s evolved from what was termed the "white-collar" agency that placed clerks, secretaries, and managers in office positions.

In the late nineteenth century, white-collar workers primarily obtained work on their own. But by the early years of the twentieth century, employers found it increasingly difficult to find qualified office help and became increasingly dependent on employment middlemen to bail them out. After World War II, this type of agency multiplied rapidly.

Regulation.
Government-supported agencies, by contrast, existed as state and municipal agencies as early as 1834 to alleviate unemployment. The U.S. government established a federal employment agency in reaction to the economic crisis of 1907--its focus being the employment of newly arrived immigrants.

This action paved the way for another federal initiative in 1913 when the Department of Labor separated from the Department of Commerce to "foster, promote and develop the welfare of wage-earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment."

Between 1914 and 1917, specialized services such as the National Farm Labor Exchange, Marine Placement, and youth services were attempts to establish a national employment agency. The U.S. Employment Service was created in 1918 but was deemed ineffective in resolving unemployment because after the war ended, so did the worker shortage. Placement work for soldiers, sailors, and other civil service government workers pressed into service during the war was also discontinued by the fall of 1919.

It would take the Great Depression for the U.S. Employment Service to be resurrected under the Wagner-Peyser Act in 1933. The agency's principle focus was to find jobs for the millions of unemployed by overseeing the functions of labor recruitment under the National Recovery Act and state employment services. Access to employment services as a right of American citizenship was formalized under this act's passage.

The emergence of a federal agency appeared to threaten those in the private sector. Private employment agency leaders charged the government with spending taxpayers' money to find jobs for people who were already employed. Instead, they supported using tax dollars only for training and employing the unemployed and called for restricting federal employment programs to people who qualified for unemployment insurance.

Widespread abuse of job seekers by private employment agencies, however, had prompted attempts by state governments to regulate the industry. At issue was whether individuals had a right to full employment for free or whether they had to pay for it. The prevailing view at this time was that private agencies exploited workers by charging exorbitant fees and not guaranteeing job openings, especially when work was scarce. Private employment agencies also inhibited the free flow of labor during times of high unemployment. By 1914, 24 states had tried to directly regulate private employment agencies, and 19 states had created free public employment agencies. By 1928, all but nine states had instituted some form of legislation to regulate private agencies, either directly or indirectly. Canada and several European countries were also in the process of banning such agencies and establishing nationalized employment services.

Reform.
After World War II, private employment services underwent tremendous specialization in response to the changes affecting American industry, whereas public employment agencies remained relatively less specialized along occupational lines. In the 1940s people sat around or went out on day jobs. From 1947 to 1960, the employment placement fees were paid by the employee.

The private employment agency industry earlier had created its own trade association, the National Employment Association, which was renamed the National Association of Personnel Consultants in the 1970s and later became the National Association of Personnel Services (NAPS). As a trade association, it set out to abolish abuses and end discriminatory hiring practices as well as to lobby for its member agencies. By 2010 NAPS represented about 1,500 member employment agencies nationwide, including regional, state, city, and local private employment agencies. In addition to representing its member employment agencies, NAPS also conducted annual seminars and supervised the certification of employment agency professionals.

The debate over whether employment agencies should be run by the government or by privately held companies continued into the early 2000s. Both types of agencies existed either as state and municipal-run public employment services or as private personnel consulting (employment) agencies. Public and private employment agencies provide services to the public. A 1991 Current Population Survey by the Bureau of the Census noted, however, that "Job seekers using private employment agencies had the highest likelihood of finding employment in 1991; almost one-fourth of them found jobs. In contrast, job seekers placing or answering ads or using public employment agencies were among those least likely to find a job in the second month." The survey also noted that "almost 28 percent of the women who used private employment agencies were employed by the second month. In contrast, private employment agencies were the least successful for men--less than 23 percent of them found jobs" in that time period.

The staffing industry maintained a growth rate of 10 percent to 14 percent in the mid-1990s. Technology became a hot field of outsourcing. Companies were requesting more workers in the computer, health care, legal and finance fields as they focused on job flexibility. The staffing industry consolidated significantly in the mid- to late 1990s. For example, in 1997 the staffing and IT services industry recorded 356 mergers and acquisitions, up 16 percent from the previous year.

A small but possibly significant factor in voluntary unemployment may be the number of people whose interest in managing their own careers transcends the old company paternalism idea as the growing concern for their dispensability creates greater anxiety. Some people may leave by taking advantage of voluntary or involuntary "buyouts" or because of changes in lifestyles where other factors become more important.

New demand for just-in-time temporary workers was created by temporary work surges. In 1995, a record 2.26 million temporary employees worked daily. Challenges in finding people with appropriate skills came from demands for highly skilled workers and a shrinking labor force stemming from an aging population.

In 1998, revenues for the 59 public staffing firms tracked by Staffing Industry Report grew 27 percent, while net income was up 20 percent. These results were down slightly from 1997 levels, owing to soft demand in some sectors and tight recruiting markets.

By contrast, the government's emphasis on employing the unemployed fostered growth of placement agencies. At the same time, declining government involvement in the job search process fostered the process of self-placement. The unemployed prefer direct job applications and networking over more formalized methods. The shift in jobs out of the manufacturing sector in part eroded government placement as well.

Growth of the Industry.
Rapid growth in what is known as the private personnel consulting/employment agency industry occurred within the last quarter of the twentieth century in response to a fluctuating economy. Double-digit increases in revenues throughout the 1970s and 1980s made executive recruiting a booming business. Some industry leaders attributed the slowed growth in revenues in the 1990s to the fact that the industry as a whole was maturing. Nonetheless, with rapid growth came calls for reform.

Private employment agencies are market-driven, money-making businesses. Some professionals advocated that agencies should concentrate more on developing relationships with employers in order to generate business. Employment agencies were being forced to provide a higher level of services such as reference verification, computer testing, and consulting to justify the fees they charge.

Other professionals called for revamped fee schedules and better working arrangements between clients and consultants. For example, Donald A. Levenson stated in Personnel magazine that recruiting fees should no longer be based on "rigid fee schedules" but on "the value of the job, the degree of difficulty anticipated in recruiting candidates and the level of service desired by the client."

An increasing number of managers in the publishing industry used professional search firms. Many companies used the Internet. For example, National Personnel Associates, Inc., founded in 1956 to provide leading edge support to executive level contingency placement firms, was one of the first to maintain a Web site for the public and its members.

A growing number of employment agencies used employee benefits to recruit workers. Benefits including paid vacations and holidays, bonuses, health care insurance, computer training, stock purchase discounts, 401(k) pension plans, and advancement potential started to be offered by major temporary help services in 1995. In a survey of 2,000 temporary workers by the National Association of Temporary and Staffing Services, 56 percent received holiday pay, 46 percent free skills training, and 39 percent had paid vacation days. Kelly Services provided a week's paid vacation after working 1,500 hours in a 12-month period and six holidays for qualified workers. Manpower Inc. offered the same, plus two weeks of vacation after 1,800 hours.

The "executive-for-rent" concept gained in a business world concerned with re-engineering and downsizing. Paul Dinte, one of the first to capitalize on the idea, formed a leading executive firm that provided executives on a temporary basis.

In late 1999, the employment picture was excellent. Unemployment stood at a 30-year low of 4.1 percent, a remarkable achievement when coupled with continued low inflation. The U.S. Bureau of Labor Statistics predicted employment would increase, with all of the job growth in the services sector. By occupation, the greatest growth was for computer engineers and support specialists.

Staff reductions induced by restructuring and corporate mergers continued to hurt workers in the late 1990s. Despite the tight labor market, corporations announced more than 680,000 job cuts in 1998, the highest number for any year in the 1990s. Many of the cuts stemmed from the economic crises in Asia, Latin America, and Russia, which hurt manufacturing export markets and also caused increased competition from imports. Mergers and acquisitions also contributed to the layoffs.

At century's end, however, the economy was producing so many jobs that laid-off workers usually found new employment, albeit not always at prior salary levels. Older workers had more to fear than the young, who moved easily into technology-related employment stemming from the rise of the Internet. But workers from every segment of society--including inner city youth who have often been locked out of private-sector employment--were benefiting from strong growth and low inflation.

As employers scrambled to find qualified workers, even small businesses were turning to executive recruiters--formerly the preserve of major corporations--to staff their companies. Much of the new business was coming from high-tech start-ups, generously supplied with venture capital to acquire the talent they needed. In the booming equity markets for new companies in the late 1990s, these firms were also able to offer headhunters stock options in lieu of cash for conducting the search.

The outlook for employment firms was mixed. But the booming economy created an enormous need for workers, a need that often could only be satisfied with the use of professional employment firms. Still, the technologies of the Internet and database management were making it possible for some companies and job seekers to bypass staffing firms altogether. Employers could post job descriptions at their company Web sites or in newsgroups and have workers from around the world respond. New specialized employment Web sites appeared daily, concentrating on employment in fields like accounting and software.

Indeed, online job-matching became one of the fastest-growing businesses on the Internet, generating $105 million in 1998. Many employment firms were creatively using the Internet to attract clients and find hires. The Internet broadened and sharpened the tools available to agencies for researching and reaching potential job candidates.

Even in the Internet age, recruiters served important functions. They could still make the argument that the best candidate for the job is probably not looking for a job at all and that the recruiter was best placed to find him or her and make the initial overture. Recruiters can also act as go-betweens in salary negotiations, which is often the toughest part of bringing a candidate onboard.

After incredibly successful years during the 1990s, fueled in part by the dot-com and technology industry boom, employment agencies entered the 2000s at a slowed pace. Just as insiders were analyzing the potential effects of an oncoming recession, the terrorist attacks of September 11, 2001 slowed the U.S. economy markedly. With nearly no new hiring taking place and an ongoing rash of layoffs and downsizing, employment agencies were deluged with people looking for jobs and few business clients looking for workers. The impact on the employment services sector was substantial. According to the U.S. Department of Labor, Bureau of Labor Statistics, the number of temporary jobs fell to 2.87 million by November 2002, down from a high of 3.95 million during the summer of 2000.

Previously, many temp jobs resulted in full-time employment. It was a way for both the employer and the employee to take a test drive before signing the final papers. Many workers used temp positions with the stated intention of landing a permanent position within a company. However, the recession altered this basic assumption, and temporary suddenly actually meant temporary. By the end of 2002, some firms reported that temp-to-permanent opportunities had fallen by 50 percent. With fewer jobs available, unemployed skilled workers were being offered much lower paying positions, often well below their ability level.

At best, many workers became "permatemps," that is, workers who are, for all practical purposes, permanently employed but are laundered through a temp agency to a business client. This situation tended to leave workers with no job security, and they were seldom provided the same level of benefits as regular employees. According to The American Prospect, temporary workers between the ages of 20 and 34 earned around 16 percent less than their peers who were regular employees doing the same work. Despite employment agencies touting available employee benefits, only 5 percent of this group was covered by employer-provided health insurance. In all, less than one in five temporary workers received regular benefits such as health insurance coverage.

If workers who use employment services were taking a hit, so also were the agencies themselves. Although the leaders in the industry tried to weather the storm by diversifying their offerings, smaller firms were more susceptible to shifts in the market. For example, during September and October 2003, Staffdigest, a staffing industry magazine, contacted 591 staffing agencies around the nation. According to the results of their survey, 11 companies had been sold or merged with another staffing company, 94 had telephone disconnections, and 67 reported budget cuts. Thus nearly 30 percent had been somehow significantly affected by the recessive economy. The only segment of the industry that remained exceptionally strong was health care staffing, which continued to grow at a rate of 15 to 20 percent annually as a response to an ongoing shortage of registered and licensed practical nurses.

Those in the staff industry tend to be the first to suffer at the onset of difficult economic times; however, they are also often the first to begin feeling the benefits of a resurgent economy. As businesses regain strength, they often turn to employment services to fill the gaps in their workforce caused by previous layoffs and downsizing.

After a suffering significant decline during the early 2000s, by 2004 employment agencies were once again busy. According to the American Staffing Association (ASA), U.S. staffing firms hired 11.7 million people in 2004, of which 8 million resulted in permanent placements. Although not a return to the record high placements of 13.2 million set in 2000, the numbers compared positively to 10.7 million and 9.7 million placements in 2003 and 2002, respectively.

After experiencing double-digit growth during 2004, the industry continued to expand during 2005 although at a more level pace, with executive search firms also experiencing renewed growth along with providers of temporary and contract workers. "The labor market appears to have settled back into a pattern of stable growth, which is good for the economy and good for the staffing industry," ASA president and chief executive officer Richard Wahlquist told the Mississippi Business Journal in September 2005. "Staffing companies continue to report particularly strong permanent placement demand and expect that to continue through the balance of the year."

According to the ASA, revenues from temporary and contract staffing services equaled $63.34 billion in 2004, up 12.5 percent from 2003 and nearly returning to the industry's peak performance of 2000, with sales totaling $63.61 billion. After 11.5 percent year-on-year growth during the first quarter of 2005, the industry posted revenues of $16.9 billion during the second quarter of 2005, up 7.3 percent year on year and exceeding the previous high set in the fourth quarter of 2004. Sales went up again in the third quarter of 2005, reaching $17.6 billion, an increase of 6.8 percent over the same period in 2004. The heyday was short-lived, however, as the nation entered another economic recession in 2007.

Current Conditions

Employment agencies suffered along with most other U.S. businesses during the economic recession of the late 2000s. However, after suffering declines in employment numbers and sales in 2008 and 2009, industry started to rebound in 2010. According to the American Staffing Association (ASA), sales in the industry were $18.1 billion in the third quarter of 2010--up 35 percent as compared to the same period a year earlier. At that time, employment agencies employed an average of 2.6 million temporary and contract workers per day, an increase of almost 25 percent from 2009. Lorie Almon of Seyfarth Shaw LLP in New York expressed hope that this was a sign that "employers are dipping their toe back into the water." In addition, in November 2010 Richard Wahlquist of ASA stated that "During the past 12 months, staffing firms have added over a half million new jobs to the economy."

According to Tech Job Watch, a service of The Wall Street Journal, jobs in IT were showing the strongest growth in the temporary employment business in 2010 and 2011. Sectors that were expected to look for temporary IT help included "data-intensive sectors," such as banking, financial services, and the healthcare industry. Melisa Bockrath of Kelly Services noted that "Basically, [Employers] are looking at a workforce solution model that gives them flexibility. And [hiring temp workers] gives them access to talent they might need."

Industry Leaders

In 2010, two of the largest employment agencies in the United States were Kelly Services Inc. and Manpower Inc. Smaller but significant U.S. agencies included TriNet Group and SFN Group.

Switzerland-based Adecco was the largest employment agency in the world, with more than 100,000 clients and 5,500 offices around the globe. It was formed by the merger of Switzerland's Adia and France's Ecco. Adecco places temporary and permanent personnel in many industries. The company significantly increased its presence in the United States by purchasing New York-based Olsten Corporation early in 2000. Previously, Olsten had itself been a leader in the industry with over 1,400 offices in the United States and more than a dozen other countries. In 2009, Adecco reported revenues of $21.2 billion.

Based in Milwaukee, Wisconsin, Manpower reported revenues of $16.03 billion in 2010. The company operated 4,000 owned or franchised offices in 80 countries and was placing about 4 million people a year in temporary positions, making it the largest temporary employment agency in the world.

Troy, Michigan-based Kelly Services, formerly known for its "Kelly girls," expanded from its female secretary roots to become one of the largest U.S.-based temporary agencies in the United States. By 2010 the firm offered such employees as lawyers, scientists, substitute teachers, and teleservices personnel. Kelly assigned about 480,000 temporary employees a year, and annual revenues reached $4.3 billion in 2009.

TriNet Group, based in San Leandro, California, provided employee services to about 8,000 clients in 2010, mostly in the financial, health care, and high-tech fields. TriNet added more than 350 small business clients representing almost 10,000 employees when it purchased former rival Gevity HR in 2009. Sales also increased, rising from around $100 million in 2008 to more than $160 million in 2009.

SFN Group, formerly Spherion Corp., of Fort Lauderdale, Florida, provided temporary staffing services as well as professional and executive recruitment and placement and employee consulting/assessment. The company, which operates through a network of approximately 600 offices, had around 8,000 clients and posted revenues of $1.7 billion in 2009.

Among the largest Internet employment sites were Monster.com, HotJobs.com, CareerPath.com, and CareerMosaicCareerBuilders.com. Yahoo! was prominent in local and regional job listings. In the college market, JobWeb and Jobtrak MonsterTrak were top names.

Workforce

According to the U.S. Department of Labor, Bureau of Labor Statistics (BLS), workers in the employment services industry totaled more than 3.1 million in 2008. The largest category was office and administrative support positions, which accounted for about 25 percent of jobs. The most growth, however, was expected in higher positions. For example, jobs in management, business, and finance, which accounted for about 6 percent of the employment base, were expected to increase by almost 28 percent by 2018. Professional and related occupations, which included nurses, accounted for 11 percent of the workforce and were expected to see a 23 percent increase by 2018. Service occupations, which made up 9 percent of workers, were also predicted to increase 23 percent in the same time period. Other categories of jobs included construction and extraction (5 percent of workforce), transportation and materials moving (19 percent of workforce), and production, such as assemblers in factories (19 percent of workforce). Overall, the BLS predicted jobs in the employment services industry would increase by 19 percent by 2018 due to a fast turnover rate.

Most employment agencies, public and private, preferred to hire college graduates for interviewer jobs. Expansion of the personnel supply industry, especially in the private sector, was expected to continue. In addition to private personnel firms there were a number of positions in state employment agencies. Earnings varied because private personnel firms tended to pay workers on a commission basis with total earnings dependent on the volume and value of the business they brought in. Commission rates were usually 30 percent of whatever the client was billed. Some were paid on a salary plus commission.

Research and Technology

The Internet truly changed the face of the job-hunting industry in the late twentieth century. By 1999, the Internet had become second only to newspapers as a tool for recruiters and job seekers. Throughout the 2000s, hundreds of job sites popped up, in addition to many companies posting employment opportunities on their corporate websites. According to The Bond Buyer, more than 4.4 million jobs were posted on the leading Internet job boards in late 2010.

Employment agencies also benefited from the increase in web activity. Many considered the use of computer databases and online services to track potential employees and job openings a low-cost alternative to traditional search methods. A computer database contains information on likely candidates and can be compiled by an employment agency, search firm, or government office. In a matter of seconds, a candidate's resume can be accessed from the database according to the qualifications, areas of expertise, and training specified in a search. Employment agency professionals can either use one of the hundreds of recruitment databases on the market or develop their own.

Some databases are open to the general public, but most corporate job banks and other privately held recruitment databases are confidential and are restricted to employment agency personnel. Because companies are turning to employment agencies to find managers and specialists with more sophisticated skills, they are more likely to use employment agencies using the latest technology. Employment agencies, in turn, are able to charge a flat fee based on the difficulty of the job search via a computer database, instead of charging employers a contingency fee based on a candidate's salary.

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