How do Staffing Companies Make Money?

How staffing companies make money is a big question for entrepreneurs. No doubt, recruitment agencies or staffing companies in India are generating massive revenue. In this article, we have tried to answer your question in the easiest possible way.

Let's understand what staffing companies are, the different types of them, and how they make money.

There are two types of recruitment processes in the business world.

1. Internal recruitment
2. External recruitment

We are going to discuss the external recruitment process as staffing companies work externally, so we have to understand external recruitment first to understand how staffing companies make money in India.

What is a staffing company?

A staffing company is a team of recruiters who serve businesses with their recruitment needs. Several recruiters work independently and earn accordingly. At the same time, several recruiters join staffing companies.

So, a long story short, staffing companies are a team of recruiters who serve businesses with recruitment or hiring processes.

Types of Recruitment Agencies

There are several staffing companies or recruitment agencies in India working for different industries and goals.

Here is the list of different types of recruitment agencies.

1. Contract staffing agency
2. Executive staffing agency
3. Niche/Specialist agency

Recruitment fees or commissions could be different depending on the type of recruitment services they provide. Let's see how staffing agencies make money.

How do staffing companies make money?

There is no earning cap or limit for limit as it totally depends on their recruiters. Staffing companies usually hire recruiters to source and place candidates for their clients.

There is a college degree required to become a recruiter. In maximum cases, staffing companies hire and train their recruiters for better performances.

As mentioned above, different types of companies charge different fees. Still, here is the basic idea of how staffing companies generate their revenue.

Upon selection of the applicant/candidate recommended by the staffing company, the Company will pay the staffing agency for the services rendered along with terms as follows: 8.33% of annual CTC: Gross Annual compensation would cover the employee's total cost to the company including Basic, CLA/HRA, LTA, Fixed Allowances, Medical, Car related reimbursements, Retrials, Assured Performance Bonus.

It would not include any element of a Variable nature such as Bonus/Ex-gratia and Various Performance Incentives that may be decided by the management from time to time. Taxes and duties if any shall be extra.

This charge is only for a successfully hired candidate who has worked at least for 3 months for the organization.

Conclusion

Recruitment or staffing companies are great when it comes to providing quality staffing services. They provide a win-win situation for both employers and job seekers. Job Museum is a leading job consultancy in Pune, Delhi, Mumbai, and all the major cities in India.

They also provide the best resume writing services in Bangalore, PuneChennai, and many more cities in India. Head on to our website for more interesting reads.

Kruti is working for Job Museum recruitment consultancy. Job Musuem is one of the leading job consultancy provide job placement in surat across India.