Talking to a recruiter can be intimidating. When it feels like they’re speaking a different language, check out this glossary for the plain English version of terms like bill rate, requisition, W-2 employee, and more. With a solid handle on the industry vocabulary, you can decide which recruiting agency is right for you!
- Agency – Also called a staffing agency or recruiting firm, this is a company that employs recruiters.
- Bill rate – The amount an agency charges their client company for their work recruiting for a position.
- Client – The company that contracted the agency to help them fill a position or positions. The client is usually the hiring organization (where the candidate will work once selected). In most cases, clients have their own workforce in addition to short-term employees placed by recruiters.
- Contractor – Also called a “temp” or a “contingent worker”, person working in a temporary position, likely through an agency, for a client.
Recruiter – person who contacts candidates to fill positions for clients. For larger companies, recruiters are often full time employees working to fill ‘in house’ positions
- Direct-hire – For these positions, a candidate is hired directly and immediately by the client company, which then pays a fee to the recruiter who supplied the candidate (this is also referred to as “headhunting”).
- External recruiter – A recruiter who works for a recruiting or staffing agency and recruits candidates for multiple different client companies.
- Internal recruiter – A recruiter who is an employee of the hiring company and only recruits candidates for that company.
- Managed Services – A type of Staffing Service where the staffing agency manages the workers. Managed service vendors provide HR, recruiting, health care, PTO, and many other benefits to their employees. Often used for services like Security, Janitorial, and Food Services, but can be used for any industry.
- Pay rate, or Base pay – The amount an agency pays an employee they hire and assign to temp or temp-to-hire positions.
- Recruiting agency – Typically a company of recruiters only focused on direct-hire positions. Usually does not offer temporary employment options.
- Requisition – Also called “position” or “opening” or “req,” this is a term for the position the recruiter is trying to fill (including job description, duration, location, hours, rate).
- Staffing agency – An agency that employs and pays workers directly while they work for a client company in a temporary position. Some staffing agencies also place direct-hire positions.
- Statement of Work (SOW) – Document that describes the type of work to be done and the skills needed for a Managed Services contract. Managed Services is sometimes referred to as SOW contracting.
- 1099 position – This refers to a relationship between two companies. The “client” pays invoices from the “vendor,” the worker. Some people prefer to work as a 1099 contractor, where they invoice for the work and are paid the exact amount on the invoice. 1099 positions typically come with no benefits and minimal legal protections because the worker is seen as a vendor to the client, not as an employee.
- Temporary position – Any position that is not intended to become a long-term regular employee for the client company (payroll is through the agency). Note: some temporary positions can last years, depending on the contractor’s performance and client’s policies
- Temp-to-hire – A position that starts out like a typical temporary placement (paid through the agency while working for a client) but has the potential to become a direct-hire after a period of time.
- Outsource – Paying an external company to complete a predetermined amount of work. Example: “We outsourced our web development to a local marketing company and they did a great job with it.”
- W-2 position – This is the typical employer / employee relationship. W2 workers are protected by a variety of laws (for example, minimum wage, Affordable Care Act, overtime, etc) and are paid through a traditional paycheck model (as opposed to 1099 invoicing). These paychecks will have taxes and other deductions taken out, so your “take home” pay is typically less than the official pay rate for the position.
*This glossary was originally written as a guest post on Mac’s list, available here: https://www.macslist.org/for-employers/recruiting-terms-glossary-learn-the-language-to-land-the-job