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A recruiter finds people you then employ. That one sentence separates recruiters from the two services they are most often confused with. A staffing or labour hire agency employs the worker itself and supplies them to you. An executive search firm is retained and paid in stages to run a mapped search for a small number of senior roles. A recruiter is typically paid a percentage of the salary on placement, and only if you hire.

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Because you become the employer, everything that goes wrong with the employment relationship is yours. The recruiter does not carry the award classification, the superannuation, the pay slips or the unfair dismissal risk. That makes the handover at offer stage the important part of the engagement: what was promised to the candidate, what the classification is, and what the contract actually says.

Australian recruitment also has its own compliance layer at the front end. Candidate data is personal information handled under the Privacy Act, work rights must be checked for non-citizens, and job advertisements must not offer a rate of pay that would breach the Fair Work Act or an applicable instrument. A recruiter who cannot speak to those three things is a sourcing service, not a recruitment partner.

Recruiter, staffing agency or executive search: who employs the worker

With a recruiter, the placed person becomes your employee on your contract, and the recruiter's involvement ends at start date apart from a guarantee period. You set the award classification, run the payroll, pay superannuation and carry the dismissal risk.

With a staffing or labour hire agency, the agency employs or engages the worker and supplies them to you. The Fair Work Commission explains the structure plainly: the agency has a contract with the worker and pays them, the agency has a contract with a host firm to supply workers, and the host firm pays the agency rather than the worker. A labour hire worker cannot apply for unfair dismissal against the host firm, but may apply against the agency.

With executive search, the firm is retained, paid in instalments regardless of outcome, and does original mapping rather than working a database. It suits roles where the best candidates are employed and not looking. It is the most expensive of the three and the wrong tool for volume hiring.

Recruitment engagement models used in Australia

  • Contingent: a fee on placement only, usually a percentage of the first-year package, with several agencies often working the same role.
  • Exclusive contingent: still paid on placement, but one agency holds the role for a defined period, which usually improves the work done.
  • Retained: staged fees, used at senior levels and for scarce skills, and the standard model in executive search.
  • Recruitment process outsourcing, where a provider runs all or part of your hiring function for a fixed or per-hire fee.
  • Contract placement, where the recruiter introduces a contractor engaged by you or through the agency, which changes who the employer is.
  • Sourcing only, where you buy a shortlist and run the process yourself, useful where your internal team has capacity but no reach.

A recruitment brief that produces the right shortlist

business.gov.au sets out the sequence: review your current staff structure, create a position description, find candidates, evaluate applications, organise and run interviews, then make an offer. It points out that you should write position descriptions from scratch, because another business's role with the same title may want a completely different person.

The brief a recruiter needs goes beyond the position description: the two or three things the person must be able to do in the first six months, what you will trade off, the salary range you can actually approve, who interviews and when they are available, and the award classification if an award applies. Recruiters lose good candidates to slow scheduling more often than to money.

business.gov.au also notes that the job you advertise must comply with current legislation, including offering at least the minimum pay and conditions and meeting anti-discrimination and equal opportunity requirements. The Fair Work Act separately prohibits advertising employment at a rate of pay that would contravene the Act or a fair work instrument.

Privacy, work rights and record obligations in hiring

Candidate information is personal information. The Office of the Australian Information Commissioner describes the thirteen Australian Privacy Principles as the cornerstone of the privacy framework in the Privacy Act 1988, governing collection, use and disclosure of personal information, governance and accountability, integrity and correction, and individuals' rights to access their own information. A breach of an Australian Privacy Principle is an interference with the privacy of an individual and can lead to regulatory action and penalties.

In practice that means a recruiter should collect only what is needed, tell candidates how their information will be used and who it will be given to, hold it securely, and have a retention position rather than an indefinite database. Ask what happens to unsuccessful candidates' records.

Work rights need checking for non-citizens before employment starts, using the Department of Home Affairs visa entitlement verification service. Agree in the terms of business whether the recruiter performs that check or you do, and keep the evidence either way.

Guarantee periods, replacements and rebates

  • Check whether the guarantee is a free replacement, a pro-rata refund, or a credit against a future placement, since they are very different.
  • Check the length of the guarantee period and what starts it: the start date, not the offer date.
  • Check what voids it, which commonly includes redundancy, restructure, or the role changing materially.
  • Check whether it applies if the candidate is dismissed, and whether it requires you to have followed a fair process.
  • Check whether payment terms require the fee to be paid before the guarantee period ends, which many do.
  • Check the off-limits clause: how long the agency agrees not to approach the person or others in your business.

Disputes that come up with recruiters

Candidate ownership is the most common. Two agencies introduce the same person, or the person had already applied directly six months earlier, and both claim the fee. The fix is procedural: an introduction is only effective if it is made in writing, is acknowledged, and is the first introduction, with a stated period after which it lapses. Keep your own record of direct applicants.

The second is the package base for the fee. Agree whether the percentage applies to base salary, or to base plus superannuation, bonus, car allowance and other components, and whether it is calculated on the offer or on actual first-year earnings.

The third is a mismatch between what the recruiter told the candidate and what the contract says. Hours, flexibility, review timing and bonus eligibility are the usual culprits. Give the recruiter the real terms and ask them to confirm in writing what they represented.

What drives a recruitment fee

  • Whether the engagement is contingent, exclusive or retained, which changes the risk the agency carries.
  • The seniority and scarcity of the skill, and whether the market for it is national or confined to one city.
  • The base used for the percentage: salary alone, or the total package including superannuation and other benefits.
  • Whether the fee is staged or paid in full on start date, and when the invoice falls due.
  • The length and type of the guarantee period, since a longer guarantee is priced in.
  • Volume arrangements, where a committed number of hires changes the rate, and whether the commitment is binding.

Recruiters: frequently asked questions

Who is the employer when I hire through a recruiter?

You are. A recruiter introduces a candidate you then employ directly on your own contract, so the award classification, pay, superannuation, pay slips, record keeping and dismissal risk are all yours from day one. That is different from a labour hire or staffing agency, where the agency employs the worker and supplies them to you, and different again from engaging a contractor. Be clear which arrangement you are buying before the first invoice.

What should recruiter terms of business cover?

The fee and the base it is calculated on, when the invoice is issued and when it falls due, the guarantee period and whether it is a replacement or a refund, what voids the guarantee, how a candidate introduction is recorded and how long it stays effective, the off-limits period, who checks work rights, and how candidate data is handled and retained. Read these before the search starts, because they are rarely negotiated afterwards.

Can a recruiter tell me a candidate's current salary or their health?

Candidate information is personal information under the Privacy Act, and the thirteen Australian Privacy Principles govern how it is collected, used and disclosed. Health information has additional protections. Separately, questions and decisions based on protected attributes raise discrimination and general protections risks. Keep the conversation on what the role requires and what the person can do, and ask your recruiter what consent they obtained before passing anything on.

What happens if the person leaves in the first month?

Whatever the guarantee clause says. Some agreements give a free replacement within a stated period, some a sliding-scale refund, some only a credit against a future placement. Many exclude departures caused by redundancy, restructure or a material change to the role. Read the clause before you sign, and note when payment falls due, because a fee payable well before the guarantee expires shifts the risk back to you.

Can I advertise a role without stating pay?

You can, though the Fair Work Act prohibits advertising employment at a rate of pay that would contravene the Act or a fair work instrument if the employment occurred, and for piecework the advertisement must include any periodic rate of pay the employee would be entitled to. business.gov.au also advises including wage details in the advertisement and notes the job you advertise must comply with current legislation including minimum pay and conditions and anti-discrimination requirements. In a tight Australian market, stating a range usually improves the applicant pool anyway.

Is it better to use several agencies or one?

One, usually, with an exclusivity period. When three agencies work the same role contingently, none of them invests much, all of them rush, and the same candidates arrive three times with an ownership dispute attached. An exclusive arrangement with a defined period and a clear brief generally produces better work. Keep the right to go elsewhere if the period passes without a viable shortlist.

Sources

  1. OAIC - Australian Privacy Principles
  2. business.gov.au - Interview and recruit employees
  3. Fair Work Commission - Who the law protects from unfair dismissal
  4. Fair Work Act 2009 (Cth) - section 536AA on advertising rates of pay

Written by the LokalMatch editorial team. Last reviewed 22 September 2026. How we write and check our guides

What recruiters can help with

Common reasons people and businesses hire recruiters:

What affects the fees recruiters charge

Fees depend on the work involved and how the professional bills. We only publish fee ranges when they’re backed by real LokalMatch data or reliable sources. Until then, here’s what usually changes the fee:

  • Scope and complexity of the work
  • How the firm bills: hourly, per project or on a monthly retainer
  • Experience of the team
  • Timeline and how urgent the work is
  • Ongoing support after the work is delivered

How to compare recruiters before you hire

  • Ask for examples of similar work for clients like you.
  • Read reviews and ask for references you can contact.
  • Make sure the scope, deliverables and timeline are written down before work starts.
  • Ask who will do the work: an in-house team, freelancers or subcontractors.
  • Compare two or three proposals before you decide.

Questions to ask recruiters before you hire

  • Have you done work like this before, and can I see examples?
  • Who will work on this, and who is my main contact?
  • How do you charge: hourly, per project or monthly?
  • What is included, and what costs extra?
  • How long is the contract, and how can either side end it?
  • How will you report on progress?
  • Who owns the work, files and accounts you set up for me?

Licences and registration

This kind of work is often limited to licensed or registered professionals, and the rules depend on where you are. Ask which body they’re registered with, and check their status on that body’s public register before you hire.

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