Staffing agency vs recruiter vs headhunter: who does what

A staffing agency rents you a hand who stays on the agency's payroll and bills you by the hour. A recruiter (a headhunter is usually the same thing) finds a hand you hire onto your own payroll and charges a one-time fee, most often 20% of first-year pay, per an industry survey. Retained search is a recruiter paid up front for senior roles. A recruiting service runs the ads and screening while you interview and hire. The difference that matters most to an electrical contractor: who owns the hand when the job ends.

01Why contractors mix these up

Most vendors in this space call themselves several of these at once, so it's easy to sign up for one thing and get another. One national electrical contractor started a call with us saying "you guys are more of a staffing agency, if I'm not mistaken," and later said "it just sounds like you guys are more of a marketing agency." Fair questions both. The answer decides who employs the hand, what you pay and whether you keep him. That last part drives most of the cost gap in renting hands vs hiring them direct.

02The four models side by side

Here's how the four models compare on the things a contractor cares about.

A job board is the fifth option, and the cheapest: you write the ad, screen the applicants and do the hiring yourself. More on that, and every other channel, in where to find journeyman electricians to hire.

If you're short-handed now, apply here and we'll see if we can put 5 licensed electricians in front of you in 14 days.

03Staffing agency: you rent the hand

A staffing agency hires the electrician, pays him, carries his comp and sends him to your job. Tradesmen International, a national construction staffing firm, says its craft workers are temporary to the client but "permanent Tradesmen employees," and that it covers "workers' compensation, benefits and other payroll expenditures."

It's a big business. The American Staffing Association counts nearly 2.2 million temporary and contract workers on the job in an average week in 2024, and 36% of staffing employees work in industrial jobs.

You pay a bill rate for every hour he works. Insight Global, another large staffing firm, defines the bill rate as "the total amount a client pays a staffing agency" and the pay rate as "the wage a worker earns." Contractors we talk to report markups of 30 to 40% on the hand's pay. Say an agency pays a journeyman $60 an hour and marks it up 35%: you pay $81, and $21 of every hour goes to the agency's costs and profit. Part of that is real cost (payroll tax, unemployment, comp). The rest is margin. How much is normal is in how much agencies mark up an electrician.

Some agencies offer temp-to-hire: the hand starts on their payroll, and you can hire him after a set number of hours, usually for a conversion fee. That fee often drops as hours go by. Temp-to-hire conversion fees, explained shows how the scale works.

Good for: a short peak, a hand you need Monday, a job too short to justify a hire. Watch for: you don't own the crew, and the agency can move a good hand to a client that pays more.

One more number worth knowing. BLS reports the median annual wage for electricians in employment services (the industry that includes staffing agencies) was $57,760 in May 2025, vs $61,570 for electricians at electrical contractors. BLS doesn't say why, and we won't guess, but it's worth asking any agency what it pays the hands it sends you.

04Recruiter or headhunter: you hire the hand

A recruiter on contingency finds candidates, you interview and hire one onto your payroll, and you pay a single fee only if you hire. "Headhunter" is the everyday word for a recruiter who calls people who already have jobs. For an electrical contractor, it's usually the same deal.

The fee is most often a percent of first-year pay. A staffing fee guide citing a Staffing Industry Analysts survey reports 20% as the most common direct-hire fee, charged by 42% of North American staffing firms, with some published contracts at 25% and 30%. Example: a journeyman at $60 an hour times 2,080 hours is $124,800 a year. A 20% fee is $24,960.

Ask what counts as "first-year pay," because overtime on 6-10s can push a journeyman's year well past his straight-time number, and a fee on gross pay grows with it. Also ask about the guarantee: the same guide reports one large firm offering a 90-day guarantee on permanent placements, and another that replaces rather than refunds if the hire leaves within 12 weeks.

Good for: foremen, superintendents, PMs and hard-to-fill journeymen you want to keep. Watch for: fees on gross pay, short guarantees, and recruiters who later call your own people.

05Retained search: paid to search, not to place

Retained search is a recruiter you pay in stages to run a search, whether or not you end up hiring. The same fee guide reports a retained fee of about one-third of first-year cash pay at one of the largest search firms. Retained search is built for executives: a general manager, a VP of operations, an estimating lead. It's rarely the right tool for a journeyman.

Good for: one senior hire where a wrong pick costs more than the fee. Watch for: paying for a search that doesn't end in a hire.

06Recruiting service: they find, you hire

A recruiting service runs the ads, takes the applications, screens the hands and puts the qualified ones on your calendar. You interview, you decide, and the hand goes on your payroll from day one. Pricing varies by vendor: per hire, per campaign or a monthly fee. Get it in writing either way.

This model works when the problem is reach and screening time, not paperwork. If your foreman can interview but nobody has time to run ads and call back 40 applicants, this is the fit. If you need someone else to carry payroll and comp, it isn't.

Good for: steady direct hiring when you have the work and a foreman to interview. Watch for: vague answers on where candidates come from and how they're screened. Our list of questions to ask a recruiting company before you pay covers the ones that matter.

07Which one fits your problem

Pick the model by how long you need the hand and whether you want to keep him.

1. You need hands Monday for 4 weeks. Staffing agency. Read the agreement first; our staffing agreement checklist covers overtime, per diem and buyouts.
2. You need 6 to 10 journeymen for 3 months or more. Direct hire through a recruiter, a recruiting service or your own ads, especially if you want to keep them for the next job. Run the math first: in the FAQ example below, a $21 agency spread on 50-hour weeks passes a 20% recruiter fee at about 24 weeks. The direct hire is also yours when the job ends.
3. You need one foreman you'll keep for years. Contingency recruiter, with a clear guarantee.
4. You need a general manager. Retained search, or your own industry contacts.
5. You have time to recruit yourself. Job boards, referrals and the supply house. Cheapest, slowest.

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