An employment agency is usually an organization which fits employers to employees. In every developed countries there is a publicly funded employment agency and multiple private businesses that also act as employment agencies.
Public Employment Agencies
One of the oldest references to a public employment agency was in 1650, when Henry Robinson proposed an “Office of Addresses and Encounters” that is going to link employers to workers. The British Parliament rejected the proposal, but he himself opened such a business, although it was short-lived.
Since the beginning of the last century, every developed country has established a public employment agency as a way to combat unemployment and help people discover work.
In the United Kingdom the very first agency began in London, through the Labour Bureau (London) Act 1902, and subsequently nationwide because of the Liberal government through the Labour Exchanges Act 1909. The present public provider of job search help is called Jobcentre plus.
In America, a federal programme of employment services was rolled out in the New Deal. The initial legislation was known as the Wagner-Peyser Act of 1933 and more recently job services happen through one-stop centres established by the Workforce Investment Act of 1998.
Private Employment Agencies
The first private employment agency in the United States was opened by Fred Winslow who opened Engineering Agency in 1893. It later became part of General Employment Enterprises who also owned Businessmen’s Clearing House (est. 1902). Another of the oldest agencies was created by Katharine Felton as a response to the difficulties brought on by the 1906 San Francisco earthquake and fire.
Many temporary agencies specialize in a specific profession or field of business, such as accounting, health care, technical, or secretarial.
For the majority of of the twentieth century, private job agencies have been considered quasi illegal entities under international law. The International Labour Organization instead called for the establishment of public employment agencies. To avoid the abusive practices of personal agencies, they were with the idea to be fully abolished, or tightly regulated. Generally in most countries they are legal but regulated.
Probably inspired from the dissenting judgments in a US Supreme Court case called Adams v. Tanner, the International Labour Organization’s first ever Recommendation was targeted at fee charging agencies. The Unemployment Recommendation, 1919 (No.1), Art. 1 required each member to,
“Take measures to prohibit the establishment of employment agencies which charge fees or which continue on their business for profit. Where such agencies already exist, it really is further recommended that they be allowed to operate only under government licenses, and that all practicable measures be taken to abolish such agencies as soon as possible.”
The Unemployment Convention, 1919, Art. 2 instead required the alternative of,
“A system of free public employment agencies under the control over a central authority. Committees, which shall include representatives of employers and workers, will likely be appointed to advise on matters concerning the carrying on of these agencies.”
In 1933 the Fee-Charging Employment Agencies Convention (No.34) formally called for abolition. The exception was if the agencies were licensed and a fee scale was agreed in advance. In 1949 a new revised Convention (No.96) was produced. This kept the same scheme, but secured opt (Art.2) for members that did not wish to sign up. Agencies were an increasingly entrenched part of the labour market. The United States did not sign up to the Conventions. The latest Convention, the Private Employment Agencies Convention, 1997 (No.181) takes a much softer stance and calls merely for regulation.
In most countries, agencies are regulated, for instance in the UK under the Employment Agencies Act 1973, or in Germany under the Arbeitnehmer (Employee Hiring Law of 1972).
An executive-search firm is a type of employment agency that specializes in recruiting executive personnel for companies in various industries. This term may apply to job-search-consulting firms who charge job candidates a fee and who specialize in mid-to-upper-level executives. In the United States, some states require job-search-consulting firms to be licensed as employment agencies.
Some third-party recruiters work on their own, while others operate through an agency, acting as direct contacts between client companies and the job candidates they recruit. They can specialize in client relationships only (sales or business development), in finding candidates (recruiting or sourcing), or in both areas. Most recruiters tend to specialize in either permanent, full-time, direct-hire positions, or in contract positions, but occasionally in both. In an executive-search assignment, the employee-gaining client company and not the person being hired and pays the search firm its fee.
An executive agent is a type of agency that represents executives seeking senior executive positions which are often unadvertised. In the United Kingdom, almost all positions up to 125,000 ($199,000) a year are advertised and 50% of vacancies paying 125,000 to 150,000 are advertised. However 5% of positions which pay more than 150,000 (with the exception of the public sector) are advertised and are often in the domain of around 4,000 executive recruiters in the United Kingdom. Often such roles are unadvertised to maintain stakeholder confidence and to overcome internal uncertainties. The executive agent would identify the various head-hunters or recruiters who have been given the brief in seeking a candidate. A senior executive would typically pay the agent a fee in a similar fashion to an actor paying a talent agent. Whilst the Employment Agencies Act 1973 prohibited employment agencies charging, in November 2008, there was a European amendment to (c. 35), in section 9 (inspection), subsection (4), of the act.