How to tell the difference between an Agency Recruiter and an Inhouse Recruiter

If you have ever applied for a job, created a LinkedIn, or uploaded your resume to sites like Indeed then you have probably encountered a recruiter. Many people do not know that there are different types of recruiters, and no I am not talking about military recruiters v corporate, I mean within the business world there are different types of recruiters.

The two main types of recruiters are Agency Recruiters and Corporate Inhouse Recruiters. Let’s break down both.

Agency Recruiter

Agency recruiters are “for profit”, meaning that they make their money off of finders fees and commissions from their client. Sometimes this is a fee that the client pays the agency that is a % of the base salary that the candidate hired from the agency accepts. Sometimes it is via hourly wages, meaning, the agency will charge the client $100 per hour and then pay the employee say $70 per hour. That leaves $30 per hour gross profit that the agency makes off of the candidate. This is because the contractor is paid through the vendor and is on their payroll, so the agency charges the client and then pays the employee. Now this may sound shady, and sometimes it is which is why finding the right and reputable agency is so important, but this is how a recruiting agency makes it money to keep the lights on. This allows the agency to not have to charge the candidate for their services, rather they over charge the large client with the money to spend. With this in mind, agency recruiters do often have more money to give to candidates but won’t disclose this because that is how they make their money to feed their families. So be prepared to negotiate.

Agency recruiters are also more “aggressive”, meaning they will hunt you or follow up more. This is because as the graphic above shows, there are over 12,000 recruiting agencies in the US alone so the competition is real. Sometimes agency recruiters are even competing against their peers to fill a job faster especially when the market is rough like it is today.

The easiest way to tell if a recruiter is through an agency is via their contact information. If their email is from a large company domain, usually they are inhouse. Do your research via LinkedIn to see if the company they represent is a recruiting firm or if it is maybe just a small company you haven’t heard of. Also, most agency recruiters refer to themselves as recruiters whereas inhouse is Talent Acquisition.

Agency recruiters are great for those who are in tech as working as a contractor usually pays a bit more in the field of IT. There are of course executive search firms and other firms that support professionals in creative fields as well as business, but the folks who benefit the most from agency recruiters are those who are looking for temp or contract work. Vendors do sometimes support full-time recruitment for companies who have tough-to-fill roles or need a highly specialized skill set. Sometimes even starting out as a contractor through an agency at your dream company can lead to full-time employment. So agency recruiters do add a lot of value in the market but just do your research and you should NEVER pay a recruiter from your own pocket.

In-house Recruiter

In-house recruiters work directly for a company and are a part of a Human Resources department. In most cases, the in-house recruiters are their own “Talent Acquisition” team under the HR umbrella but in some cases, especially in smaller companies, an HR Generalist can be responsible for recruitment along with other HR duties. In either case, Talent Acquisition or TA is generally the term used to describe in-house recruitment. Talent acquisition partners are the first line of defense and responsible for conducting first round interviews to make sure that all qualifications are met before proceeding to a hiring manager interview. TA is never a for-profit entity. These employees are generally paid by their company to do this work and do not get paid finders fees like the agency side. TA is more strategic and are a partner to the hiring team that is responsible for finding talent that will stay and grow in a company for a long time.

In-house recruiters usually have a strict budget for salary that they can offer to a candidate. This budget is given to them by their HR business partners and compensation teams. For this reason, ALWAYS be honest with your salary expectations. It might disqualify you for a certain role and there is advice out there that says to not do this – but ask yourself this question, if you are already making $100k a year and are looking for a pay increase in your next role (lets say you ideally want $120k), you tell a recruiter you would like to share your salary at the end, the recruiter knows the max they can pay for the role being discussed is $95k and you find this out at the end because you avoided the compensation conversation – are you going to be happy?

TA is not out to trick you, they are here to help and to make sure the person who receives an offer for a role is going to again stay long term. You can ask them what their budget is and sometimes there is wiggle room (usually no more than $5k-$10k than what they share is their budget) but if you ask for their budget you should always confirm if that is ok for you. Do not expect a company to “make an exception” for you and pay above their budget. Also NEVER say that you are ok with a range in the beginning and then at point of offer you ask for an insane amount of money more. Be reasonable – $15k+ more than what was discussed is not reasonable. Most good companies go through months of analysis and surveying to create these budgets for each level job. A good in-house recruiter will advise you or direct you to the correct level role based on compensation. They will also use this information to play “matchmaker” – meaning, if they get a new role that fits your skills and compensation range they will reach out to you directly and see if you are interested. TA is responsible for managing these types of candidate pipelines.

The other piece of an in-house recruiter’s job is to create and maintain a company’s Employer Value Proposition. This is generally the boiled-down reasons employees like working at a company – or the company’s culture. Now TA does not create the culture, but they give it a platform and are responsible for sharing this with candidates during phone screens, at career fairs, and also on platforms like LinkedIn. It is a promise to employees and future employees. This is also why an in-house recruiter might ask you “why do you want to work here?”- they are trying to see if what you are interested in is what the company can offer you. They will also really like a strong elevator pitch on who you are as a candidate because here again, an in-house recruiter wants you to stay long term and be happy – they understand you are interviewing them just as much as they are interviewing you.


Both types of recruiters have their pros and cons. When navigating the job landscape, it is important to know the different types of recruiters you may encounter so you can tailor your interview prep accordingly.

Agency recruiters usually are looking for someone with technical skills and want a quick fill given the volume of work they handle. Agency recruiters might work with 5+ companies at any given time on a large amount of openings.

In-house recruiters want to know more about you – they want to know what you are looking for, what is going to make you happy, and make sure that aligns with their company’s culture.

You can always negotiate with either type of recruiter, but be reasonable when dealing with in-house as they have stricter budgets and ranges based on the level of role, degree requirements, and how technical the role is. Agency recruiters usually have more money to give because they are making a profit off of you.

You can generally trust in-house recruiters right from the very beginning because they represent their company and will have branding/email tied to their company. Agency recruiters are the ones who might be a bit untrustworthy because it is harder to tell if they are legit. With this being said, there are plenty of reputable recruiting agencies that you can work with and not have reason to worry – but do your research always and if an agency ever asks you to pay them this is a major red flag.

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