Direct placement – also called “personnel placement” – has existed as a service in Germany since about the mid-1990s. This refers to service companies that find suitable applicants on behalf of companies and place them with the company in exclusively permanent employment.
The sector has now been divided into special sections, which can be identified by different names, for example personnel consultancies, personnel agencies, personnel service providers or headhunters. Although all the companies in these sections basically offer the same services, there are subtle differences in their strategic orientation and range. Headhunters working in the field of executive search generally focus on sought-after top executives and often even actively recruit suitable candidates from competitors. A word of caution here: non-competition clauses often play a role in these cases, so that the preferred candidate is unable to move freely between companies or has to be bought out of his or her contract at great expense.
The advantages for employees are obvious: they are actively approached and don’t need to go looking for a job themselves. This saves resources – within the company, too. Most of the time the positions involved are related to special fields, for which suitable employees are not easily found. At the same time these are exclusively permanent positions that are designed for the long term. This form of personnel recruitment is correspondingly cost-intensive for companies: in direct placement most personnel service providers work with a so-called retainer model – a basic fee that is payable even without successful placement. In addition, a percentage of the employee’s gross annual salary (approx. 15-30 %) is charged for successfully filling the position – a not inconsiderable amount, especially for specialists or management positions.
All three terms describe basically the same principle: there is a triangular relationship between a (permanent) employer, an employee and a further company which “leases” the employee for a certain period of time. The employment with the company which leases the employee can be of medium-term duration up to a maximum of 18 months, but may often only be of a short-term nature – such as employment on a weekly basis on construction sites or in the catering trade.
The main difference to classical personnel placement is that the employee remains a permanent employee of the employment agency even when he or she is employed by the client company. He or she has a permanent employment contract with the employment agency. The personnel service provider “lends out” the employee at a fixed hourly or daily rate and invoices the client company for the agreed amounts.
It is advantageous for the employee in that he or she has a fixed employment contract and the associated social security. The ability of the employment agency to issue instructions can be a disadvantage, in that temporary workers usually have no say in their assignment to another company and must carry out whatever work they are given in accordance with their contract.
For companies the employment of temporary workers is a practical method of responding flexibly to economic or other external influences. However, this method is not suitable for every company or every position, as less specialised workers are usually hired out on a temporary basis, although more and more engineers are now also being placed in this way.
A change in personnel deployment can be observed in companies in a number of industries. More and more projects require highly qualified experts to be simultaneously deployed at short notice and for a limited period of time – permanent employment is therefore often not the right approach. At the same time, more and more specialists are moving into self-employment and offer their services as freelancers under a service contract as so-called “interim managers”.
For the freelancers themselves the benefits are also obvious: the project-related freelance work is varied and offers the greatest possible flexibility in terms of location, duration and workload. This opens up completely new perspectives in shaping their career and private life.
In order at short notice to find the right freelancer whose availability and expertise match their requirements, many companies rely on personnel service providers who specialise in the placement of freelance experts – so-called “contracting”.
In contracting there is also a triangular relationship – similar to the provision of temporary workers: the personnel service provider concludes a contract with the freelancer and sells his or her services to the client company. The customer is only invoiced at the agreed hourly rate for the hours which are actually ordered and worked.
Thanks to their large network and their knowledge of the sector, good recruitment organisations can propose suitable candidates within a few hours, so that interviews can take place within a matter of days. Transparency and speed turn out to be the great advantages of this form of placement, while at the same time the company can fill the position with few resources. HERE you can read more about the benefits for companies.
For the consultant the cooperation means one thing above all: it is practical. Suitable new project offers are proactively presented by the personnel service provider, so that the freelancer can fully concentrate on his or her work during the project assignment. You will find an overview of the current vacancies HERE
We are always available for freelance projects in the life science sector – feel free to contact us for questions or specific projects. We look forward to your call on +49 18 90 998 0, or by email using the contact form below: