An employment agency is an organization which matches employers to employees. In all developed countries there is a publicly funded employment agency and multiple private businesses which also act as employment agencies.
Since the beginning of the twentieth century, every developed country has created a public employment agency as a way to combat unemployment and help people find work.
In the United Kingdom the first agency was began in London, through the Labour Bureau (London) Act 1902, and subsequently nationwide by the Labour/Liberal government through the Labour Exchanges Act 1909. The present public provider of job search help is called Jobcentre plus.
In the United States, a federal programme of employment services was rolled out in the New Deal. The initial legislation was called the Wagner-Peyser Act of 1933 and more recently job services happen through one-stop centres established by the Workforce Investment Act of 1998.
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 developed by Katharine Felton as a response to the problems brought on by the 1906 San Francisco earthquake and fire.
For most of the twentieth century, private employment agencies were considered quasi illegal entities under international law. The International Labour Organization instead called for the establishment of public employment agencies. To prevent the abusive practices of private agencies, they were either to be fully abolished, or tightly regulated. In most countries they are legal but regulated.
Probably inspired by 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 called for each member to,
"take measures to prohibit the establishment of employment agencies which charge fees or which carry on their business for profit. Where such agencies already exist, it is further recommended that they be permitted 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 of a central authority. Committees, which shall include representatives of employers and workers, shall 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 an ‘opt out’ (Art.2) for members that did not wish to sign up. Agencies were an increasingly entrenched part of the labor 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.
A third-party recruiter can work on one's own or through an agency,and acts as an independent contact between their client companies and the candidates they recruit for a position. 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 permanent or full-time, direct hire positions or contract positions, but occasionally in both. In an executive search assignment, the client hiring company, not the job seeker, pays the search firm its fee.
An executive search firm is a type of employment agency that specializes in recruiting executive personnel for companies in various industries.