July 2, 2023

Who to choose for remote hiring: a freelance recruiter or a recruiting agency?


There is a common opinion that hiring staff is cheaper than external performers. Maybe. But business should be profitable, not cheap.

You urgently need candidates for rare IT positions. And here, a puzzling question arises: where to turn, to a recruiting agency or a freelancer? What is more profitable? Let us figure it out.

Who is an IT recruiter-freelancer?

This IT job recruiter works alone and independently closes vacancies for different employers, often having several customers simultaneously. When the customer’s conditions are met, they receive the entire fee themselves. On the other hand, all the risks in work are also only on the freelance recruiter alone.


As a rule, this is a narrow-profile IT recruiter who feels like a fish in water in a specific narrow area of employment. These days, they usually deal with remote hiring.

What are IT recruitment agencies?

Recruitment agencies are intermediaries in the labor market, organizations that provide employers with services for the search and selection of personnel and provide job seekers with benefits for the job search and employment and other related services.


A recruiting agency has several IT recruiters on its staff who can work as narrowly focused specialists and broad-based ones, depending on the needs of the recruitment company and a specific recruitment project.

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Comparative analysis of recruiters and recruiting agencies

I propose to conduct a comparative analysis and see who will appear more preferable in the end.


Every business requires external HR support at one time or another or regularly. A small business requires it because a full-time employee is not needed on the staff for rare tasks. Large companies require it to reduce their own HR department load during peak hiring periods.


And it is not always enough to post a job and wait for the weather by the sea. This is where the dilemma mentioned above appears again: who is more effective, an agency or a freelancer.


So, let us look at both possibilities regarding the key factors in any recruitment project: time, money, and results.


Recruitment rate


It is probably better to use the help of a freelancer who specializes in a particular field and is literally friends with the tops in the desired professional niche to search for a “rare star" quickly.


On the other hand, there is such a recruiter in the agency, too. In addition, if the client needs a few specialists at once, which happens more frequently, they will have to look for one more recruiter for this task.


So, from this point of view, it looks better to work with an agency specializing in several professional areas.


Plus, guarantees are also essential for speed, so that if an employee does not remain in the company for long, they will be quickly replaced by another one. Good recruitment companies usually give such guarantees. With freelancers, by experience, it depends.


Document flow and calculations


This is exactly the weak point in cooperation with freelancers. Most of them are not registered as Ltd, and the tax regime for the self-employed is free. Furthermore, not all freelancers adhere to it. So, in practice, hiring a freelancer without the Ltd status often means either working without a contract and so-called black payment or white payment under a warranty or paid services.


In the first case, the employer bears legal risks. In the second case, the employer will have to pay taxes, pension contributions, and health insurance contributions from the freelancer’s remuneration, which increases, of course, and submit relevant reports.


With recruiter agencies, everything is more manageable. They are registered as legal entities and have a well-functioning system of trade and settlements. Plus, the total price is fixed in the contract, which includes all the expenses.


In addition, another disadvantage of working with a freelancer is that they often ask for an advance payment, and the employer does not know what they will get in the end and when.




The classic “Achilles heel” of working with freelancers in any field is the risk of missed deadlines, sudden project abandonment, or disappearance without explanation.


And here, again, recruitment agencies have an advantage: the recruiter that cannot cope will simply be replaced by another.


In addition, when hiring a freelancer, you are hiring a pig in a poke because it is tough to assess the professional skills of a private specialist without having worked with them. And everyone knows that you can write anything about yourself on your page. So, employers risk losing time and money by making the wrong choice.


However, recruiting agencies have a reputation in the market that they value.


Finally, in any controversial situation, the employer has practically no leverage on the freelancer.


And when you deal with the agency, if you are dissatisfied with the recruiter, you communicate with the management, which already becomes their headache. They can replace the recruiter or solve the issue in any other way. Anyway, the contractor’s problem will be solved in their favor.


Then what is the conclusion: who to choose?

Naturally, there are always pros and cons. And you always want to save money. But if you also want to have some guarantees of what you will get in the end, choose not what is cheaper but more profitable.