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Legal issues that businesses must know when working with a recruitment agency


Posted by Iris Data Driven Agency

11 months ago

Outsourcing a recruitment agency is a well-known solution favored by many businesses today. Using recruitment solution services helps to keep core business activities. When outsourcing personnel, businesses will get a lot of benefits, such as ensuring progress, high-cost efficiency. However, besides, this kind of HR service also has some disadvantages, especially in legal law that businesses need to consider carefully before deciding to use it. In today’s article, Navigos Search will help you have a clear look at recruitment agency requirements and what you need to know before working with them.

About recruitment agency services

Nowadays, the basic tasks of the human resources department such as recruitment, salary calculation are usually given to the outsourced partners so that the Internal HR team can focus on the tasks and other strategies of businesses.

recruitment agency services

In general, recruitment agency services can include the following services: executive search and selection, conducting specialist recruitment, assistance with the preparation of selection documentation, organize interviews with the shortlisted applicants. 

Why do organizations want to outsource the business process?

The main factors that bring businesses to the decision of outsourcing recruitment solutions can include:

  • Lack of expert or senior resources in some stages of the business cycle
  • The presence of cheaper labor, but does not reduce product quality
  • Businesses can save time to focus on core business activities

Some key points about Recruitment agency services legislation

All recruitment agencies in Vietnam must comply with the government’s labor regulations. Besides internal hiring, in the form of indirect hiring, business owners often outsource to job placement centers, labor subleasing businesses to find suitable candidates. These organizations are usually classified into two types: the introduction of unskilled labor (workers, manual workers, ...), and agencies that introduce senior human resources (CEOs, CFOs, etc.).

recruitment agency services

The recruitment agency fees

In case businesses choose to recruit through recruitment agency services, the employer must pay the employment service fee for recruiting employees to the employment firms in accordance with the law. 

According to the HR solutions that businesses will get a different fee to get a job to replace. There are three main types of recruitment agency fees and these can be broken down into:

  1. Temporary worker fees.
  2. Temp-to-perm fees.
  3. Permanent placement fees.

Having a basic understanding of these costs could help you avoid any potential legal proceedings after you've recruited a candidate. 

recruitment agency services

However, in general, a recruitment agency fee to employers usually ranges from 20% to 25% of a candidate's first annual salary. In some countries, this recruitment fee can be higher up to 30%, especially for C-level and hard business segments, such as IT, financial, etc. 

The main point to remember to successful partnering with a recruitment agency

However, before outsourcing the third parties to handle any part of the work, we need to understand the pros and cons of outsourcing. Although outsourcing recruitment agency services bring many benefits to an organization, this activity can create difficulties if not hiring the right service provider. Before signing the contract to a recruitment agency, regarding these recruitment agency requirements things listed below:

  • Consider the risk of disclosing confidential information: When outsourcing Human Resources, Salary, and Recruitment services, businesses may be exposed to the risk of disclosing confidential information of the company to third parties. Therefore, consider the information provided to outside hiring companies
  • Underground charges: Although most outsourcing offers a price advantage, the implicit costs of signing transboundary contracts can become serious risks. So do not forget to ask the recruitment agency if they have any fee outside the contract.


Knowing enough about recruitment agency requirements and fees helps businesses get out of risk and have a successful recruitment. Our quick guide just gives you a general look at the recruitment outsourcing problems that your company could meet. Please note that our guide should not be taken as legal advice. For further more information, please contact Navigos Search or visit us at the floor 20th, E.Town Central Tower, 11 Doan Van Bo, Town 12, District 4, Ho Chi Minh City, Vietnam.