Recruitment glossary: key terms from A to Z

A

Activation and placement voucher (AVGS)

Voucher from the German employment agency that pays for private placement: €2,500 per successful placement, up to €3,000 for long-term unemployed people and people with disabilities (Section 45 SGB III).

Active sourcing

Approaching suitable candidates directly, for example via LinkedIn or XING, instead of waiting for applications. This lets recruiters reach people who are not actively looking.

Anonymous job posting

A job ad without the company name, for example when a replacement must stay confidential or competitors should not learn about the search.

AÜG permit

Permit from the Federal Employment Agency for temporary staffing. It is first valid for one year; after three years a permanent permit is possible (Section 2 AÜG).

AZAV

German ordinance on accreditation and approval in employment promotion. Recruiters are approved under it by an accredited body so they can bill placement vouchers.

B

Bill rate

Hourly rate a staffing agency charges the client for an assigned worker. It is well above the hourly wage because it includes employer costs, downtime, overhead and profit.

C

Calculation factor

Ratio of the bill rate to the hourly wage in temporary staffing. It covers employer costs, downtime, overhead and profit and is often around 1.8 to 2.2.

Candidate profile

Anonymised summary of a candidate with experience, qualifications and salary expectations – without name and contact details.

D

Direct placement

The recruiter presents candidates and the company hires them directly. Usually a one-off fee is paid on success.

E

Equal pay

Temporary workers are in principle paid the same as comparable permanent staff (Section 8 AÜG). A collective agreement may usually deviate for nine months, up to 15 months with sector surcharges.

Exclusive mandate

Only one recruiter searches for a position. This can pay off if they search particularly intensively in return; without exclusivity, several recruiters reach more candidates.

Executive search

Targeted search for executives through direct approach, usually by consultants with a fixed fee paid in instalments.

H

Headhunter

Colloquial term for recruiters and consultants who approach candidates directly, especially specialists and executives.

J

Job requirements profile

Description of what a person must bring to the role and what is desirable. The basis of every search mandate.

M

Maximum assignment period

The same person may be assigned to the same client for at most 18 consecutive months, unless a collective agreement provides otherwise (Section 1(1b) AÜG).

Minimum wage

Statutory wage floor in Germany: €13.90 per hour since 1 January 2026, €14.60 from 1 January 2027. In temporary staffing, the collectively agreed wage is higher.

P

Placement agreement

Agreement between company and recruiter on fee, due date, replacement, protection period and exclusivity. Putting it in writing is strongly recommended.

Protection period

Period during which the fee is still due if you hire a presented person later or through another channel. Six to twelve months is common.

R

Recruiting channels

Ways companies find staff: job boards, careers page, referrals, social networks, recruiters and temporary staffing.

Recruitment agency work

A recruiter presents suitable candidates to a company, which hires them directly. Since 2002, a trade registration has been enough for private placement in Germany.

Recruitment consultancy

Handles the entire search with market analysis, direct approach and selection, usually for leadership and key positions. Often paid as a fixed fee in instalments, even without a hire.

Replacement guarantee

The recruiter's promise to find a replacement without a new fee or refund part of it if the placed person leaves during probation. Probation lasts at most six months.

Retainer

A fixed fee for a search, usually in instalments: part at the start, more at milestones and on hiring. It is due even if nobody is hired.

S

Search mandate

An assignment for a recruiter to fill a specific position – with a briefing on tasks, requirements, salary and terms.

Sector surcharge

Surcharge on the collectively agreed wage of temporary workers in certain client sectors, such as metal and electrical. It rises with the length of the assignment.

Staffing provider

Umbrella term for companies that place or assign staff – that is, recruitment agencies and temporary staffing firms.

Success fee

A fee due only when a hire is made. In recruitment, 20 to 35% of the first annual gross salary is common.

T

Taking over a temporary worker

The company hires an assigned worker permanently. The staffing agency may not prohibit this, but may charge a reasonable placement fee if agreed (Section 9(1) no. 3 AÜG).

Temporary staffing (Arbeitnehmerüberlassung)

A staffing agency employs the worker itself and assigns them to a company for an hourly rate. It needs a permit under Section 1 AÜG.

Temporary staffing collective agreement (GVP/DGB)

Collective agreement for temporary workers. Pay group 1 has been €15.33 per hour since 1 September 2026 and will be €15.87 from 1 April 2027.

Time to hire

Time from approving a position to a candidate's acceptance. The longer it takes, the higher the vacancy costs.

V

Vacancy costs

The cost of an unfilled position: lost revenue, overtime and extra work for the team. Roughly calculated from annual salary, working days and a vacancy factor.