Hi,
A consultant is an external source for the company to hire/recruit employees. In order to hire employees, usually a company needs to invite candidates for interviews by posting an ad in newspapers, web portals, or any other source. All these sources of recruitment require a lot of time for screening and shortlisting candidates as well as resumes.
Thus, companies prefer to hire an external placement consultant who handles everything on their behalf and ultimately provides a limited number of good choices in terms of shortlisted candidates for a particular position. The company provides this consultant with a job description and job specification for a particular job, based on which the placement consultants interview candidates and present a few selected candidates to the company.
When a candidate is selected by the company, the consultant charges a consultancy/placement fee equal to one to three months' pay of the employee or 8.33% of CTC (in some cases).
These days, companies are outsourcing their manpower to these consultants. For example, a company like XYZ Ltd. has its employees working at its premises, but their salary, PF, ESI, medical benefits, appointment letters, etc., are provided by the external consultant. Companies typically refer to this practice as HR/Manpower outsourcing.
If you have any other questions, please feel free to ask.
Warm regards,
Umesh Chaudhary
welcomeumesh@yahoo.com