By Recruitment Mantra | 10 min read
A manpower supply agency provides workers who stay on the agency's payroll while working at your site, so the agency handles wages, statutory contributions and most employment paperwork. A recruitment consultancy finds and screens candidates who then join your company as your own employees. The first gives you people without adding headcount. The second helps you add headcount. Many manpower hiring agencies in Kolkata offer both, but the contracts, costs and compliance responsibilities are very different.
Key insights
- The payroll decides the model: whoever employs the worker on paper carries most of the obligations.
- Manpower supply suits flexible, volume and project roles: you scale up and down without new permanent hires.
- Recruitment suits permanent roles: you get the right person and employ them yourself.
- Compliance never disappears entirely: the principal employer still carries some responsibility for contract workers.
Before you go
List the roles you are trying to fill and mark each one as "needed for years" or "needed for a season, project or peak". The first group usually belongs with a recruitment consultancy. The second usually suits manpower supply. That single split answers most of the question before you speak to anyone. Business owners often use "manpower agency", "staffing company" and "recruitment consultancy" as if they meant the same thing. They do not. The difference matters for your costs, your headcount, your legal obligations and how much control you keep over the people doing the work. This guide explains what a manpower supply agency does, what a recruitment consultancy does, how the two compare on cost and compliance, and how to decide which one fits each role. It is written for employers comparing a staff and employee hiring and recruitment company in Kolkata for the first time.What is a manpower supply agency?
A manpower supply agency, also called a staffing or contract staffing agency, recruits workers and places them at a client's premises while keeping them on its own payroll. The worker does the client's work, but the agency is the legal employer.How it works
The client tells the agency how many people it needs, for which roles and for how long. The agency recruits, onboards and deploys the workers, pays their wages, deducts and deposits statutory contributions and manages attendance and exits. The client pays the agency the wage cost plus a service margin.Typical roles
Manpower supply is common for roles that fluctuate or are project-based: BPO and call centre staff, warehouse and logistics workers, retail and promoter staff, field sales, housekeeping and facility staff, data entry and back-office processing, and seasonal production work.What the client gains
The client gets workers quickly, can scale numbers up or down with demand, and avoids adding permanent headcount. It also hands most payroll administration and statutory paperwork to the agency.What is a recruitment consultancy?
A recruitment consultancy, also called a recruitment agency or placement consultancy, finds candidates for roles that the client will fill as its own employees. Once a candidate joins, the consultancy's main job is done.How it works
The client shares a job brief. The consultancy sources candidates from its database, networks and direct approaches, screens and interviews them, and presents a shortlist. The client interviews, selects and employs the chosen candidate directly.Typical roles
Recruitment consultancies are used for permanent positions: managers, specialists, technical roles, senior leadership and any role the business expects to keep for years.What the client gains
The client gets access to candidates it could not easily reach, saves time on screening and usually gets a replacement guarantee if the hire leaves early. The new employee belongs fully to the client.| Feature | Manpower supply agency | Recruitment consultancy |
| Legal employer | The agency | The client |
| Worker's payroll | Agency's | Client's |
| Typical roles | Volume, seasonal, project, support | Permanent, specialist, senior |
| Duration | Fixed term or ongoing, flexible | Permanent employment |
| Payment model | Wage cost plus service margin | One-time fee per hire |
| Statutory paperwork | Mostly agency | Client |
How does compliance differ between the two?
Compliance is the biggest practical difference. With a recruitment consultancy, the client is the employer and carries all employer obligations. With manpower supply, the agency carries most of them, but not all.Obligations when you hire through a consultancy
Once the candidate joins, you are the employer. Registration, wages, provident fund, ESI where applicable, leave, gratuity and every other statutory duty sit with you, exactly as for anyone you hired directly.Obligations when you use manpower supply
The agency, as contractor, handles wages and statutory contributions for its workers. But the client, as principal employer, is not fully insulated. Under Indian labour law, a principal employer can be responsible for wages and certain benefits if the contractor fails to provide them. This is why checking an agency's compliance record matters so much.The new labour codes
India's contract labour rules now sit mainly within the Occupational Safety, Health and Working Conditions Code, 2020. According to the Labour Ministry's guidance on the code, a contractor employing 50 or more contract workers needs a single licence, valid for five years, replacing the older system of separate licences for each establishment. The code also requires a single registration for establishments employing ten or more workers.Core and non-core activities
The OSH Code also restricts the use of contract labour in an establishment's core activities, with specified exceptions. Before using manpower supply for a role central to your business, it is worth checking how the rules apply to your sector.| Compliance item | Manpower supply | Recruitment consultancy |
| Wages and salary payments | Agency | Client |
| PF and ESI contributions | Agency, with principal employer oversight | Client |
| Contractor licence | Agency, if 50 or more contract workers | Not applicable |
| Establishment registration | Both, as applicable | Client |
| Liability if obligations are missed | Agency first, principal employer can be liable | Client |
What does each model cost?
The two models are priced differently, so comparing them requires looking at total cost rather than headline rates.Manpower supply pricing
The client pays the worker's gross cost, including wages and statutory contributions, plus a service charge or margin. The margin covers recruitment, payroll processing, compliance, replacements and administration. It is paid monthly for as long as the workers are deployed.Recruitment consultancy pricing
The client pays a one-time fee per successful hire, often calculated as a percentage of the new employee's annual salary. After that, the employee's full cost sits on the client's payroll.Which works out cheaper
For short-term or fluctuating needs, manpower supply is usually cheaper overall, because you avoid permanent obligations and the cost of hiring and exiting staff. For long-term roles, recruitment is usually cheaper, because you pay the fee once rather than a margin every month.Which model should you choose for each role?
Most businesses need both models for different roles. The decision is best made role by role.Choose manpower supply when
- Demand fluctuates: seasonal peaks, campaigns or project work.
- You need volume quickly: tens or hundreds of people within weeks.
- You want to avoid adding headcount: because of budget rules, uncertainty or approval limits.
- You want payroll and compliance handled: for large numbers of support or operational staff.
Choose a recruitment consultancy when
- The role is permanent: you expect the person to stay for years.
- Skills are specialised: technical, professional or leadership roles.
- Culture and continuity matter: the person will build knowledge that stays with the company.
- You want full control: over terms, development and career progression.
| Role example | Suggested model | Reason |
| Festive-season warehouse pickers | Manpower supply | Short, high-volume demand |
| Call centre agents for a new process | Manpower supply | Fast scale-up, payroll handled |
| Finance manager | Recruitment consultancy | Long-term, specialised role |
| Plant head | Recruitment consultancy | Senior, culture-critical role |
| Field sales for a product launch | Manpower supply | Campaign-based need |
Mixing the two
Some businesses start workers on manpower supply and later absorb the best performers onto their own payroll. That approach lets them assess people in the role before making a permanent commitment, provided the contract terms with the agency allow it.How do you choose a manpower or recruitment partner in Kolkata?
Whichever model you choose, the partner's reliability and compliance record matter most.Questions to ask
- Do you provide manpower supply, recruitment or both: understand exactly which model you are buying.
- Who is the legal employer: confirm this in writing.
- Do you hold the required contractor licence and registrations: ask to see them.
- How do you pay PF and ESI, and can we see proof: regular challans protect you as principal employer.
- What are your replacement terms: for both supplied workers and placed candidates.
- Do you charge candidates: a reputable firm never does.