Recruitment agencies get paid by the employer, not the candidate. Agencies charge employers in two ways: percentages or contracts. On average, percentages range between 15-25% of what the newly hired employee makes in their first year. Contracts pay a retainer fee throughout the hiring process. Additional services like background checks allow agencies to make more money.
Legalities and Payment Structures
Employers pay recruiting costs. Charging candidates is illegal. How much employers pay varies based on the fee percentage agreed upon. The type of role and industry impacts fees too.
Benefits for Candidates and Employers
Signing with an agency gives candidates access to unadvertised jobs. Agencies act as middlemen, working for employers to fill vacancies. The agency only gets paid if they find suitable candidates. The fee charged is a percentage of the new hire’s starting salary.
Most recruiters earn commission, a fee based on candidates’ first-year salary when hired. This incentivizes recruiters to find strong candidates. Different bonuses reward top-performing recruiters.
The RPO model provides a consistent revenue source for the agency, fostering a long-term partnership with the client.
Do Recruiters Take a Cut of Your Salary?
Recruitment agencies are compensated by employers, not by candidates. Agencies typically charge a percentage of the new hire’s first year salary or work on a contract basis, providing services for a retainer fee. It is illegal to charge candidates for recruitment services, and fees can vary depending on the agreed percentage, as well as the role and industry.