Overview of Recruitment Fees
The standard recruiting fee for agencies is between 15% and 20% of the first-year salary for a permanent job the recruiter is filling. Contractual staffing refers to the recruitment of employees for short-term employment contracts as opposed to full-time permanent workers. Most agencies use a percentage based ‘no results – no fee’ pricing model. However, agencies will prorate the expense based on the candidate’s duration of employment.
Understanding Recruitment Fee Models
Permanent Placements
Fees for permanent placements under the contingency, retainer, or container fee structure are calculated as a percentage of the first year base salary of the placed candidate.
Contract Placements
In terms of staffing, an agency will charge a bill rate per hour to provide candidates for the duration of a particular assignment. The bill rate includes multiple factors such as employee pay rate, employer taxes, service fees, and employee benefits.
Types of Recruiter Fees
- Contingency Fees: Organizations only pay a recruiting agency if they successfully place a candidate.
- Retained Assignment: Typically used for senior executive roles or niche positions where headhunting is required.
Determining Recruitment Costs
Several factors affect recruitment costs, including salary level, seniority, and the country’s regulations regarding recruitment fees.
Recruitment Fee Structure
Different fee structures include hourly fees, “temp-to-perm” fees, contingent fees, and retainer fees. These structures vary based on the job type and the seniority or skill level required.
Average Prices and Costs
Recruitment fees typically range from 15-25% of an employee’s first year salary. Understanding the cost per hire for different positions and the average prices for recruiters is essential for budgeting.
Role of Recruiting Agencies
An HR staffing agency matches job seekers with employers, providing services that include screening, interviewing, testing, and managing worker placements in short-term or temp jobs.