For permanent recruitment, most agencies working on a contingency basis (rather than on a retained basis). This means they will only charge a placement fee once they have successfully found the right candidate and the person has started work. This fee should always be agreed upon upfront, before any services are provided.
While some agencies charge a fixed fee, it’s more common for the cost to be a percentage of the candidate’s starting salary (typically between 15% and 25%). The exact percentage can be influenced by factors such as:
- Level of the role
- Industry sector
- Skills or experience required
- Location
- Lead time to hire
- Market conditions (candidate-driven vs. client-driven)
- Volume of business
- Commitment to the agency ie: working on a sole agency or prefered supplier basis
Points to be aware of:
- In a candidate-driven market, where skills are in short supply, fees may be higher.
- If you try to negotiate too hard on the percentage, this may affect the level of service and limit post-placement guarantees.
For temporary recruitment, agencies (or more technically, employment businesses) normally charge an agreed hourly rate. This rate is usually all-inclusive and covers the temp’s pay, National Insurance, holiday pay, pension, administration, and the agency’s margin. Temporary staff are billed in arrears, usually weekly, based on approved timesheets.
Agencies may also offer other fee structures. These could be daily rates, temp-to-perm fees, fixed-term contract fees, or fixed fees. Whatever the arrangement, reputable agencies will ensure costs are transparent and agreed before work begins.
At The Recruitment Consultancy, we offer Surrey and Sussex employers clear, upfront pricing for all recruitment types. To find out more, do get in contact and we’d be very happy to explain how these structures work, depending on your recruitment needs.
