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How Much Do Recruitment Agencies Charge?

How Much Do Recruitment Agencies Charge?

When it comes to partnering with external recruitment providers, you’ve got plenty of choice. During that decision-making process, one of the first questions we’re often asked by employers is “how much do recruitment agencies charge?” It’s a good question, and with so much variation in the market, we’re going to delve into those costs, and compare two different options available to you: traditional recruitment and pay-as-you-go.

Recruitment Costs Explained

Let’s start by looking at the costs associated with traditional recruitment agencies. Although the actual amounts will vary from industry to industry, and the type of role that is being recruited, this will provide a good benchmark to compare against when hiring.

Permanent

A standard, percentage-based recruitment fee is charged to employers, usually 15-30% of a candidate’s remuneration package. While you’ll often find the average fee sitting around the 15% mark, this is highly dependent on the industry and role. For example, a lot of lower-level jobs may attract fees closer to 10%, but at the other end of the spectrum, it’s not uncommon for recruitment agencies to charge up to (and in excess of) 30% for executive placements. In general, this variation comes down to more work being required to recruit at higher levels, however, this isn’t always the case.  To put it into perspective, see the table below and it will give you an idea of the typical recruitment agency fees when hiring on a contingent basis.

Temporary

The candidate is paid by the recruitment agency directly, and employers are then invoiced for the hourly rate in addition to a margin of profit. Although this margin is highly changeable depending on the industry, the below table will show you how it works.

Temp-To-Perm

Recruitment agencies will usually charge a ‘transfer fee’ in temp-to-perm situations. Basically, if you have hired temps through a recruitment agency, you’re likely to be liable to this charge if you wish to bring them on in a permanent capacity after their temporary assignment as completed.

Why Do Traditional Recruitment Agencies Charge So Much?

This is a question that we are often asked and to answer it, we need to look at the model that traditional agencies employ. Take the typical agency fee, for example. Because it’s purely outcome-based (i.e. time is only charged if and when a successful placement is made), recruitment agencies generally employ the philosophy that they have to charge a higher fee, simply because most of their efforts go unrewarded when they only charge on this basis. With this in mind, it’s easy to see why traditional recruiters charge the fees they do.

 Traditional Recruitment versus Pay-As-You-Go Recruitment

Unlike traditional recruitment agencies, pay-as-you-go recruitment is a transparent and flexible approach that ensures you pay only for the services you need. From a complete outsourced recruitment service to selecting just a variety of recruitment tasks, you have full control from start to finish.

Summary

At Harrison McMillan, we think that times need to change (and there certainly shouldn’t be any last-minute surprises with your recruitment costs!). We’ve always been aware of the barriers that organisations face when it comes to engaging recruitment agencies. This mindset is the reason why we built our offering from the flexible, a la carte menu of recruitment and HR services that we are known for.

To discuss our pay-as-you-go recruitment services in more depth, or if you’d like to find out how our recruitment specialists can support your business with the very best talent (without having to pay expensive agency fees),  get in touch with us.

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