What is a fair Recruitment Fee?

One of the big questions when engaging any third party supplier is – How much does this all cost?

There is no secret that recruitment fees are often seen as excessive, however this is usually a result of the way that agencies choose to sell and recruiting companies choose to buy their third party recruitment services. Most assignments are agreed on a contingency, multi agency agreement.

This means that a number of agencies work on a position and the one that successfully fills it, is the one that is able to invoice for the service. In theory you would think that this competition is a good thing. In reality it is a race to the bottom, with quality quickly out of the window and KPIs such as speed of CV send winning the day.

It is not that anyone sets out to do a bad job, it is just a case that in these situations there is not the time to write quality advert copy, create a long list, carry out thorough assessment and therefore present a quality and relevant shortlist of candidates. Agencies working on this basis, will report a fill rate of c 1 in every 4/5 vacancies, with every successful placement in effect compensating for the assignments where no revenue was produced.

If however a recruitment business was to fill every position that they worked on, then it makes sense that their fee could be significantly lower than the standard terms we see in the market today. The traditional contingency model does not allow this to happen and so in our view is no longer fit for purpose.

We endeavour to work exclusively with all of our clients, meaning we benefit from a significantly higher fill rate than average. We also work flexibly, using technology to reduce our operating costs, meaning we are able to pass on these savings to our clients in the form of a highly competitive fee arrangement.

With this in mind, if a recruiting client engages with us exclusively for a period of 14 days then our fee for recruitment services will be reduced to 10% of the annualised salary. This has worked well for us on a number of assignments with success recruiting across the range of commercial functions, and at all levels,  including roles such as CFO, Senior Product Manager, Sales Manager, HR Business Partner, Customer Service and Administration Assistants as well as a number of graduate roles.

Of course we would be more than happy to discuss this with you, however even if you have established relationships, then why not discuss this with your current partners. If more of our colleagues in the recruitment industry start operating like this, then it will be a better place for all of us to do business.

Wouldn’t it be nice for the focus to return back to quality of service and not simply how fast you can email a CV!