How Much Do Recruitment Agencies Charge?

  • December 10, 2020

Recruitment agencies play a vital role in today's business landscape. Not only do they help people find their perfect job, but they also help employers fill vacancies quickly with outstanding candidates. One question many people ask is 'how much do recruitment agencies charge?' One thing that all recruitment agencies will have in common, is that they never charge the candidate. The person who is looking for work through an agency will never have to pay the agency anything, as it is always the employer who is charged.

Of course, any employer who is thinking of using an agency to find staff will still want to know about any charges they could face. Depending on the type of candidate required, clients are usually charged in one of the following ways:

Temporary Staff

Temporary staff are a useful addition for many employers who see seasonal spikes in work or need staff to quickly fill in workforce gaps due to sickness. For temporary staff supplied, the agency would pay the candidate and then charge the client. 

This charge rate normally includes the candidate’s basic pay, NI costs, holiday pay and pension contributions. The agency will also add on a mark-up percentage which means their business makes some profit. This mark-up percentage will usually differ depending on the type of candidate required, the availability of candidates, the location and also the sector.

Permanent Staff

The charges are different for the recruitment of permanent staff and are broadly divided into what is known as contingency fees and retainer fees.

Contingency fees are only charged by the agency once a successful candidate is found and the candidate begins working for the company directly.  Depending on the sector, recruitment companies usually charge anything from 10% to 25% of the candidate's annual salary. In certain roles or sectors, such as executive search, this percentage fee is often higher, with fees of 30% plus not uncommon.  Some companies prefer to work with recruitment agencies on this basis because they do not have to pay anything until after the candidate is found and starts work.

Retainer fees see the client make staggered payments to the agency throughout the whole recruitment process.  Standard charges here include an upfront payment to the agency, a payment when the agency provides a shortlist of candidates and a payment when the candidate is placed into the role. Fees will usually total a percentage of the candidate's annual salary, but are just paid out in smaller chunks to the agency over time. Many companies are happy to commit to retained fees in order to have specialist recruiters commit their resources to fill important roles.

Guarantees And Rebates 

If you are looking to instruct a recruitment company to find your next member of staff, ensure that you offered a guarantee or rebate to cover you should the candidate not work. A guarantee usually involves the recruitment agency agreeing to provide a free replacement if the original candidate does not work out as expected. Whilst a rebate simply triggers a full or partial refund if the candidate leaves within a specified period of time.  

Contact Elizabeth Michael Associates Today

At Elizabeth Michael Associates we provide various options to suit our clients’ different requirements and budgets. Should you be looking for temporary or permanent staff, multiple hires or a single executive appointment, we have solutions, fees structures and guarantees to suit your specific situation. 

If you need more help in understanding recruitment agency fees or are looking for top-class staff, call Elizabeth Michael Associates on 0115 979 9806 today. Having been in business since 1991, we are one of the Midlands’ leading independent recruitment consultancies. If you need a thorough recruitment consultancy you can trust, we are the people to speak to.