Different Types of Recruitment Agency Fee Structures

January 31, 2023

Recruiting agencies charge fees for their services, which vary depending on the type of recruitment and the level of service provided. Here are some of the standard fees that recruiting agencies charge:

  1. Contingency fee: This is a fee that is charged as a percentage of the candidate's first-year salary. The fee is only charged if the agency successfully places a candidate with the employer. The percentage varies depending on the industry and the level of the position but typically ranges from 15% to 25% of the candidate's first-year salary.
  2. Retained fee: This fee is charged upfront and is non-refundable. The agency works exclusively with the employer to fill a specific position and charges a fixed percentage of the candidate's first-year salary. Retained fees are usually charged for executive-level positions and can range from 20% to 35% of the candidate's first-year salary.
  3. Flat fee: This is a fixed fee that is charged for a specific recruitment project or for a set number of candidates. The flat fee can vary depending on the level of the position and the complexity of the recruitment project.
  4. Hourly fee: Some recruiting agencies charge an hourly fee for their services, which is typically used for consulting or advisory services related to recruitment or human resources.

It is important to note that the fees charged by recruiting agencies may vary depending on the location, the type of recruitment, and the agency's level of expertise. 

The most common fee structure for recruitment agencies is the contingency fee. Contingency fees are based on a percentage of the candidate's first-year salary and are only charged if the agency successfully places a candidate with the employer.

This fee structure is popular because it minimizes the risk for employers. They do not have to pay anything upfront and only pay the fee if the agency successfully finds and places a suitable candidate. For recruitment agencies, this fee structure provides an incentive to work quickly and effectively to fill the position since they only get paid if they are successful. The fee percentage may be higher for executive-level positions or for highly specialized industries where there is a limited pool of qualified candidates.

Here are a few examples of Canadian-based recruitment companies and their fee structures:

  1. Robert Half: Robert Half is a global staffing firm with offices throughout Canada. They offer both temporary and full-time staffing solutions for a variety of industries. Their fee structure for full-time placements is typically a contingency fee based on a percentage of the candidate's first-year salary. The fee percentage varies based on the level of the position and the industry, but it typically ranges from 15% to 25% of the candidate's first-year salary.
  2. Hays: Hays is a global recruitment firm with offices throughout Canada. They specialize in recruiting for a variety of industries, including construction, engineering, finance, and IT. Their fee structure for full-time placements is typically a contingency fee based on a percentage of the candidate's first-year salary. The fee percentage varies based on the level of the position and the industry, but it typically ranges from 18% to 20% of the candidate's first-year salary.
  3. Randstad: Randstad is a global staffing and recruitment firm with offices throughout Canada. They offer staffing solutions for a variety of industries, including finance, IT, and engineering. Their fee structure for full-time placements is typically a contingency fee based on a percentage of the candidate's first-year salary. The fee percentage varies based on the level of the position and the industry, but it typically ranges from 15% to 25% of the candidate's first-year salary.
  4. Aerotek: Aerotek is a staffing and recruitment firm with offices throughout Canada. They specialize in recruiting for a variety of industries, including engineering, IT, and skilled trades. Their fee structure for full-time placements is typically a contingency fee based on a percentage of the candidate's first-year salary. The fee percentage varies based on the level of the position and the industry, but it typically ranges from 18% to 22% of the candidate's first-year salary.

It is important to note that these fee structures are general guidelines and may vary based on the specific needs and requirements of each recruitment project. It is always recommended to discuss fees and associated costs with the recruitment agency upfront to ensure that both parties are clear about the terms and conditions of the agreement.

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