How much do recruitment agencies cost?


How much do recruitment agencies cost?

Posted on 29 May 2024

​Recruitment agencies play a crucial role in connecting businesses with top talent, streamlining the hiring process and ensuring a successful match. The expense and time required for hiring new staff often prompt businesses in all industries across the world to seek specialised recruitment services. At PATH Recruitment, we specialise in delivering permanent staffing solutions tailored to the specialist construction equipment (and related!), offering both contingency and retained recruitment options to provide our clients with flexibility. Let’s delve into the world of recruitment fees and how they impact your hiring decisions:

Contingency Recruitment:

In this model, businesses pay a one-time fee to the agency based on the candidates offered salary. It’s a straightforward arrangement where the agency receives compensation only upon successful placement.

The percentage charged varies, typically falling between 10% and over 20% of the candidate’s salary. Prices will often depend on the job role, the recruitment companies reputation, capabilities and their niche specialist sector. We’ve all heard the sayings, ‘you get what you pay for’ and this is the case when it comes to agencies. Higher fees will likely end up in a reduced overall recruitment costs, due to the significant amount of time and money saved when you discuss the role, receive relevant candidates that have been pre-interviewed, finding and employing high level quality candidates that fit your brief, VS having an agency not understanding your role, sending unsuitable candidates, and possibly employing the wrong person due to lack of choice ... eventually.

Advantages of contingency recruitment: Flexibility, as you pay only when a hire is made.

Considerations: Opting for the cheapest agency may not always be wise; expertise matters.

Retained Recruitment:

Here, the fee is staggered throughout the recruitment process. It includes upfront payment, CV submission, and final placement.

Advantages: Allows for a more collaborative relationship with the agency.

Considerations: Choose an agency that aligns seamlessly with your company culture.

Why invest in an external agency?:

Cost Savings: Partnering with a recruiter saves you the cost of advertising, candidate screening, and administrative tasks.

Expertise: Recruitment agencies specialise in finding the right fit for your industry.

Dispute Prevention: Using a single specialist agency that fills you with confidence minimises disputes over fees when multiple agencies are involved.

Quality Over Price:

Avoid the Cheapest: While cost matters, prioritise experience and industry knowledge. Cheap agencies may lead to high turnover.

Balance: Higher fees don’t always guarantee success. Find an agency that balances expertise and cost-effectiveness.

Remember, recruitment agencies exist for a reason: They have the resources and know-how to unearth top talent, ensuring your business thrives.

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