One of the main concerns and majority of questions associated with outsourcing your business to a recruitment agency is the costs involved.
The cost will have a huge impact on the decision you make and ultimately the recruitment agency you decide to use.
If you are at the stage of thinking about hiring a recruitment agency to assist you with finding you the best people, then you will likely have a lot of questions.
In particular, if this is your first time, you will be very curious to find out how much it costs to hire a recruitment agency.
FACTORS ASSOCIATED WITH RECRUITMENT COSTS
In most cases, this can be difficult to determine unless you contact the recruitment agency directly. Also, the cost of hiring very much depends on multiple factors, including:
- The number of people you are hiring
- The type of position
- The salary for the position
- How involved the agency will be
- The kind of fee you decide upon
WHAT WILL YOU LEARN FROM THIS BLOG?
With all that in mind, I’d like to help you get to grips with what to expect when it comes to the costs of hiring a recruitment agency – what impacts the price going up, and what impacts the price going down, and everything in between.
This blog post will establish agency fees and how much roughly you could be paying an agency for various types of work. After reading this blog post, you find out how much agencies charge for temporary, temporary to permanent and permanent fees, you will want to research recruitment agencies in your region.
We have broken this article into three sections:
1) Percentage fees
2) Terms and conditions
3) Agency fees
Before we get started, we first need to establish the role you are looking to fill. Salary range and locations are more or less considered into the cost too. By using a recruitment agency, it will take the pressure off you by finding the right candidate for your business and will save you the cost of advertising and time involved in pre-screening candidates. Why not check out or blog post and find out why recruitment agencies can benefit your business?
Are you paying too much? All recruitment agencies will work out a percentage of the yearly salary, and this is how much you will be looking to pay. Again, this will vary depending on the role. Let’s take an example;
If you are looking to use a recruitment agency to place a junior position, typically around £9,000-10,000 then you may be charged 10% of the salary, therefore, paying £900-1000.
As the wage increases, the recruitment fee will increase.
From our research, we found that a lot of recruitment agencies typically charge around 13-15% for roles up to £15,000. If you are looking at placing a role with a salary up to £20,000, then you would be seeking to be charged around 17/18%, and anything above the £20,000 salary range can be anything between 22-26%.
Really expensive eh.
TERMS AND CONDITIONS
Terms and conditions will vary, so it is wise that you check out an agencies requirements before agreeing to work with them.
Analysing a recruitment agencies requirements is a good thing to do, especially if you are working with more than one agency as you will still only need to pay a one-off fee.
One little tip from us would always be to let the recruitment agency know if you choose not to work with them.
WHAT ARE AGENCY FEES
In general, agency fees can be split into three areas:
1) Temporary fees
2) Temporary to permanent fees
3) Permanent fees
If you are looking to enter into a long-term contract with an agency, it is critical to clarify the fee structure before making any commitment. Let’s take a look at the different types of fees mentioned above:
The fee for a temporary worker is made up of their salary plus a percentage. The rate you will pay an agency for a temporary employee will depend on upon the industry and job role you are looking to fill. For example, in the construction sector, a labourer’s fee will vary from a joiners fee and the location will be considered too. A rate for a labourer in Fife compared to London will be different.
Temporary to permanent fees
When an agency supplies you with a temporary worker and after the temporary contract is complete, you may want to keep them on permanent. The recruitment agency is entitled to charge a temporary to the permanent fee, which is designed to cover the loss of that worker’s value. This fee will vary. Therefore you will need to make sure you ask the agency what is involved.
If you are looking to place candidates on a continuous role, then the agency will charge you a fixed fee on behalf of placing the candidate. Like the other costs, these will vary so you need to make sure that you thoroughly read agencies terms and conditions before agreeing to any form of offer.
Can recruitment agencies negotiate a fee?
All recruitment agencies rates will be different as explained. However, many recruitment agencies will negotiate a fee depending on the engagement. We find that if you have a substantial amount of work to be done which can be guaranteed, then you are more likely to negotiate a fee fairly well. According to the Recruitment and Employment Confederation, the average recruitment cost of filling a vacancy in the UK is £3,950.
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