How much does it cost to hire through a recruitment agency?
If you're thinking about using a recruitment agency, one of the first questions is cost. Recruitment agency fees in the UK depend on the type of hire, the role and the service you choose. This guide explains how fees usually work for permanent, temporary and senior hires, what affects the price and what to ask before you agree terms. We've also included how Bridge & Talent's own fees are structured.
The main ways UK recruitment agencies charge
Permanent recruitment: a percentage of salary
For permanent hires, agencies usually charge a fee based on a percentage of the new employee's first-year basic salary. The fee is normally paid once the candidate starts.
Most permanent recruitment is done on a contingency basis. That means you only pay if you hire a candidate the agency introduced. If you don't hire through them, you don't pay.
Temporary and contract staff: an hourly or daily charge rate
For temporary workers, you pay the agency an agreed hourly or daily charge rate. This usually covers:
- the worker's pay
- statutory costs, such as employer's National Insurance, holiday pay and pension contributions where they apply
- the agency's margin
The agency normally pays the worker and invoices you, often weekly, based on approved timesheets.
Executive search: a retained fee
For senior or hard-to-fill roles, agencies often work on a retained basis. You pay part of the fee up front and the rest at agreed stages, such as when a shortlist is presented and when the candidate is appointed. This pays for a dedicated, in-depth search.
HR consultancy: a day rate or project fee
Some agencies also offer HR support, such as help with job descriptions, interview design or people policies. This is usually charged as a day rate or a fixed project fee agreed in advance.
What affects the cost?
- Salary level: a percentage fee is higher for higher-paid roles.
- How hard the role is to fill: specialist skills or a tight timescale can affect the price.
- Contingency or retained: retained searches involve more dedicated work and are usually priced differently.
- Volume: some agencies agree different terms if you're hiring several people.
- Rebate or replacement terms: what happens if a new starter leaves early.
Hidden costs to watch for
Before you agree terms, check:
- Transfer fees: if you want to take on a temporary worker permanently, there may be a fee. Agencies must offer an alternative, such as an extended hire period, under UK rules.
- Rebate periods: how long it lasts and whether you get a refund or a free replacement.
- Payment terms: how many days you have to pay invoices.
- VAT: whether the fees quoted include or exclude VAT.
How Bridge & Talent's fees work
We agree our terms and fees in writing before we start any work. As a guide:
- Permanent recruitment: a percentage of first-year basic salary, typically 15% to 20%, on a contingency basis, payable on the start date, with an agreed rebate or replacement period.
- Temporary and contract staffing: an agreed hourly or daily charge rate, invoiced weekly.
- Executive search: a retained fee, typically 20% to 25%, paid in three stages: on instruction, on shortlist and on placement.
- HR consultancy: an agreed day rate or fixed project fee.
Our full Terms of Business are available on request. Read the overview on our Terms of Business page.
Questions to ask any recruitment agency
- What exactly is included in the fee?
- Is it contingency or retained?
- When is the fee payable?
- What happens if the new starter leaves in the first few weeks?
- What are the payment terms, and is VAT included?
- How will you find and assess candidates?
- How often will you update us?
A good agency will answer clearly and put everything in writing.
Is using an agency worth the cost?
It depends on your situation. An agency can save you time on advertising, screening and arranging interviews, and can be especially useful when you need temporary cover quickly, a senior hire handled discreetly or help in a sector you don't recruit for often. If you hire rarely and have time to run the process yourself, advertising directly may be enough.
Frequently asked questions
Do candidates pay recruitment agencies?
No. Under UK rules, employment agencies can't charge job seekers a fee for finding them work, with a few narrow exceptions in specific sectors. The employer pays the agency's fee.
When is a permanent recruitment fee paid?
It's usually paid when the candidate starts work, although the exact timing is set out in the terms you agree with the agency.
Can I negotiate recruitment fees?
Often, yes. It's reasonable to discuss fees, especially if you're hiring several people or building a longer-term relationship. Whatever you agree should be confirmed in writing.
What is a rebate period?
It's a period after the start date during which, if the new starter leaves, you may get part of the fee back or a free replacement. The length and terms vary, so check them before you agree.
Hiring in Nottingham or the East Midlands?
Bridge & Talent supports employers across Nottingham, Derby, Leicester, Mansfield and the wider East Midlands with permanent, temporary, executive and HR recruitment. Read about our recruitment process or post a job.