Recruiting Fees

Recruiting Fees Overview
Often times a company will come to us looking for guidance in regard to what the salary range should for a newly created position. The reason for this is because we have a pulse on the industry and know how much a CEO, CFO, CIO, et al. are paid and they are real numbers. They are not estimated figures; they are real figures gathered from candidates we speak with on a daily basis. As a matter of fact, our application form asks them to define exactly how much they are paid in their current position, and how much they were paid in their previous positions. This way, when our client hires our candidate, it is in accordance with what the market can bear. As a side note, this is another reason to why a company would use a recruiter; we help prevent salary escalation wars between companies....Keep Reading

Contingency Fees
Across the board, the most common fee that a recruiter will charge his client is the “contingency fee”. The advantage for the client to choose this fee is that it is 100% contingent upon the recruiter finding a qualified candidate who is hired by its client. In other words, the recruiter is willing to search for qualified candidates and allow the client to interview them without incurring a fee. However, if the client chooses to hire the recruiter’s candidate, then the client is required to pay the contingency fee at the candidate’s start date. The contingency fee is generally based on a percentage of the first year's annual salary of the hired candidate. Before I go on any further, it is important that I emphasize that the fee is based on the annual salary of the hired candidate. ...Keep Reading

Temp to Hire Fees
The second most common fee is referred to as Temp-to-Hire Fees also know as Contract-to-Hire. Most people understand what I mean when I say Temp-to-Hire. A Temp-to-Hire arrangement is simply where the client chooses to “try before they buy” your candidate. In other words, the candidate is being “rented” from the recruiter to the client. If the client decides that they like the candidate, then the can “purchase” them from the recruiter. There are other situations that may call for a Temp-to-Hire or Contract-to-Hire....Keep Reading

Retainer Fees
Some companies will actually pay you in advance so they can have your complete attention on their search assignment. There are multiple reasons that a company would choose to pay a retainer fee. One of the reasons is because the position may be extremely critical and the client would like you to give 100% of your attention to their job search. The client knows that if they hire the recruiter with a retainer agreement, that the recruiter will be able to move their position to the top of his job orders. Another reason that a client would choose to pay a retainer fee is if the search needs to be confidential. If the client were to hired 5 to 6 contingency recruiters, it is possible that the word would accidentally get out and the position be revealed....Keep Reading

Engagement Fees
If you are unable to get the client to pay a retainer fee, there may be another solution that you can propose before settling on a contingency fee. This fee is called the engagement fee. An engagement fee is similar to a retainer fee, in that we request for 25% of the fee in advance. An engagement search would be more of a priority than a contingency search, but less of a priority than a retainer search. The difference between an engagement fee and a retainer fee is; you are paid 2/3rds of a retainer fee in advance (1/3rd immediately upon the execution of the agreement and the other 1/3rd in 4 weeks); and you will receive 25% of the engagement fee in advance....Keep Reading

Split Fees
Occasionally, you will receive a job order from a client and another recruiter (either working with you or through an association) may have a candidate that matches your client’s job description. At this point, you will need to determine if you would like to share your placement fee with the other recruiter. Obviously, the best situation is to do a split placement with someone you have worked with in the past. However, there are times when you may end up doing a split placement with another recruiting firm, so it is important that you understand the policy and procedures of a split placement....Keep Reading

Outplacement Fees
Occasionally the candidates will ask if they can pay our fees. However, we should never charge the candidates a fee. There are companies who charge fees to candidates, but we are not one of them. These firms are called career development companies and there is a big difference between being a career development coach and a recruiter. As a matter of fact, the average career development fee is substantially less than the average recruiting fee....Keep Reading

Replacement Guarantees
Considering that the average recruiting fee in the U.S. is $15,162, it is not uncommon for the client to want some sort of guarantee on the candidates we place. This topic has always been very controversial in our industry and for good reason to. Some recruiters call this a double guarantee, particularly if the recruiter is working on a contingency basis. The first part of a contingency guarantee is that our client does not have to pay our fee unless we find a candidate who is hired. Some recruiters feel it is unfair for clients ask us to guarantee our candidate will be employed for a certain period of time. However, from the client’s perspective they are not paying just for us to find a qualified candidate, they are paying a fee based on the results the candidate will bring to their company. ...Keep Reading

How much can I make
The answer to your question is…I don't know. However, each time I hire an employee, I request that they invoice $15,000 - $20,000 per month. The reason I set these goals is because I know that they are obtainable. According to an independent research, the average placement fee throughout the U.S. is $15,162. Also, this independent research showed that the average recruiter had 2.5 placements per month....Keep Reading

Time Management
Everyone has heard the old adage to “plan your day, instead of your day planning you.” There is nothing in our profession that is more crucial to consistent and high production than developing the habit of daily planning. The single largest difference between a successful recruiter and a failure is the ability to profitably manage time. The only thing we have to sell is our time and our ability to make contacts during that time. However, because planning and organization are usually not part of human nature, it is necessary to develop a system and discipline to ensure our success. Failure to plan is planning to fail!...Keep Reading