May 9, 2018 TruPath

How much do staffing agencies cost? Top 5 factors that go into pricing.

Often, one of the first questions that a potential client asks is – How much do you charge? Sometimes, this question comes before the agency knows what role the client is looking to fill. So, because it’s top of mind, let’s talk about pricing!

How Much___ (1)

Spoiler alert 🚨🚨, you aren’t going to get an exact price here (although TruPath is transparent about its recruiting fees). The reason being – agencies have different fee structures. And, the market is always changing. But, you will learn what goes into pricing. In addition, this pricing topic is reserved for direct placement job searches. Contract recruitment pricing is structured differently. CLICK HERE to learn about the difference between the twoIn general, the direct placement fee range is 22-33% of a candidate’s first year annual salary. Let’s talk about how that is determined.

Top 5 factors that go into direct placement pricing:

1. Contingent vs Retained

With a contingent search, you do not owe payment until the agency finds you the right candidate and that individual starts. Usually payment is due immediately upon start date. With a retained search, you pay partial payment to execute the search and the remainder upon the candidate’s start date. Retained searches generally come with higher fees as they are “priority” searches. They receive priority because partial payment has already been received.

2. Level of Role

Often, higher level roles will carry higher fees. Generally, senior level roles take longer to fill, so recruiters spend significantly more time searching and screening. Don’t let that scare you! Many senior level candidates are currently working, so recruiters are tapping into the passive candidate pool. It takes longer to recruit candidates who are not looking for a new opportunity. Recruiters spend even more time getting to know passive candidates and courting them if the role is the right fit.

3. Difficulty to Fill

Frankly, some positions are easy to fill. Others are hard! The more niche the position, fewer candidates will be available who meet the requirements. Hence, the harder the search to identify these candidates. Not to mention, candidates in these roles are usually working. They don’t often take a new opportunity unless there is a significant upside. Recruiters spend their time understanding what the candidates value most to see if a new opportunity will offer that upside.

4. Quantity

The number of positions matters. If you are partnering with an agency for the first time, you will get a fair rate on one role. If you are partnering and asking for help on several roles, most likely, you will get a great rate! Especially, if you are asking for multiple of the same role. In this case, recruiters are executing one search looking for similar people. It requires less work than multiple searches for different roles. 

5. Relationship

People love doing business with people they value and trust. It reflects in loyalty. Many agencies may discount pricing for loyal customers who are good partners. Good partnership usually reflects in clients who pay on time, have prompt communication, provide timely feedback, and treat the recruiting process with respect. Why wouldn’t you go back to the agency who keeps filling your roles?!

Are you looking for more information in regards to direct placement or contract hiring? TruPath has been partnering with clients to provide both services for over 15 years! We would love to talk to you further about your hiring needs.