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How much does a recruitment agency cost?

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Published on 01 May 2021

Are you thinking of enlisting the help of a recruitment agency, but aren’t sure how the fees work? We’re here to help.

In the UK, employers are responsible for all recruiting fees. If you are a job seeker our service is completely free to you, so why not check out our Candidate Zone to find out what our service includes.

Employing new members of staff or engaging temporary workers can be expensive and time consuming. From the actual cost of placing job adverts, to the time spent reading through CV’s and conducting interviews, you may be surprised how much you are spending on your current recruitment process. Plus, with a bad hire at mid-manager level predicted to cost a business more than £132,000* (due to the accumulation of costs relating to training, lost productivity and more) it may be time to consider the help of a professional recruitment service.

How much does a recruitment agency cost?

The job role, type of employment and the service required from the recruitment agency will determine the level of fee you pay. Broadly speaking, there are four types of recruitment service offered by agencies, these are explained in the table below:

Temporary RecruitmentPermanent Recruitment
TempTemp to PermContingencyRetained
Services offered by Recruitment Agencies.
The candidate is paid by the agency. The employer is charged for:
Daily/hourly rate
NI, holiday pay, pension
Margin (I.e service cost and profit)
The margin will depend greatly on job role, location and sector.
Agencies will usually charge a 'transfer fee' to move an existing temporary worker into a permanent role.
The fee can be avoided if an extended period of hire is agreed (the details will be found within the agency's terms).
Agency is paid once the candidate accepts the job.
Recruitment costs are usually 15%-30% of the candidate's first annual salary.
Agency advertising, screening and testing followed by client interview(s).
Unlike the contingency method, this involves a staggered payment process.
An upfront payment guarantees exclusivity, a payment on shortlist delivery follows, and then a final payment is given on successful hire.

Additional free services offered by Berry Recruitment.
Our temporary workers receive exclusive access to health & well-being benefits, via our Hive360 pay portal - at no additional cost to our clients.
In addition to our 'no placement, no fee' agreement, we also offer a very generous 12 week permanent fee rebate scheme - giving you total peace of mind.
We can conduct online and in branch testing and assessment.
Salary bench-marking and legislative advice.

Interested in finding out how a recruitment agency could support your business? Submit a job vacancy and one of our recruitment consultants will contact you to discuss your requirements in more detail.

Temporary Worker Fees

The most important thing to know about temporary workers is that, other than in relation to health and safety, they fall under the responsibility of the recruitment agency. This means that the recruitment agency is responsible for paying the worker, ensuring that NI and pension contributions are made and making candidates aware of their holiday, sickness, maternity or paternity entitlements.

Fees for temporary workers can therefore be broken down into three parts.

The basic pay – hourly or daily rate paid to the worker

Other associated costs (holiday pay, pension, NI contributions)

Margin charged by the recruitment agency (to cover service costs and profit)

How much is the fee percentage?

There is no standard fee percentage, and this will largely depend upon the role you are recruiting for. However our expert consultants will usually be able to give you an estimated cost after one quick phone call, so if you want to find out more, why not contact a member of the team today?

‘Temp to Perm’ Fees

As an employer, you may decide to take on a temporary worker supplied by an agency as a permanent member of staff. As the worker has been introduced by the agency, there will be a ‘transfer fee’ involved.

This is a tried and tested method used by many employers to evaluate staff and can be particularly effective in times of uncertainty.

Permanent placement fees

Contingency recruitment is the most common form of permanent placement. This is where the agency only gets paid once a suitable candidate is accepted for the job – a ‘no placement, no fee’ agreement.

For retained recruitment, on the other hand, the fee is staggered throughout the recruitment process. This option is typically used if an employer is searching for a candidate at executive level or with a niche skill set.

Will I be offered a rebate if the permanent worker leaves?

Agencies are under no obligation to provide compensation if the candidate leaves employment. However, at Berry Recruitment we want to provide total peace of mind to our clients, which is why we offer a generous 12 week rebate period.

Recruitment agencies can be a very cost effective way of trialing and recruiting workers. Naturally, there is a cost involved but a good recruitment agency brings experience, local candidate access and a real understanding of people to the table. People are of course a company’s most valuable assets so however you choose to recruit, please do consider the full potential benefits and the cost of getting it wrong.

*A report from the Recruitment & Employment Confederation (REC) found that a poor hire at mid-manager level with a salary of £42,000 can cost a business more than £132,000 due to the accumulation of costs relating to training, lost productivity and more.