The fees charged by recruiters generally vary based on the company.
When considering fee models for permanent placement and contract, freelance, and staffing candidates, it is important to keep this in mind.
Staffing recruiters are rarely called headhunters.
If you hire a sales headhunter, you’re looking for someone who can find a long-term, full-time employee.
There are headhunters who work for organizations looking for high-level talent, generally at the director or above level.
Fee Model for Initial Session
As part of an offer letter, headhunter fees are always negotiated based on the candidate’s first-year salary.
If the headhunter includes a sign-on bonus or any other compensation in the first year, then the salary for that first year will also be included.
Sales commissions and bonuses are typically not included in the first year’s compensation.
There is usually only one bonus included in the recruiter’s fee — the sign-on bonus.
Relocation expenses are not included in the calculation.
Recurring Fee Schedule
Headhunters charge fees based on the salary of the first year in the job.
Accordingly, if a Director of Marketing is offered a $100,000 salary and a recruiter’s fee is 20%, the recruiter would receive $20,000 in fees.
Fees for legal work vary from firm to firm and from position to position.
You can pay anywhere from 15% to 40% or even 50%.
Typical industry standards range between 20 and 25%.
You always get what you pay for when hiring a headhunter.
The average fee these days is 15%, while others are charging 30-40-50%.
Getting better service when you pay 25% is not guaranteed.
There are several ways to retain a recruiter, but it is similar to retaining a lawyer.
If you hire a lawyer, you’re usually paying them a monthly fee for their services.
Typically, this isn’t how recruiters are retained, although you can do so if you have a substantial recruiting need.
Generally, retained headhunters only work on one or two positions at a time.
Recruiters will typically charge you an upfront fee, also known as an engagement fee.
In exchange for working on a search for you, you’re paying that recruiter, and it’s typically that recruiter who has exclusive rights to work on that role.
A retainer recruiter will receive all of the money you pay upfront on your final invoice.