Recruitment Fees: A Guide to Pricing Models Explained

When we introduce Relancer to employers, they are often surprised that there are more pricing models than the oh-so-popular contingency fee, also known as the success fee or pay-per-hire. Even though it seems risk-free, the success fee is not always the best option for employers. Hint: it can end up being more expensive and time-consuming than other pricing models.

A fact that's even more surprising – the fee structure affects your entire collaboration with a recruitment partner, not just the financial aspect. Your success can highly depend on choosing the right pricing model.

Why? Because pricing sets expectations and commitment for both the employer and the recruiter.

Think of it this way, pricing model = collaboration type = level of commitment. Sometimes you might not need a high-commitment recruiting partner. Other times, you want someone who is fully integrated into your team.

In the next 11 minutes, you'll learn the pros and cons of every common recruitment fee structure:

• Contingency model – pay for results 
• Flat fee – pay a fixed rate
• Retainer model – pay for milestones
• Hourly rate – pay for time
• RPO model – pay a monthly rate
• Staffing fee – pay a % of the contractor's rate

What are recruitment fees?

Recruitment fees are the costs associated with hiring a recruitment agency or freelance recruiter to help you find the right talent for your open positions.

This cost covers any recruitment-related services such as sourcing, screening, and interviewing candidates. Some businesses outsource the entire recruitment process while others hand over only specific services, like sourcing candidates, to support their internal team.

Factors that affect recruitment fees

Many factors influence how much you’ll pay for recruitment services, including:

1. Complexity of the role
   Specialized or senior positions are harder to fill, driving up fees compared to entry-level or general roles.
2. Type of Recruiter
   Recruitment agencies tend to charge higher fees because they have more resources and freelance recruiters often have more cost-effective and personalized options.
3. Location
   Recruiting in the USA and recruiting in Poland have different price tags. Some markets have a higher cost of living, affecting not only candidates' salaries but also the fees of recruiters and headhunters.
4. Fee Structure
   Last but not least, the pricing model has a huge influence on your final recruitment cost. The fee structure doesn’t only impact the cost but also sets the tone for the entire collaboration. 

Let’s break down the most common recruitment fees.

Contingency model

Pay for results

The pay-for-results aka contingency fee is the most common collaboration model with external recruiters and recruitment agencies. 

With the success fee, the recruiter only gets paid if they make a successful hire. Companies prefer it due to lowered risk and recruiters like the potential of receiving higher earnings. 

Level of commitment: low to medium

Contingency recruiters can be very efficient since their earnings are on the line.

However, being dependent on success might make contingency recruiters prefer projects where they can get results faster or with less effort. To reduce risks, such as their client making a hire through another channel, they have to work with multiple clients at the same time. 

If an external partner hasn’t found the right candidate within 30-60 days, the financial pressure forces them to focus on other clients. This can lead to disappointment as the recruiter might not take the financial risk to go the extra mile and find the perfect fit for the company. 

To make contingency fees work, you need to be transparent and open. Be honest and upfront about your situation and expectations, and ask your recruiter to do the same. If you want to increase commitment, think about giving your recruitment partner exclusivity or use a retainer instead.

How much does it cost?

A contingency fee runs between 10% and 30% of the candidate’s total first-year annual earnings but it can go up to 50% for hard-to-fill or senior positions.

Real-life examples of fees:

• Boutique recruitment agency – Software engineering role – London – 20% contingency fee (approx. £15,000)
• Boutique recruitment agency – Software engineering role – Tallinn – 15% contingency fee (approx. €7,000)
• Recruitment agency – Marketing manager – Buenos Aires – 20% contingency fee (approx. $3,500)

When is the contingency fee a good option? 

• If it’s your first time working with a recruiter or agency, contingency allows you to assess their performance without an upfront financial commitment.
• When you’ve already invested in other channels and want to avoid additional costs before getting results.
• When you don’t need to fill multiple roles, as the costs can ramp up quickly.
• When you only need help with specialized or senior-level positions.

Pro tip: Avoid working with too many contingency recruiters at the same time. By doing so, you're fostering the spray-and-pray mentality. The agencies will be competing for your placement fee and might focus on quantity instead of quality. It can also create a poor candidate experience and hurt your employer brand.

The contingency pricing model is not a bad option if you have a mutual understanding of commitment but make sure you’re on the same page with your recruiter.

Flat fee

Pay a fixed rate

A flat fee is exactly what it sounds like — a fixed price for the recruitment service, regardless of the candidate's salary or hours worked. Because it’s so straightforward, it’s used by businesses that prefer cost predictability. 

When it comes to commitment and collaboration, the flat fee is similar to contingency. The key difference is that the flat fee is known in advance whereas the success fee depends on the final salary of the candidate.

Level of commitment: medium

The flat fee provides clarity for both sides. The recruiter knows their payment upfront, and the employer can budget for it. A fixed rate builds more commitment than contingency because both the client and recruiter take time to align on the role requirements and agree on the fee.

How much does it cost?

The cost of a flat fee depends on the role's complexity and location.

Real-life examples of fees:

• Boutique recruitment agency – Software engineering role – London – approx. £10,000
• Freelance tech recruiter – Product manager – Tallinn – €4,500
• Recruitment agency – Marketing manager – Buenos Aires – approx. $3,000

When is the flat fee a good option?

• When you’re filling few roles or only require assistance with specialized or senior-level positions, as the costs can ramp up quickly.
• When you have a strict budget and want cost certainty.
• When the role has a more complicated remuneration package and it's difficult to set a contingency fee (e.g. executives and salespeople).

Pro tip: Like with contingency, make sure you have a mutual understanding of commitment. If you want to have more commitment use a retainer model instead.

Retainer model

Pay for milestones

By definition, a “retainer” is:

• a fee paid in advance to someone in order to secure or keep their services when required.

The retainer model is a set of conditions (or milestones) when the payments are released.

It's up to you and the recruiter to set the conditions for payments. But to give you a common example, a retainer can consist of three payments:

1. Prepayment (to get started with the project)
2. Shortlist (when candidates are sourced, pre-screened and interviewed)
3. Commission (when the candidate is hired)

In some cases, a guarantee period release may also be included, where a portion of the payment is tied to the candidate remaining in the role for a certain period.

Level of commitment: high

A retainer fee is a sign of commitment on both sides. The client invests upfront, securing the recruiter’s time, focus and expertise. In most cases, this means an exclusive partnership where the recruiter is focused on filling the role with a customized approach.

It works best for senior or hard-to-fill positions because these roles need more than just a list of candidates. They need collaboration, clarity on role requirements, and trust between the client and recruiter.

How much does it cost?

The total cost of a retainer can be 25–50% lower than contingency with significantly more focus, time and quality from the recruiter. You just have to invest a bit in advance.

Real-life examples of fees:

• Software engineering role – London – 50% in advance, 50% for a successful hire. Total cost of £10,000.
• Software engineering role – 20% in advance, 30% for the shortlist, 50% for a successful hire. Total cost in Estonia 6,000€
• Marketing manager role – Buenos Aires – 20% in advance, 80% for a successful hire. Total cost of $3,000.

When is the retainer model a good option?

• When your existing hiring channels aren’t delivering results.
• When the role requires specialized skills or experience, and the talent pool is limited.
• When you prefer exclusivity and working closely with one recruiter or agency.
• When you don't have or need an in-house recruiter.

Pro tip: For a retainer model to work, find a recruiter you can trust.

It’s easy to say, but not so easy to do. That's why so many companies prefer to lower their risk with the contingency fee. But for those who want the benefits of the retainer model, here's how to find a trusted recruitment partner.

1. References
   Ask companies who are similar to yours by size, industry and culture (or look at Relancer 😉). Look for a recruiter who has previous experience with the roles you need to fill.
2. Small and specialized
   Boutique agencies and freelancer recruiters tend to be more specialized in a niche (roles or industries), so they know their field better. They're also more personal regarding collaboration.
3. Relancer
   I'll risk sounding unprofessionally biased (yes, this is us 🙋‍♀️) but why should you search and evaluate recruiters yourself, when someone has already done it for you? Use us to find the best recruiters in your country and industry with one simple search.
4. Testing
   If you've worked with multiple recruiters or agencies, you can compare them. Pick your best partner so far and discuss your collaboration model.If it's your first time working with a recruiter, go with another model so you can test the collaboration.

Hourly or daily rate

Pay for time

It's a common misconception that experienced recruiters only work on a contingency basis. Modern forward-thinking recruiters lean towards having a more personal committed relationship with their clients. While an hourly fee may limit their earning potential, it enables them to focus on quality and dedicate the time needed to find the best candidate for the company.

That's why more than half of the recruiters on our platform have already set their daily or hourly rates. You can access their expertise while staying flexible.

Level of commitment: high (while still being flexible)

What I mean by flexibility is that you're not stuck with a full recruitment service. You can set the project scope, even if you only need help with pipeline management for a few weeks. It can be 20 or 100 hours per month. It can consist of creating a recruitment strategy or only doing hands-on sourcing. You'll have more options than with a retainer, flat fee or contingency model.

How much does it cost?

The cost will vary based on how many hours or days the recruiters spends on your project. One way to cut costs here is to look beyond local recruiters. For example, a recruiter based in Germany might have a higher hourly rate than an Eastern European recruiter who has experience recruiting in the German job market. You can find a comparison of hourly fee ranges by geographical regions in our blog post about calculating recruitment costs.

Real-life examples of fees:

• A tech recruiter in the UK has a daily rate of £350
• A talent sourcer in the USA has an hourly rate of $60
• A marketing recruiter in Argentina has an hourly rate of $20

When is the daily or hourly rate a good option?

• When you need help with a specific task (e.g. only sourcing or screening).
• When you have multiple similar roles to fill or plan to work with the recruiter long-term.
• When you don't have or need an in-house recruiter.
• When the estimated contingency fee seems too high for your budget.
• When you need a recruiter to act as part of your in-house team, using your tools, processes, and culture.

Pro tip: When using an hourly fee, make sure you have a well-structured recruitment process. One of the biggest mistakes is paying for a recruiter's time without clear requirements or a streamlined process. Frequent changes to candidate criteria or delays in decision-making can increase a recruiter's hours and your costs.

RPO model

Pay a monthly rate

Subscription-based recruitment is a recurring fee model where employers pay a monthly or quarterly fee for ongoing recruitment support. Think of it as hiring a recruiter as part of your extended team for a set period. This model is mostly used by Recruitment Process Outsourcing (RPO) agencies.

Level of commitment: High

This model creates a close partnership between the employer and the recruiter. RPO lets you embed recruiters in your team until you solve your hiring needs. The recruiters are an extension of your in-house team, working closely with them to reach your hiring goals as fast as possible.

The recruiters can work on multiple roles simultaneously, and take over the entire recruitment process. 

How much does it cost?

The cost can range from $5,000 to $15,000 per recruiter for small to mid-sized businesses. Bear in mind that this is a monthly recurring cost.

Real-life examples of fees:

• Germany – Head of Talent Acquisition – €12,000/month
• Spain – Global Talent Sourcer – €7,000/month
• Nigeria – Senior Technical Recruiter – €3500/month

When is the subscription fee a good option?

• When you’re growing fast or expanding abroad.
• When you need a long-term recruitment partner rather than a one-off service.
• When you want to have control over your talent pool, candidate experience and employer brand.
• When you want to be cost-efficient.
• When you want to avoid working with multiple partners.

Pro tip: Before you sign a contract, check the duration, fees for early termination and renewal terms.

Many larger RPO agencies offer contracts that lack flexibility. Make sure to double-check so you don’t end up with lock-in contracts, which restrict your ability to cancel the collaboration for a certain period.

Staffing fee

Pay % of the contractor's fee

For contractor or temporary roles, recruitment fees are structured differently. These fees are usually based on a percentage of the contractor’s hourly rate or a flat fee for short-term placements.

This model has enough flexibility for employers who need to scale their workforce quickly without committing to permanent hires. Recruitment agencies often handle administrative tasks like payroll and compliance, which are factored into these fees.

Level of commitment: medium

This pricing model has a moderate commitment level. While recruiters are incentivized to fill roles quickly, the short-term nature of these placements reduces the focus on long-term outcomes. The focus is on speed and filling the role quickly rather than finding the best fit for the company.

Compared to higher-commitment models like retained or RPO recruitment, this approach is more transactional but can be a good fit for urgent, seasonal or short-term hiring needs.

How much does it cost?

The cost can range from 15 to 30% of the contractor’s hourly or daily pay.

Real-life examples of fees:

• United States – Software Engineer Contractor – $80/hour + 25% agency markup, totaling $100/hour.
• United Kingdom – Marketing Specialist Temp Role – £350/day + 20% recruiter markup, totaling £420/day.
• India – IT Support Technician – $15/hour + 30% staffing markup, totaling $19.50/hour.

When is the staffing fee a good option?

• When you need short-term or project-based talent.
• When you want to fill a role quickly without long-term commitments.
• When your business faces seasonal demands or fluctuating workloads.

Pro tip: Clarify the terms for contract extensions or converting a contractor to a permanent hire. Some recruiters might charge an additional fee for these situations.

Which recruitment fee is the best one for you?

I hope you now have a better understanding of common recruitment fees, their pros and cons. 

Don't be fooled into thinking that working with multiple recruiters on a pay-per-result basis is the best recruiting support you can get. While contingency is the best option in some cases, other fee structures, like a retainer or an hourly rate, will get you a more personal and quality-driven approach. 

Have an honest discussion with your recruiting partner and find the best way to make your collaboration a success. Although all recruiters have their preferences regarding their pricing models, most of them are flexible and open to discussion. Especially freelance recruiters and small boutique agencies.

If you need help figuring out your options – use Relancer Search to find the best recruiters for your hiring goals and challenges (it’s free).