Recruitment pricing is harder to understand than it should be, largely because the industry has not been especially keen to explain it. Here is how the models actually work.
Contingency: you pay when you hire
The most common arrangement for permanent roles. The agency sources, screens, and submits candidates. If you hire one, you pay a fee calculated as a percentage of the first-year salary. If you do not hire, you pay nothing.
Percentages vary by market, seniority, and how hard the role is to fill. Specialist and senior roles sit higher than volume roles.
What it suits: roles where there is a reasonable candidate pool, where you are comfortable working with more than one agency, and where you want no financial commitment until there is a result.
The trade-off: you are one of several priorities. A contingency recruiter working six roles will spend their time where the probability of a fee is highest. If your role is difficult, your salary is below market, or your process is slow, you move down the list — and you will not be told that.
Retained: you pay in stages
Used for senior and executive appointments. The fee is split, typically into thirds: on engagement, on shortlist delivery, and on placement.
What it suits: roles where the right person is probably not looking, where confidentiality matters, and where a thorough search of the market is worth more than a fast one.
The trade-off: you are committing money before you have seen a candidate. That is the point — the commitment buys dedicated time and a genuine search rather than a database query — but it only makes sense when the role justifies it.
Container: a hybrid
A smaller up-front commitment with the balance on placement. Gets you prioritised attention without a full retainer. Useful for roles that are harder than contingency can handle but do not warrant a full executive search.
Contract and temporary: a margin on the rate
For contract staffing the agency pays the worker and invoices you a higher rate. The difference covers employment costs — tax, insurance, statutory benefits — plus the agency's margin.
Ask for the breakdown. A reputable agency will tell you what the worker receives, what the employment costs are, and what the margin is. If they will not separate those figures, that is informative.
What it suits: project work, seasonal peaks, cover, and interim specialists. Also useful for trialling someone before committing to permanent employment, where contract-to-permanent conversion terms are agreed up front.
RPO: you buy capacity, not placements
Recruitment process outsourcing is priced on time rather than outcome — usually a monthly fee covering a defined scope, sometimes with a smaller per-hire element.
What it suits: sustained hiring volume. If you are making forty or more hires a year, paying a percentage on each one becomes expensive relative to the cost of dedicated recruiters working on your roles.
The trade-off: you are paying regardless of output, so it only works when the volume is genuinely there and sustained.
Questions worth asking any agency
What is the replacement guarantee, and what are its exclusions? A guarantee that excludes redundancy, restructure, and performance covers almost nothing. Ask what is actually included and get it in writing.
Is the fee based on base salary or total package? It changes the number meaningfully for roles with significant bonus or commission.
What happens if we hire a candidate you submitted, in a different role, six months later? Most terms cover this. Know what you are agreeing to.
Who actually does the work? On senior searches in particular, the person who wins the business is not always the person who runs the search.
The cost people forget to count
Comparing agency fees against zero is the wrong comparison. Running a search in-house costs real money: your recruiters' time, your managers' time screening unsuitable applications, job board spend, and the cost of the role sitting unfilled.
That last one is usually the largest and the least measured. A vacant role in a revenue-generating function costs the business every week it stays open. For many positions, several weeks of vacancy exceeds the entire agency fee.
That does not mean an agency is always right. It means the comparison should be honest.
Where to start
Be clear about what you are buying. Contingency buys access to candidates. Retained buys a search. RPO buys capacity. They are not interchangeable, and the cheapest option for a difficult role is frequently the most expensive once you count the time.
Sizanid works across all of these models. If you want a straight answer about which fits your situation — including when the answer is that you do not need us — [start a conversation](/find-talent).
