How much does recruiting cost?
Whether a company is recruiting for part-time, full-time or temporary employees, professional recruiting agencies take the burden of discovery and hiring off HR staff members’ hands. Recruiting agencies are also called "staffing agencies", "search firms" or, more casually "headhunters". Recruiters assess a company’s needs and fill positions, from entry-level to executive suite, one employee at a time or many.
Professional recruiters use a mix of branding, recruiting, social media and technology to convey a company’s brand and connect it to the ideal candidates. Recruiting is commonly used across a wide range of occupations, including engineering, healthcare, administrative, customer service, light industrial, hospitality, sales and marketing, and more. Tanya Bourque, owner of OpExpert, a recruiting agency in Philadelphia, Pennsylvania, provides insight on the cost factors of hiring a recruiting agency.
Hourly rate
For consulting or short-term projects, some recruiters charge an hourly rate for their services. Rates can vary depending on the firm, the recruiters’ experience and prior outcomes, and the industries they specialize in. Some firms have variable hourly rates based on the type of recruiting services being provided and how extensive the work required is. For example, OpExpert charges $75–$125, depending on the situation.
Project rate
Some recruiters charge set project rates. For example, OpExpert sometimes charges a flat rate based on the number of positions the client company needs to hire for. OpExpert offers a flat rate quote, which encompasses all the recruiting and recruitment marketing services they’ll provide.
Percentage rate
Some recruiters work for a percentage of the new hire’s salary. This percentage is typically around 20 percent of what the new employee will earn their first year. If a recruiter charges a percentage, it’s a good idea to clarify whether that percentage is of the new employee’s base salary only or includes bonuses and commissions earned as well.
Recruiting jobs
Recruiting packages are customized, based on the needs of the client, says Bourque with OpExpert. Rates are based on the complexity of the project and the estimated time to fill the positions. Here are two examples of recruiting costs from OpExpert:
Client 1 project: $1,500
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Recruiting services provided: Hourly-based recruiting for a small cosmetics company that wanted to hire an office manager
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Approximate hours of recruiting work: 12
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Outcomes: OpExpert filled the position in less than a week. Candidates were interviewing within 48 hours of working on the requirement. The salary for the position was $60,000. If the fee had been based on the traditional contingency search, the cost for the recruiting services would have been $12,000, says Bourque. The client saved over 87 percent by paying on an hourly rate rather than the traditional pay model.
Client 2 project: $18,000
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Recruiting services provided: Package-based recruiting project for a jewelry company opening an office. They needed a 10-person staff to support their growing business. The positions ranged from an executive assistant to warehouse staff.
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Approximate hours of recruiting work: 135 hours
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Outcomes: OpExpert completed the project in less than a month in a highly competitive marketplace. Two recruiters worked on this project and handled recruitment marketing for the client as well.
Clientele
Recruiting agencies partner with a wide range of companies, helping connect them to needed talent. From Fortune 500 global corporations to small organizations just starting out, finding the right candidate for the job is key to good business. These services aren’t only for companies with big human resources budgets. "Our most frequent clients are small businesses and startups," says Bourque with OpExpert. “They are usually companies that need extra recruiting help but don’t have a budget to hire a full-time recruiter on their staff. They are going through growth that they don’t know how to handle and come to us for help.”
