Recruitment agency fees: how pricing differs by market

What you are actually paying for

A recruitment agency fee looks like one number, but it is the price of a specific promise. Before you compare quotes from agencies in two countries, check which promise each one is selling. The percentage only makes sense next to the model, the salary it is charged on, and what happens if the hire leaves early.

Most agency hiring runs on one of four models. Each one moves cost and risk between you and the agency in a different way.

• Contingency: the agency is paid only when a candidate it introduced is hired, so it carries the risk of a failed search. It often works several roles for several clients at once, and yours may not be its priority.
• Retained: you pay in stages from the start, often in thirds, and the agency commits a dedicated search to your role. Part of the fee is due even if nobody is hired.
• Flat fee: a fixed price per hire that does not grow with the salary, more common when you fill many similar roles.
• Temporary and contract: there is no placement fee. The agency employs or pays the worker and adds a margin to every hour or day it bills you.

Fees by market: what public sources show

Published figures on agency fees are scattered, and many come from agencies describing their own market. The table below collects figures stated on public pages and names the kind of source, so you can see where each number comes from. Treat every line as a reference point for a negotiation, not as a price list.

Two things stand out. The common Indian benchmark of 8.33% is one month of pay, because one divided by twelve is 0.0833, and it sits well below the UK contingency range. The German average from the BDU, the German association of management consultancies, describes firms that work on exclusive, mostly retained mandates, and the largest share of their placements in 2024, 31%, were roles paid 100,000 to 150,000 euros. So that figure is the price of senior search, not of filling an office or warehouse role.

The North American line is a different kind of number. Gross margin is the gap between what a staffing firm bills and what the work costs it, here averaged across 14 publicly traded firms and all of their business lines. Staffing Industry Analysts reported that this average fell to 26.2% in 2025 from 28.1% in 2022. It tells you roughly how much room a temp supplier has in its rate, not what a single quote should be.

What the percentage is charged on

Two quotes with the same percentage can produce very different invoices, because the base matters as much as the rate. Reed's executive search terms charge the fee on total first-year gross remuneration, including commission, bonuses and benefits such as a car allowance. Indian agencies usually quote on annual cost to company, which is the whole package rather than base salary. A UK contingency quote may be on starting salary alone.

Ask each agency to state the base in writing: base salary only, base plus guaranteed bonus, or the full package. Then check whether the fee follows the salary you advertised or the salary the candidate finally accepts. If you hire in several countries, put every quote on the same base before you compare them.

What pushes a quote up or down

Inside any one market, the same agency can quote very differently for two roles. These are the factors that usually explain the gap.

• Seniority: the UK and Indian fee guides in the table both say seniority moves the rate, with junior roles at the low end and senior or specialist roles higher.
• Scarcity: a role with few qualified people, or one that means approaching candidates who are not looking, takes more effort and is priced higher.
• Exclusivity: an agency given the role alone carries less risk than one competing with three others. The UK guide in the table puts exclusive recruitment at 12% to 18%, below its contingency range.
• Volume: several similar hires in one brief often earn a lower rate or a fixed project fee.
• Guarantee length: a longer rebate period is more risk for the agency. Reed's tiers pair the 35% fee with an 18-month guarantee and the 27% fee with a six-month one, each with a rebate of two thirds of the fee.
• Payment timing: retained stages are paid before anyone is hired, while a contingency fee may fall due after the start date. One Indian firm's published refund policy makes its 8.33% fee, plus GST, payable one month after the candidate joins, with a replacement if they leave within 90 days.

How to compare quotes across countries

Start from the role, not the country. A mid-level developer in Pune and a finance director in Frankfurt are not the same purchase, and a fee range from one market does not transfer to the other. When you write the brief, list the hires, the salary base and the guarantee you need, and ask every agency to quote against that same sheet. Our guide on how to choose a recruitment agency covers the questions to ask beyond price.

Then turn each quote into one figure: the expected total cost of a successful hire. Include VAT or GST, any upfront stage you would lose if the search failed, and the refund you could recover under the guarantee. A lower percentage with a short guarantee can cost more than a higher one if the hire leaves in month four.

Keep the percentage for the negotiation and the total for your budget. The figures here are public reference points from agencies and industry bodies, and every fee is finally set in your contract. Where a source is an agency describing its own market, it shows what that market quotes, not what every firm will charge you.