Fixed fee recruitment vs agency fees: which is right for your business?

When a small business needs to hire, the first question is often how much it's going to cost. For years the default answer has been a recruitment agency and a fee based on the new starter's salary. Fixed fee recruitment offers a different route. Here's how the two compare, so you can choose what suits your role and your budget.

How traditional agency fees work

Most agencies work on a contingency basis. You only pay if you hire one of their candidates, and the fee is a percentage of that person's first-year salary. In the UK this is typically around 15% to 20%, rising to 25% or more for senior or hard-to-fill roles.

On a £35,000 role, a 20% fee is £7,000. The fee rises with the salary, so the cost isn't known until the offer is agreed. The agency also keeps the candidates you didn't hire on its own books.

How fixed fee recruitment works

With fixed fee recruitment, you agree the price before any work starts. The fee is based on the level of support you need, not on the salary of the person you hire. You might pay for advertising only, or for advertising plus CV sifting and pre-screening, depending on how involved you want to be.

At Wright Resourcing, the Basic package starts from £700 per job and Enhanced from £1,700 per job. For businesses that want the whole process handled, Premium is 10% of annual salary per hire.

What you're really paying for

Whichever route you choose, it helps to separate the stages of recruitment:

• Attraction: writing the advert and getting it in front of the right people on job boards, LinkedIn and social media.
• Selection: sifting CVs, pre-screening calls and building a shortlist.
• Process: scheduling interviews, handling offers and regrets, and checking references.

Many businesses are comfortable running interviews themselves but don't have time to read through hundreds of applications. Paying for exactly the stages you need is usually more cost-effective than paying for all of them.

When fixed fee recruitment makes sense

• You're hiring for more than one role, or you hire regularly.
• You want to know the cost up front for budgeting.
• You're happy to be involved in interviews and the final decision.
• You want to keep your candidate pipeline for future roles.

When a percentage-based model can suit

For very senior or specialist roles, where the right person may not be actively looking, a fully managed search can be worth the higher cost. That's why a percentage-based option still has its place. The key is choosing it deliberately, not by default.

Who owns the candidates?

This is the question that's easiest to overlook. When an agency places a candidate, the people you didn't hire usually stay with the agency. With Wright Resourcing, you keep full access to your candidate pipeline, including the profiles, the data and the relationships, even after the engagement ends. Next time you're hiring, you may already have a shortlist.

The bottom line

Fixed fee recruitment gives you control over cost and involvement. Agency fees trade that control for a fully managed service. Many growing businesses find a mix works best: fixed fee packages for most roles, and a managed option for the occasional hard-to-fill position.