What a 20% recruitment fee really costs you
Most business owners know agency fees are high. Fewer have sat down and looked at what the percentage model actually charges them for, because the fee arrives as one opaque number after the placement, when everyone is relieved the search is over.
So let us look at it properly.
The maths nobody shows you
A typical Australian recruitment agency charges 15% to 25% of the first-year salary of the person you hire. On a $100,000 role at 20%, that is a $20,000 fee. For most roles, the real work involved (writing the ad, screening applicants, interviewing, checking references, managing the offer) is somewhere between 25 and 50 hours.
Divide it out and you are paying an effective rate of $400 to $800 per hour, mostly for work a good process makes routine.
Why the percentage exists
The percentage model was not designed around effort. It was designed around outcomes agencies could sell: "you only pay if we place someone." That sounds fair until you notice what it does to incentives. The agency is paid more when your new hire costs you more, is paid nothing for honest advice that slows a placement down, and is paid the same whether the search took 30 hours or 60.
A guarantee period softens the risk, but you are paying a very large premium for that insurance, every single time you hire.
The same search, by the hour
When the same work is billed by the hour, the numbers change shape. A typical mid-level search at our blended rate lands between $6,000 and $9,000, itemised to the task, with an estimate and a cap agreed before work begins. A straightforward role costs less. A genuinely hard search costs more, and you can see exactly why in the invoice.
- You pay for effort, not for your candidate's salary.
- Advice is free of commission. If we think you should promote internally, we say so.
- You can buy the whole search or just the stage you are stuck on.
Run your own numbers
Our fee calculator lets you drag a salary slider and see the gap for yourself. On most roles the difference is not small; it is the size of a decent marketing budget, a new piece of equipment, or a chunk of a junior salary.
Hiring is expensive enough. The fee for help should not punish you for growing.
Marque Talent runs recruitment by the hour. Never a percentage.
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