Agency fees, in house cost and an always on search

By SkavanderHR · 13 September 2026

A UK contingency agency is commonly paid 15% to 20% of the first year’s salary for a standard role and 20% to 30% for a specialist one. In Germany the average success fee was 27.5% of target annual income. An in house recruiter costs a salary either way. An always on search costs about a tenth of an agency.

Key takeaways

• The REC’s own benchmarking puts UK contingency fees at 15% to 20% of first year salary, rising to 20% to 30% for specialist or hard to fill roles.
• The BDU, the German consulting association, put the average Personalberatung success fee at 27.5% of target annual income in 2024, essentially flat against 28% in 2023.
• Retained executive search is commonly about a third of first year total compensation, billed in stages across the search rather than on the result.
• An RPO provider only beats agency economics at real volume, roughly 15 to 25 roles a year by one industry estimate.
• Published cost per hire benchmarks count direct recruiting spend only, so they understate what a hire really costs.

What does a recruitment agency actually charge?

Three models cover almost every quote a company of this size will see.

Contingency is by far the most common. The agency is paid only if it fills the role, and only once the person starts. The REC’s industry benchmarking for 2024 puts the typical fee at 15% to 20% of the first year’s salary for mainstream permanent roles, rising to 20% to 30% for specialist, hard to fill or executive work, and falling to 10% to 15% for high volume entry level hiring.

Retained search works differently. Part of the fee is paid up front to secure a firm’s attention on one named search, with the rest due at shortlist and on completion. Industry practice puts the total at roughly a third of first year total compensation, split across those stages. Nobody publishes this as a rate card, so treat a third as the reference point rather than a rule.

In the German speaking markets the two blur. The BDU’s Facts and Figures study of the Personalberatung market put the average success fee at 27.5% of the candidate’s target annual income in 2024, barely moved from 28% the year before, and practitioners in the market describe a standard band of 25% to 33% of target annual salary. The DACH number sits above the UK one for the same work, which matters if a search spans both.

Published fee ranges, as a share of first year salary

Route	How the money works	Published range
UK contingency, mainstream role	Paid only on a start	15% to 20%
UK contingency, specialist or hard to fill	Paid only on a start	20% to 30%
Retained search	Paid in stages, filled or not	About a third
Germany, average success fee	Paid on a start, on target income	27.5%
DACH market standard	Paid on a start, on target income	25% to 33%

Sources: REC Industry Benchmarking Report 2024 and the APSCo member survey for 2025, as cited by Inspire Resourcing. BDU, Facts and Figures zum Personalberatungsmarkt 2024. Werntges Search on German fee practice. Retained pricing is widely reported industry practice rather than a published figure from a named body.

What does that come to on a senior engineer’s salary?

Percentages are easy to skim past, so put them against one salary. Take a senior data engineer in the UK, paid the median that job adverts for that exact title actually carry, a figure job advert aggregators publish for anyone to check.

At the bottom of the standard band, about a seventh of that first year’s pay leaves with the agency on the day the person starts. At the specialist end, which is where a senior data engineer search usually sits, closer to a third of it does. For one hire. The same search run in Germany, priced on target annual income at the market average, lands between those two, because the DACH average is above the UK mainstream band.

A third of a senior engineering salary is more than a team of this size typically spends on everything else in its hiring year put together. That is the number worth holding in mind, not the percentage.

None of that makes the fee unreasonable. A contingency fee is owed only once someone real is in the seat, so nothing is carried while the search runs, and the firm absorbs the searches that fail. It is the price of an outcome, paid in one piece, at the end. What it is not is a small number, and it recurs in full the next time the same role opens.

What does an in house recruiter cost instead?

A salary, continuously, plus the tools they need, whether three roles are open or none. That is the honest trade: the money stops being event driven and becomes fixed. For a team hiring steadily across several roles a year that maths works out. For a team filling one hard role at a time it rarely does, because the fixed cost runs through every quiet month.

Two published facts are worth keeping in view when comparing them.

The first is a methodology point that applies to every benchmark on this page. Cost per hire figures, including SHRM’s own, count direct recruiting spend only. They exclude the cost of the role sitting open, the hiring manager and interviewer hours, and onboarding. The real total is higher than any headline cost per hire, in every model.

The second is time. SHRM’s benchmarking put the median time to fill at 44 days in 2025 and 39 days for non executive roles in its 2026 report, while engineering roles average 62 days globally on one ATS vendor’s data, and Bitkom puts the average German IT vacancy at almost eight months. Whoever is doing the searching, the role is unfilled for that whole stretch, and that period is missing from every cost per hire figure quoted anywhere.

An RPO provider is the third variant here: an outside team runs your process across many roles for an ongoing fee. One industry estimate puts the point where that beats agency economics at roughly 15 to 25 roles a year. Below that, the setup overhead eats the saving.

What does an always on search cost?

We charge a flat monthly amount per role, and it costs about a tenth of a recruiting agency. Nothing is owed on a result, because the searching is the thing being paid for: every person in the market who matches the criteria for that post is found and told about the role, and the ones who answer arrive already interested. That work typically covers everyone relevant within two weeks of starting. It can be stopped any month, and your own team takes every interview.

The structural difference is not the price. It is what happens to the work. An agency fee buys one shortlist and leaves nothing behind; the same search, run monthly, keeps reaching the same market for as long as the role is open, and for the next role of the same kind.

What does this mean for a company of twenty to five hundred people?

Pick the model by the shape of the hiring, not by habit.

One senior or confidential hire, where someone else should carry the whole search and you would rather pay only on the result, is what contingency and retained search are built for. Hiring at real volume across many roles is what RPO is built for. A role you expect to fill again, in a market where the people who fit are simply not applying, is the case where a monthly search beats both on cost and on reach, because the fee is not a share of a salary and the pool is not limited to applicants.

If the decision is live, the side by side of an agency, RPO, an embedded recruiter and a monthly search sets out who each one reaches and how each is paid, and a role page such as SAP consultants shows what the search looks like for one narrow market. A 20 minute call is usually enough to work out which of the four fits the role in front of you.

Numbers from our own searches. Written and checked by SkavanderHR.