Why Traditional Recruitment Fees No Longer Make Sense (and What Better Models Look Like)
Traditional recruitment fees are increasingly misaligned with modern hiring needs, prompting businesses to seek leaner, outcome-driven models.
For decades, recruitment agencies charged 15–30% of annual salary for successful placements. Yet that structure increasingly clashes with business realities.
Market Pressure and Fee Declines
The UK recruitment market has shown weakening fee growth. Firms like Hays and SThree have reported declines in net fees due to lower permanent hiring demand and market uncertainty in 2025.
These industry headwinds reflect wider hiring and economic caution among companies.
Value vs. Cost
Traditional fees can feel disconnected from the value delivered. Paying high percentages is harder to justify when:
- Internal hiring teams are stretched.
- Agency processes lack transparency.
- Multiple hand-offs dilute accountability.
Alternative Models Arrive
Modern models emphasise:
- Consultant-led delivery, aligning recruiter incentives with client outcomes.
- Lower, fixed fee structures with outcome guarantees.
- Flexible contingencies, such as success-based payments and performance bonuses.
As recruitment thought leaders have put it: “Recruiting is not about filling vacancies; it’s about building relationships.”
Fees should reflect outcomes, not transaction volume. This shift is making lower, result-focused models increasingly appealing, particularly when skills are scarce and quality is paramount.
