2 min read
#Recruiting
04.03.2024

How Do Recruitment Agencies Get Paid: A Clear Explanation

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Misconceptions about how do recruitment agencies get paid can lead to hesitation and misunderstanding among job seekers. A common myth suggests that the agencies take a portion of a candidate’s salary – which is never the case. To address this confusion, let’s delve into the actual payment models for recruitment agencies. Spoiler alert: we do not deduct fees from the candidate’s future earnings.

How do recruitment agencies get paid in the success fee business model

Firstly, it’s crucial to debunk the myth: recruitment agencies do not take a cut from your salary. This misunderstanding likely stems from the “success fee” model, where the agency’s payment is a percentage of the candidate’s annual salary. However, this fee is charged to the employer, not deducted from the candidate’s salary, leaving the latter’s income unaffected. For instance, an agreement might specify that the agency’s fee will be 22% of the hired candidate’s annual salary, a cost borne entirely by the hiring company from their recruitment budget.

Subscriptions and Recruitment Process Outsourcing

While the success fee model might suggest that the agency’s earnings are directly tied to the candidate’s salary, this is no longer a common occurrence. This model is generally the most expensive and is chosen by companies planning limited hires or those new to working with agencies. How do recruitment agencies get paid when not using the success fee model?

Other, more common business models include flat fees or fixed prices, which are more predictable and easier to budget for. These models are more cost-effective and efficient for both the agency and the hiring company, supporting multiple recruitment processes without linking fees to the candidate’s salary.

At 8Bit – Games Industry Recruitment, we offer alternatives such as Recruitment Process Outsourcing and Subscription models. These approaches provide comprehensive support for hiring companies at a fixed cost, promoting efficiency and cost savings compared to the success fee model. How do recruitment agencies get paid in these scenarios? Through predetermined, transparent fees that enable the hiring company to manage recruitment costs effectively.

Fees from the candidates? Red flag 🚩🚩🚩

Lastly, addressing a critical concern: do recruitment agencies get paid by candidates? It’s essential to know that it is illegal for agencies to charge candidates for participating in the recruitment process.

Let’s repeat. It’s not “unwanted, unpopular, unwelcome”. It’s illegal.

Any request for payment from a candidate is a significant red flag, indicating a scam rather than a legitimate agency operation. While agencies may offer paid services like CV reviews or career consulting, these are separate from the recruitment process itself and should not be misconstrued as a fee for job placement.

In summary, understanding how recruitment agencies get paid helps clarify that these fees do not impact a candidate’s salary and that legitimate agencies operate with transparency and integrity. Misconceptions can deter job seekers from leveraging valuable recruitment services. It’s vital to recognize the diversity in agency payment models and the legal and ethical standards governing these practices.