Agency fee or flat fee: what recruiting should cost a 20-person company

A contingency agency typically charges 20 to 25 percent of first-year salary. On a $110,000 operations manager that is $22,000 to $27,500 for one hire. For a large company hiring dozens of people that math can work. For a 20-person company it is often the single largest line item of the year.

Retained search adds a deposit up front and is designed for executive roles. It is rarely the right instrument for the roles that keep a small business running: office manager, controller, customer support lead, sales rep.

Flat-fee recruiting prices the work, not the salary: scoping the role, writing the post, screening the applicants, interviewing the shortlist, and closing the offer. For most small-company roles this lands well under half of an agency fee, and you know the number before you start.

What to ask any recruiter, regardless of model: who exactly will screen candidates, how many will you interview, what happens if the hire leaves in 90 days, and can you see the last three job posts they wrote.

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