Advice and guides / For employers
Recruitment agency fees in India, compared
Three models, and the choice between them matters less than the four clauses underneath them.
Most Indian recruitment is billed one of three ways. Understanding what each model does to the agency's behaviour is more useful than comparing headline numbers, because the incentives decide what lands in your inbox.
Percentage of annual CTC
The default for permanent hiring. The fee is a percentage of the candidate's first year fixed CTC, billed on joining. One month's salary works out to roughly 8.33 percent, and that is the number a lot of agreements anchor to. Volume roles are often placed below it. Senior and specialist roles run well above.
What it does to behaviour: it rewards filling the role, and it rewards filling it at a higher salary. That is worth knowing when an agency pushes a candidate at the top of your band.
Flat fee per hire
One agreed amount per position regardless of salary. Predictable, easy to budget, and it removes the incentive to inflate offers. It works best when you are hiring several similar roles at a similar level, and badly when one of the roles turns out to be much harder than the others.
Retainer
Paid in stages, typically part on engagement, part on shortlist, part on joining. Normal for senior searches. You are buying committed effort rather than a lottery ticket, and the agency will usually work the mandate exclusively. The risk is yours: if the search does not land, some of the money is spent.
The four clauses that decide what you actually pay
- What counts as CTC. Fixed only, or including variable, joining bonus and retention bonus? This single definition can move the invoice by twenty percent.
- The replacement window. How long, how many replacements, and whether the clock restarts for the replacement hire. Covered in detail in the clause to ask for.
- Ownership of candidates. How long an agency can claim a fee for a candidate they introduced. Six months is common, twelve is asking a lot, and it matters if the same person applies to you directly later.
- When payment is due. On joining is normal. On offer acceptance is not, and you should push back on it, because it moves all the joining risk to you.
What is actually negotiable
More than agencies imply. The percentage is negotiable on volume. The replacement window is negotiable almost always. Payment terms are negotiable. Exclusivity is worth trading: an agency that has the role exclusively will put real effort in, and that is worth a discount in either direction depending on who wants it more.
What is rarely worth negotiating is the cheapest quote in the room. A low fee on a contingency basis means the agency will send you whatever it already has, quickly, because their economics depend on volume across many clients rather than on your role.
How to compare two quotes properly
Ask both to price the same specific role, with the same CTC definition, the same replacement terms and the same payment trigger. Then ask each what happens if the first shortlist is wrong. The answer to that last question tells you more than the number does.
Our own fee is agreed per mandate, in writing, before any work starts, and so are the replacement terms. Send us a brief and you will get all of it on one page.