The false economy of recruitment fees
A recruitment fee can be perfectly reasonable when it buys briefing, sourcing, screening, verification, judgement and risk reduction. It is much harder to defend when it buys CV forwarding and a confident email.
What work was actually done for the fee?
That is the commercial question buyers should ask before accepting salary-percentage theatre. The fee should map to visible work and risk reduction.
When agency spend becomes rented capability
For recurring stable hiring, repeated agency fees can become rent on capability the client could own, borrow or buy more intelligently.
Break-even model
Using an internal recruitment capability assumption of roughly GBP 80k per year, the research suggests reviewing the model once projected annual agency spend is likely to exceed that level and hiring is stable over 12 months.
Approximate thresholds
- Four to five senior hires.
- Twelve to sixteen junior or professional hires.
- Twenty to twenty-four frontline or high-churn hires.
Where agencies still add value
Agencies can add real value when they do high-touch work: market mapping, briefing, persuasion, screening, verification, judgement and difficult search. We are not anti-recruiter. We are anti-fee-without-work.
Sources and limitations
These figures are model assumptions from the included research, not universal truths. Two senior or four junior hires usually do not justify full-time in-house recruitment on cost alone, but may justify capped retained, fractional, embedded or verification-led support.