Direct hire, a.k.a. permanent placement hiring fits the standard model of recruiting and hiring:
- Talented person leaves company A...
- ...to go work for company B
If a contingency recruiter is involved in the transition, that recruiter is often paid a one-time "finder's fee" for the recruiting, screening, interviewing, reference-checking, etc, that brought the company and the talent together. This fee also reimburses the recruiter/agency for the time and expense incurred to screen out all the other candidates who were not hired.
Generally, the fee is calculated as a percentage of the annual salary. Expect something between 20%-35% depending on the market, the position, your industry, the complexity of the process, etc.
Options to consider:
- Direct Hire is best used when the candidate you want is already employed elsewhere.
- Many companies will provide a replacement guarantee or some kind of refund if the deal goes sour shortly after hiring.
- If your position has a salary range, agencies may agree to a flat-fee based on a median salary expectation.
- Non-profit and other specialty groups may qualify for discounts.
- Exclusivity brings discounts as well--agree to work with only that agency (or, consider retaining them) and you may realize incredible savings and a smoother recruiting cycle to-boot (because you only have to coordinate with one agency/recruiter).
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