What is Placement Fee?
A placement fee is what a client pays a recruiter or agency when a placed candidate is hired, often a percentage of first-year pay. On LiveRec any fee between a Live Recruiter and a client is agreed outside LiveRec; LiveRec does not take a share.
How a placement fee is usually set
The fee is a commercial term between the recruiter and the client company. It is normally written into a signed client agreement before any candidate is presented. Three things are worth agreeing in writing:
- The base. Most agreements apply the percentage to first-year base pay. Some also include a signing bonus or guaranteed variable pay. The agreement should say which.
- The trigger. The fee is due when the candidate starts, or when they accept the offer. Say which one.
- The guarantee period. Many agreements say what happens if the hire leaves early, such as a replacement search or a partial credit. Terms differ from firm to firm, so read yours.
Who pays it
The client pays the placement fee. A job seeker is never the party who owes it. If anyone asks a candidate to pay to be placed or to be considered for a role, treat that as a warning sign and read how to avoid job scams.
How it shows up on LiveRec
Live Recruiters use their own portal to manage clients and candidates. The placement fee itself is agreed and invoiced between recruiter and client outside LiveRec, and LiveRec takes no share of it. Employers who work with a recruiter should keep a copy of the agreement alongside the offer.
Example
A recruiter and client agree a percentage of first-year base pay in a signed client agreement. The recruiter presents three candidates, the client hires one, and the fee becomes due on that person's start date as the agreement says.