Fixed Fee vs Percentage Recruitment: Why the Industry Still Hasn’t Changed

What is the difference between fixed fee and percentage recruitment?

Percentage-based recruitment charges a fee based on the candidate’s salary.

• PMET roles are usually based on annual salary
• Operational roles are usually based on monthly salary

Fixed fee recruitment is different. The fee is agreed upfront and does not change based on salary. It is based on the expected effort and scope of the role.

Why percentage-based pricing is still the default

Most companies do not question the pricing model. They focus on:

• Speed
• Candidate quality
• Replacement guarantee

So percentage pricing continues because:

• It is easy to understand
• It is widely accepted
• It does not require detailed scoping

It works, but it is not precise.

What percentage-based pricing actually assumes

It assumes salary reflects effort. In reality, that is not always true.

Two roles can:

• Use the same sourcing channels
• Have similar candidate pools
• Follow the same process

But if the salaries are different, the fees will be different.

Where this creates friction

Same work, different cost

A role paying $4,000 and a role paying $7,000 may require similar effort. But the fee difference can be significant. This is usually when companies start questioning the model.

Salary affects hiring decisions

Even if not discussed openly:

• Employers think about cost impact when increasing salary
• Recruiters benefit when salaries go higher

The structure itself creates misalignment.

Volume hiring increases total cost

For operational roles:

• Fees are based on monthly salary
• Hiring is often repeated

Over multiple hires, total cost becomes meaningful.

What fixed fee models are trying to solve

Fixed fee models shift the focus. Instead of salary, the question becomes: What does it take to fill this role?

That includes:

• Search difficulty
• Clarity of requirements
• Stakeholder involvement

Why fixed fees are not always used

Fixed fees require:

• Clear scope upfront
• Strong alignment between client and recruiter
• Discipline in execution

If scope changes, the model becomes harder to manage. This is why many agencies still prefer percentage pricing.

When each model makes sense

Percentage-based works when:

• The role is straightforward
• Salary benchmarks are clear
• Speed is the main priority

Fixed fee works when:

• The company wants cost clarity
• Hiring is repeated
• Effort does not scale with salary

Final thought

The industry has not changed because the current model is easy to use. But easy does not always mean accurate.

The better question is: Is the pricing aligned to salary, or aligned to the actual work required?

Speak to us

If you are comparing pricing models or reviewing your hiring approach, we are open to sharing how different structures work in practice.

If you want a full breakdown of how recruitment fees work across different role types, read our guide on recruitment fees in Singapore.