What does a recruitment agency cost? Fee models explained

The short answer: for permanent hires, a recruitment agency's fee is most often calculated as a share of the candidate's first-year base salary, or as a fixed price agreed in advance. How much it comes to depends on the fee model, the seniority of the role and how hard the candidates are to find.

The longer answer is about what you are actually paying for – and what it costs not to. Here we go through the most common fee models, what drives the price, and how to get the most out of the fee.

The most common fee models

Contingency ("no cure, no pay")

You only pay if the agency finds a candidate who is hired. The model carries low risk for you, but it has a downside: the agency is not paid for its effort if the assignment fails, and therefore tends to prioritise assignments with the highest chance of a quick result. For narrow life sciences roles, this can mean a less thorough search than you would like.

Retainer (common in executive search)

The fee is split into instalments paid along the way, for example at the start, at the presentation of the shortlist and on hiring. The model is common for leaders and key specialists, because it commits the agency to a thorough, systematic search – regardless of whether the first candidate says yes.

Fixed fee

You agree a fixed sum for the assignment in advance. This gives predictability in the budget and works well when the role is clearly defined.

Hourly rates and advisory work

Some tasks are better suited to pure advisory assignments: market insight, salary analysis, help with the job specification or assessment of internal candidates.

Note: Staffing and contracting are something else. There, the person is employed by the agency and you pay an hourly rate for as long as the assignment lasts.

What drives the price?

• Seniority and responsibility. A leadership role or a role with regulatory responsibility requires a broader search and assessment.
• How narrow the market is. The fewer relevant candidates, the more work goes into mapping.
• Geography. Searching across several countries, languages and professional communities takes more time than a purely Norwegian search.
• Confidentiality. Discreet processes without an advert require more direct approaches.
• Number of roles. Several hires of the same type can often mean a better overall price.
• Time pressure. An assignment that must be solved quickly requires more capacity in a short period.

Guarantees and replacement

Many agencies offer a guarantee period: if the candidate leaves or has to be dismissed within a certain time, a new search is carried out without a new full fee. Ask about the terms before you sign. How long does the guarantee apply, and what triggers it? Under the Norwegian Working Environment Act, a probation period can last up to six months, so it makes sense to see the guarantee in that light.

What does it cost not to use an agency – or to hire the wrong person?

The agency's invoice is easy to see; the cost of the alternatives is easy to overlook. Consider:

• Time from managers and specialists. Writing adverts, screening applications, interviews and references take many hours from people who should be doing something else.
• The cost of a vacancy. In life sciences, an open key role can delay a trial, a submission, an inspection or a launch. That often costs more than the recruitment itself.
• The cost of the wrong person. A mis-hire means lost time, a new recruitment, new onboarding and often frustration in the team. In roles with regulatory responsibility, there is also the risk of deviations.

The point is not that an agency always pays off. For many roles it makes sense to recruit yourself. But for narrow key roles, the fee is rarely the biggest cost.

How to get the most out of the fee

• Invest time in the job specification. A clear job specification leads to a more targeted search.
• Be honest about the salary range. Unrealistic ranges are one of the most common reasons assignments drag on.
• Decide quickly. Good candidates often have several processes running at once.
• Set aside time for interviews before the search starts.

How Oslo Life Sciences prices assignments

The price depends on the role, the market and the service you need: permanent recruitment, executive search or market insight. Get in touch and you will receive a concrete proposal tailored to the role you need to fill. One adviser follows the assignment from the first conversation to the signed contract, so you know who is doing the work.

Want to know more about how a search works? Read about executive search and headhunting in life sciences.

Frequently asked questions

Does the candidate pay anything to be recruited?

No. The employer pays for the recruitment. Candidates pay nothing.

What is usually included in the fee?

Typically needs analysis, job specification, mapping and search, interviews, candidate assessment, shortlist, reference checks and follow-up until the hire. Ask for a written overview of what is included.

Is it cheaper to recruit yourself?

Often, yes – for roles with many qualified applicants. For narrow specialist and leadership roles, recruiting yourself can take a long time and produce a weaker candidate pool, making the total cost higher.

What is the difference between a retainer and contingency?

With contingency, you only pay when someone is hired. With a retainer, the fee is paid in instalments along the way, which commits the agency to a more thorough search.