Recruitment pricing in India is oddly opaque for something so standardised. Ask three agencies and you may get three answers, two of which arrive only after a discovery call. Here is the full picture so you can enter that call already knowing the numbers.
The five common recruitment pricing models
1. Contingency permanent hiring
This is the default for permanent recruitment in India. The agency is paid only when a candidate joins: no candidate, no invoice.
Typical range: 8.33% to 12.5% of annual CTC.
The 8.33 percent figure is one month’s salary expressed as a share of the year. It is commonly used for standard or high-volume roles. Ten percent is a practical market standard for many mid-level professional roles, while 12.5 percent and above generally covers niche skills, senior specialists and genuine headhunting.
Clarify whether “CTC” means fixed annual CTC or includes variable pay, joining bonus, retention bonus and stock. That definition can materially change a senior-level invoice.
2. Retained and executive search
Leadership, CXO and confidential hiring involve mapping the market, approaching passive candidates and running a discreet process.
Typical range: 20% to 33.33% of annual CTC, often billed one-third on engagement, one-third on shortlist and one-third on joining.
You are paying for exclusivity and committed bandwidth. Expect a market map, a reasoned longlist, structured assessments and reference checks. Retainer pricing without those deliverables is simply contingency work with a deposit attached.
3. Bulk and volume hiring
For 20, 50 or 200 hires of the same profile, percentage pricing rarely makes sense. The usual structure is a flat fee per hire that falls with volume, or a project fee for the mandate. Confirm whether replacement terms survive at volume and who pays for walk-in drives, tools and venues.
4. Contract staffing and payroll
The agency employs the worker and deploys them to the client. The monthly invoice covers salary, statutory costs and a markup.
Typical markup: 8% to 15% over total employment cost, depending on headcount and role.
The markup covers items such as PF, ESIC, professional tax, gratuity provisioning, payroll, insurance and compliance filing. Ask for registration numbers, a sample compliance report and clarity on statutory liability.
5. Recruitment Process Outsourcing (RPO)
For continuous hiring, RPO shifts recruitment from a transaction to a subscription. Pricing may be a monthly retainer for dedicated recruiters, a reduced per-hire fee plus retainer, or a pure cost-per-hire model tied to annual volume.
RPO often starts making financial sense above roughly 30 to 40 hires per year. Below that level, contingency recruitment can be simpler and cheaper.
The line items people forget
| Term | What to check |
|---|---|
| GST | 18% applies to recruitment services and is added to the service fee. |
| Invoice trigger | Joining date is standard; fee on offer acceptance shifts drop-out risk to you. |
| Payment terms | Commonly 15 to 30 days from invoice. |
| Replacement guarantee | Confirm the window, resignation vs termination coverage, and replacement vs refund. |
| Ownership period | Six to twelve months is common for agency-introduced candidates; 24 months is excessive. |
| Candidate-side fee | Zero. Legitimate agencies are paid by employers. |
How to judge whether the fee is worth it
Do not compare the fee with zero. Compare it with vacancy cost and the cost of your own team doing the work.
For a role at ₹12 lakh annual CTC, a 10 percent fee is ₹1.2 lakh plus GST. Now price the alternative: portal subscriptions, 25 to 40 hours of recruiter and manager time, and several additional weeks with the seat empty. For revenue-carrying or delivery-critical positions, vacancy cost can exceed the fee quickly.
An agency is less useful for high-volume entry-level roles where referrals already work, or when you have a strong internal candidate ready.
Straight commercials, no hidden clauses
Hire Route offers clear fee structures with replacement guarantees across permanent recruitment, executive search, bulk hiring and RPO.
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Frequently asked questions
What percentage do recruitment agencies charge in India?
Most charge 8.33 to 12.5 percent of annual CTC for permanent mid-level hiring. Executive search commonly runs 20 to 33.33 percent.
Do I pay if the candidate does not join?
Under a contingency model, no. The fee is generally triggered by joining. Confirm this in the contract.
What happens if the candidate leaves in the first month?
Most agencies provide a free replacement inside an agreed window, commonly 90 days.
Is GST charged on recruitment fees?
Yes. GST is charged at 18 percent on the service fee.
Do job seekers pay recruitment agencies in India?
No. Employers pay recruitment agencies. A demand for money from a candidate is a red flag.
What is the difference between contingency and retained search?
Contingency is paid on successful joining. Retained search is paid in stages for committed and usually exclusive search work.
When does RPO become cheaper than per-hire fees?
Often above 30 to 40 hires per year, when dedicated recruiter capacity can cost less than paying a percentage for every hire.