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Placement Agency for Companies: How It Works, Fees and How to Choose One
A placement agency finds, screens and presents candidates for your open roles, and you pay only when a hire joins. In India the fee is typically 8.33% to 16.67% of annual CTC for standard roles, plus 18% GST, while fixed-fee deals charge a flat amount per hire. Choose on fee terms, guarantee, specialism and speed to shortlist.
Fee range: Standard Indian placements run 8.33% to 16.67% of annual CTC, plus 18% GST; retained executive search is priced far higher.
Model choice: A percentage fee is cheaper on junior pay and a fixed fee is cheaper on senior pay. Price both against your real CTC.
Speed: On CBREX, the typical first shortlist arrives within 24 hours of posting, and sourcing averages 4 to 48 hours.
Protection: Insist on a written replacement guarantee. CBREX offers 30 to 90 days after joining, depending on the level of hire.
Cross-border hiring: One contract that routes roles to vetted local agencies beats a separate contract and invoice in every country.
Question | Short answer |
|---|---|
What you buy | Sourcing, screening, shortlist and interview support for permanent hires |
Standard fee in India | 8.33% to 16.67% of annual CTC, plus 18% GST, paid after joining |
Fee abroad (USA) | Published ranges of roughly 15% to 35% of first-year base salary |
Retained search | Part of the fee paid upfront; one university career office lists 30% to 35% of first-year compensation |
Time to first shortlist (CBREX) | Typically 24 hours after the role is posted |
Salary below 100K (CBREX) | As quick as 10 working days from posting to offer |
Replacement guarantee (CBREX) | 30 to 90 days after joining, depending on level |
A placement agency recruits permanent staff for employers. It takes your brief, sources and screens candidates, presents a shortlist, supports interviews and the offer, and earns a fee when a person you choose joins. You keep the employment contract and the final decision; the agency does the search work.
The term overlaps with "recruitment agency", "manpower consultancy" and "search firm". The difference that matters is the engagement type. Recruiters generally work under three models: contingency, retainer, and time and materials. Placement work is mostly contingency, where the agency is paid on a successful placement.
A placement agency fills a permanent seat. A staffing agency usually supplies contract or temporary workers and bills a markup on their wages. Executive search targets senior leaders, often on retainer. If you need a permanent analyst, engineer or sales manager, you want placement.
Placement agencies suit three situations: niche skills that job boards do not surface, hiring in a country where you have no recruiters, and bursts of hiring your in-house team cannot absorb. They also reach passive candidates, people who are doing well in a current job and are not browsing listings.
A placement agency works in seven steps: agree the brief, source candidates, screen them, send a shortlist, support interviews, help close the offer, and stand behind the hire with a replacement guarantee. On CBREX, the first shortlist for a posted role typically arrives within 24 hours of posting.
Brief. You share role, location, pay band and must-haves. The agency should push back where the pay band does not match the market.
Sourcing. The agency searches its network and approaches passive talent. On CBREX, average time to source is between 4 and 48 hours.
Screening. A good agency pre-screens before you see anyone. CBREX adds a second layer: C Screen, an AI screener, then stack ranking. We measured its 98% accuracy across more than 10,000 cases.
Shortlist. You receive a small set of vetted profiles, not a pile of CVs.
Interviews. The agency schedules, collects feedback and manages candidate expectations.
Offer. The agency helps you close, including salary and notice-period negotiation.
Joining and guarantee. The fee falls due on joining. If the hire leaves early, the guarantee gives you a replacement.
Good candidates do not wait. For US sales and revenue roles, we tell clients to finish the process within three weeks of shortlist, because strong sales candidates have a short shelf life. In the EU, sourcing takes 24 to 72 hours and hiring takes about another three weeks. For roles with a salary below 100K, offers can come in as little as 10 working days.
Your side of the work is just as important. Give feedback within a day or two of each interview. Slow feedback, not slow sourcing, is where most searches lose their best candidate. Our guide to choosing a recruitment agency covers more of the warning signs.
Neither always costs less. A percentage fee rises with pay, so it is cheaper on lower-paid roles and costlier on senior ones. A fixed fee stays flat, so it wins on high salaries and loses on junior ones. Compare both on your actual CTC, including 18% GST, before you sign.
Feature | Percentage of salary (contingency) | Fixed fee per hire | Retained search |
|---|---|---|---|
When you pay | After the candidate joins | After joining, usually | Part upfront, rest in stages |
Cost rises with salary | Yes | No | Yes |
Risk if no hire | Low; you owe nothing | Low if paid on joining | High; upfront money is spent |
Best for | Junior and mid roles, many hires | Senior roles with predictable pay | Confidential, board-level searches |
Watch out for | Fee base: CTC or fixed pay only? | Whether the flat fee covers every location and level | Fees owed even when the search fails |
Suppose a mid-level role carries annual CTC of ₹12,00,000. At 8.33%, the fee is about ₹99,960; at 16.67%, about ₹2,00,040. Add 18% GST and the totals become roughly ₹1,17,950 and ₹2,36,050. The same agency might quote a hypothetical fixed fee of ₹1,50,000 plus GST for any role.
That flat fee equals 12.5% of the ₹12,00,000 role, so it sits mid-range. Now take a ₹30,00,000 role. At 8.33%, the percentage fee is about ₹2,49,900, so the fixed fee is cheaper. Take a ₹6,00,000 role and 8.33% is about ₹49,980, so the percentage wins.
If most of your roles sit below the break-even CTC, choose a percentage fee. If you hire senior people with similar pay, negotiate a fixed fee. Whichever you pick, ask what the percentage applies to. A fee on total CTC including variable pay costs more than a fee on fixed pay alone. For more on the percentage model, read our explainer on percentage-of-salary fees.
In India, placement agencies typically charge 8.33% to 16.67% of the hire's annual CTC for standard permanent roles, paid only after joining, plus 18% GST. Senior and niche roles cost more. Abroad, published ranges are higher, around 15% to 35% of first-year base salary in the USA.
The 8.33% floor equals one month's pay, and 16.67% equals two months. Published US ranges run from 15% to 35% of first-year base salary, with the most common direct-hire fee near 20%. Europe and APAC differ again by country and seniority.
Retained search is a separate price tier. The Yale School of Management career office describes executive search as client-paid upfront at 30% to 35% of first-year compensation. Compare that with contingency, where a failed search costs you nothing. We cover this tradeoff in our piece on agency retainer fees.
Sourcing and screening, with no separate "search" or "database" charges.
A replacement guarantee, stated in days, in the contract.
Interview coordination and offer support.
A clear statement of whether GST and expenses sit on top.
Pay for outcomes, not activity. Anything charged before a candidate joins is a retainer in disguise, even when it is called an "engagement fee".
Choose a placement agency by testing ten things: fee terms, replacement guarantee, specialism, local licence, speed to shortlist, screening method, candidate ownership rules, contract length, invoice clarity and how honestly it challenges your brief. Walk away from any agency that cannot answer in writing.
Fee terms. Pass: fee due only on joining, base and GST stated. Walk away: any upfront or "exclusivity" payment you cannot get back.
Replacement guarantee. Pass: a stated number of days and clear conditions. For reference, ours is 30 to 90 days after joining, depending on level. Walk away: a verbal promise.
Specialism. Pass: the agency can name recent placements in your function and country. Walk away: "we hire everything everywhere".
Licence and registration. Pass: documents on request. In Singapore, for example, we ask for MOM licence documentation at onboarding. Walk away: reluctance to show them.
Speed. Pass: a committed time to first shortlist, in hours or days. Walk away: "it depends" with no range.
Screening. Pass: the agency says how it vets before you see a CV. Walk away: raw CV forwarding.
Candidate ownership. Pass: clear rules on who owns a candidate if two agencies submit the same person. Walk away: fee claims after months of silence.
Contract length and exit. Pass: you can stop at any time without penalty. Walk away: automatic renewals.
Invoicing. Pass: one invoice, in a currency you can book. Walk away: surprise add-ons.
Honest feedback on your brief. Pass: the agency tells you when pay is below market. Walk away: an agency that says yes to everything.
The last point matters most. The most common mistake we see from India-based GCC heads in a first hiring brief is not benchmarking against market salaries: they want very high quality talent but do not pay at that level. A good agency says so in the first call. Our longer 10 criteria and 7 red flags article goes deeper if you are shortlisting vendors now.
Ask the agency to fix the term in writing before you brief it. If it refuses, drop it; there are always other agencies. With roles that need rare skills, a failed check on specialism is the one to take most seriously. See our guide to choosing an agency for niche roles.
Pay-on-hire routing means you sign one contract, post a role once, and an AI matcher sends it to the most relevant vetted agencies, with no retainer or upfront fee. You are invoiced only when a hire joins. CBREX runs this across 4,000+ specialist recruiting firms in 55 countries.
Without routing, an Indian company hiring in five countries signs five agency contracts, tracks five fee schedules and pays five invoices. That is the vendor sprawl we built CBREX to remove. Our single-invoice billing keeps finance out of the middle of every search.
Post once. You describe the role, location and pay band.
C Map matches. Our AI vendor matching routes the role to agencies that specialise in that skill and market.
Three-level screening. Agency pre-screen, then C Screen AI validation, then stack ranking.
You interview. Your ATS stays your system of record, since CBREX integrates with applicant tracking systems.
You pay on joining. No retainers, no seat licences, no upfront fees.
Coverage differs by location. We have 150+ monthly active agencies in Dubai, 18 active MOM-licensed agencies handling Singapore roles, 58 partner agencies covering software roles across East Asia, and 32 Mexico-based firms engaged monthly. Our first Mexico placement was in 2019, a digital account manager.
We have also filled roles in the US, Europe, APAC and India, and completed more than 50 country manager or head-of-market placements. If you need an employer of record to put the hire on payroll, our partners can handle EOR in over 90 countries. Placement and employment are separate jobs, and you can buy each on its own.
Most failed searches trace back to the brief, not the agency. Three errors come up again and again.
Ignoring local pay. The US is not one market. Salary and candidate catchment differ by state, and Indian founders often forget this in a first US sales brief.
Getting fixed versus variable wrong. Sales candidates read the split closely. A weak variable plan loses good people in the first call.
Paying below the quality you want. Asking for senior-level talent at mid-level pay stalls the search.
Our guide to building a US sales team from India shows how to set the split. And one point stays open: how many agencies to use per role. We lean on two or three specialists, though the right number depends on how scarce the skill is.
No. A placement agency fills permanent roles and charges a one-time fee, usually a percentage of first-year pay. A staffing agency typically supplies temporary or contract workers and bills a markup on their hourly or monthly wage. Some firms do both, so check which contract you are signing.
It varies by market and seniority. On CBREX, the first shortlist typically arrives within 24 hours, and roles with a salary below 100K can reach offer in as little as 10 working days. In the EU, expect 24 to 72 hours of sourcing plus about three weeks of hiring.
A replacement guarantee covers this. The agency finds another candidate at no extra fee if the hire leaves within the guarantee window. On CBREX the window is 30 to 90 days after joining, depending on the level of hire. Get the window and the conditions in writing.
Rarely. Most agencies are strong in one country or niche. A marketplace such as CBREX solves this by connecting you to local specialists through one contract. Our multi-geo hiring overview explains how that works in practice.
A placement agency is only as good as its fee terms, its guarantee and the brief you give it. If you hire in more than one country, you can skip the contract-per-country problem. Book a demo to see how a role posted once reaches vetted agencies and returns a first shortlist, typically within 24 hours.
Want to know what your current agency setup really costs? Calculate your Hidden Hiring Tax. If you run a recruiting firm and want to receive roles through our network, sign up as a recruiting firm, or talk to our team about your hiring plan.
