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Most employers ask what a recruitment agency charges and get a percentage back. The percentage is the least useful part of the answer. What it is a percentage of decides the invoice, and that is where most disputes start.
A permanent placement fee is normally a percentage of the hire's first-year remuneration, paid once, after the person starts. Published examples sit in the mid-teens. Hays' published agreement with the University of South Australia, for example, sets permanent fees at 14% of total salary package including superannuation.
That last phrase matters more than the number.
The fee base is where two quotes that look identical turn out not to be. Check whether the percentage applies to:
Picture two agencies both quoting 15% for a Brisbane electrician on $105,000. On base only, that's $15,750. On base plus super ($117,600), it's $17,640. Add a vehicle valued in the package and it climbs again. Same percentage, a gap of several thousand dollars.
None of these is wrong. A good agency tells you which one applies before you see a CV, not on the invoice.
A guarantee or replacement period. If the hire leaves or is let go in the first few months, what happens? A free replacement and a partial refund are different things. Ask which, for how long, and what voids it. A guarantee with unstated conditions is not a guarantee.
Ownership terms you can live with. Most terms say a fee is payable if you hire someone the agency introduced within a set period, even into a different role. Know how long that period is.
When the invoice lands. Start date, or offer acceptance? How many days to pay?
With labour hire, you don't pay a placement fee. You pay an hourly charge rate that covers the worker's wage, super, workers' comp, payroll tax and the provider's margin. The worker stays employed by the provider.
In Queensland, labour hire providers must hold a licence under the Labour Hire Licensing Act 2017, and businesses must not use an unlicensed provider. The maximum penalty for a corporation is 3,000 penalty units. Check any provider on the public register before you sign. Permanent recruitment, where the person becomes your employee, is a different arrangement.
Only if the agency finds someone you wouldn't have found yourself. For trades that usually means passive candidates, people already employed who aren't reading job ads. Half of technician and trades occupations are in national shortage, so the person you need is more likely to be working for a competitor than scrolling SEEK.
If your ad is pulling licensed, local applicants, you probably don't need an agency. If it isn't, the fee is cheaper than the role sitting open. Our post on how long it should take to fill a trades role in Brisbane covers what "too long" looks like.
HJ Recruitment places permanent electrical, plumbing, HVAC and refrigeration, fire and solar tradespeople with Queensland employers. We put the fee base and guarantee in writing before the first CV goes out. If you're hiring, talk to us.
Sources- Hays - Fee agreement with University of South Australia (PDF)- Queensland Government - Labour hire licensing- Labour Hire Licensing Act 2017 (Qld)- Jobs and Skills Australia - Current skills shortages
