In short
Model four scenarios before approving any recruitment supplier: the plan as written, the plan with every start a month late, the plan with one early leaver, and the plan with two starts in the same month. Then check the commercial mechanics — what the percentage is charged against, invoicing and payment terms, VAT treatment, what ends the obligation, and what happens if you stop using the supplier.
Key facts
- Model
- Base, slippage, early leaver, clustered starts
- Check the base
- First-year salary, package, or gross monthly salary
- Check the exit
- What ends the obligation, and at what cost
- Report
- Peak monthly outflow, not the annual total
Recruitment spend behaves unlike most supplier spend
It is lumpy, event-driven and triggered by a date you only partly control. It also sits next to the largest recurring cost in the business, so it lands in the same months as new payroll.
That combination means the useful review question is not "what does this supplier cost per hire" but "what does this supplier do to our cash profile under the scenarios that actually happen".
The four scenarios to model
| Scenario | What it tests | What to look at |
|---|---|---|
| Plan as written | Baseline affordability | Monthly outflow and cumulative total |
| Every start one month late | Sensitivity to slippage | Whether the peak simply moves or grows |
| One hire leaves at month six | Exit and recovery terms | Cash recovered, and cost of re-running the search |
| Two starts in the same month | Concentration risk | The worst single month across the plan |
Use your own salary figures and the percentages quoted to you in writing. Nothing on this site is a quote.
Commercial mechanics to confirm in writing
- What the percentage is charged against, defined precisely — base salary, total package, or gross monthly salary.
- Whether bonuses, equity, allowances or employer costs are included in that base.
- When invoices are raised, on what payment terms, and in which currency.
- The VAT treatment, and whether quoted figures are exclusive of VAT.
- What happens to the obligation if the employee leaves, is made redundant, or moves internally.
- Whether an ongoing fee can be ended early, on what notice, and at what cost.
- Whether the salary base is fixed at the start date or moves with pay rises.
- What happens if you stop instructing the supplier on new roles while existing placements continue.
One-off and ongoing spend read differently in your accounts
A one-off fee is a single large cost concentrated at a point in time. An ongoing monthly fee is a recurring cost that scales with headcount and continues while people are employed.
Neither is inherently better for reporting, but they are not interchangeable, and how each is treated in your accounts is a question for your own accountant rather than for a recruiter. What both need in your model is an accurate monthly timeline and an honest view of tenure.
Supplier due diligence worth doing once
- The contracting entity, its company number and where it is registered.
- Which entity invoices you, and whether that matches the contract.
- Insurance and data-protection position, including how candidate data is handled.
- Who the named point of contact is and what happens when they are unavailable.
- Whether terms are per-client and negotiable, or fixed and published.
Common questions
- Should recruitment fees be treated as one-off or recurring cost?
- That depends on the fee shape and on your own accounting policy, which is a question for your accountant. For planning purposes, model whatever the contract actually obliges you to pay, month by month.
- What is the single most important term to check?
- What ends the obligation. Everything else is arithmetic; that clause determines your exposure when a hire does not work out.
- Are the percentages on this site the rates we would pay?
- No. Every figure used in the calculators and examples is illustrative. Actual percentages and any buy-out values are agreed with each client individually and confirmed in writing before any work begins.
Sources
Where a fact in this guide comes from a document you can check yourself, it is listed here. We do not cite market statistics or benchmark data we have not published.
Model the cost of a hire
Put a salary in and see the illustrative monthly figure, the cumulative cost and the crossover point against a traditional fee.
Open the rate calculatorAny percentages or figures shown in this article are illustrative examples used to explain the model. They are not quoted rates, market benchmarks or salary data.