In short
Compare the two models on four axes, not one: total cost at a given tenure, when the cash actually leaves, what happens if the hire leaves early, and how much of the total is committed on day one. A single placement fee is cheaper in total once a hire stays long enough; a monthly fee spreads the cost, stops when the employment stops, and passes the one-off total at a crossover point you can calculate before you sign anything.
Key facts
- Compare on
- Total, timing, exit risk and commitment
- One-off fee
- Whole amount due at or near start date
- Monthly fee
- Percentage of gross monthly salary while employed
- The number that decides it
- The crossover month for your own figures
Why a single percentage comparison is misleading
Recruitment models are usually compared as two percentages — say a percentage of first-year salary against a percentage of monthly salary. Those numbers are not comparable, because they are charged against different bases over different periods.
The honest comparison needs a time axis. A one-off fee is a fixed amount, known on day one. A monthly fee is an open-ended series that stops when the employment stops, so its total depends entirely on how long the person stays.
The four axes that matter
Score any two proposals against these rather than against headline percentages.
| Axis | One-off placement fee | Monthly recruitment fee |
|---|---|---|
| Total cost | Fixed and known on day one | Depends on tenure — lower early, higher after the crossover |
| Cash timing | Concentrated in the month the hire starts | Spread monthly, alongside the salary itself |
| If the hire leaves early | Governed by a rebate window that usually tapers | Billing stops; payments already made are not refunded |
| Commitment on day one | The full fee | The agreed percentage, for as long as the employment continues |
| Budget line | One-off cost against the hiring budget | Ongoing monthly cost alongside payroll |
Neither column is universally better. Which one suits you depends on your cash position and how confident you are in tenure.
A comparison you can complete in ten minutes
Do this with your own salary figures and the actual percentages each supplier has quoted you in writing.
1. Convert both quotes into money
Write the one-off fee as a cash amount, and the monthly fee as a cash amount per month, both based on the salary you expect to offer.
2. Find the crossover month
Divide the one-off fee by the monthly fee. That is roughly the month in which the cumulative monthly total passes the one-off total.
3. Compare that month with realistic tenure
If you expect the hire to be there well beyond the crossover, the one-off fee is likely lower in total. If you are unsure, the monthly model carries less exposure.
4. Model the early-leaver case
Work out what each model costs you if the person leaves at month three, six and twelve — including the rebate terms as they are actually written.
5. Check the month-one cash total
Add the fee, the first salary, employer costs and equipment under each model. That figure, not the annual total, is what tests your runway.
Where each model genuinely wins
A one-off fee wins when you have the cash available, you are confident in long tenure, and you want the cost closed off in a single line. It is the simplest thing to explain to a board and the cheapest total for a long-serving hire.
A monthly fee wins when protecting monthly cash matters more than minimising the theoretical total, when you are hiring several people close together, or when you want the supplier's income to depend on the hire still being there in a year.
There is no version of this where one model is always cheaper, and any supplier who tells you otherwise is comparing the numbers they prefer.
Ask any supplier these before comparing
Get the answers in writing so you are comparing the same thing.
- Exactly what the percentage is charged against — first-year base salary, total package, or gross monthly salary.
- When the first invoice is raised, and on what payment terms.
- What happens to the fee if the hire leaves in month two, month six and month eleven.
- Whether there is any way to end an ongoing fee early, and what that costs.
- Whether the quoted figure is exclusive of VAT.
Common questions
- Is a monthly recruitment fee a form of finance or credit?
- No. It is a recruitment fee charged monthly rather than in one instalment. There is no lending, no interest and no credit agreement, and the candidate is employed directly by you on your own contract.
- Which model is cheaper overall?
- Neither, in general. Below the crossover point the monthly model has cost less; above it, the one-off fee has. The calculator shows the crossover month for your salary and the percentages you have actually been quoted.
- Can we switch models between hires?
- That is a commercial question for your supplier. With Startup Staffing the terms are agreed per client and confirmed in writing before work begins, so the right time to ask is before the first search starts.
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.