For a company that hires continuously, a flat monthly recruitment model is usually cheaper than contingency fees, because the cost stays fixed while the number of hires grows. At CPG Recruitment, founded in March 2020, we run recruitment for businesses across 25+ industries in Canada and the US, and the pattern is consistent: the more often a company hires, the more a per-placement fee costs it. Our founder, Christian Saab, recently spoke with an owner who had spent $200K on recruitment fees in a single year — a figure he estimates could have been cut in half under a flat-rate model.
How does contingency recruitment pricing work?
Contingency recruitment charges a fee only when a candidate the agency introduced is hired, typically calculated as a percentage of that person’s first-year salary. There is no cost up front, which is why it’s the model most employers start with.
That structure works well for occasional, hard-to-fill roles. The employer pays once, for one outcome. We cover when outside help makes sense in our overview of recruitment strategy for small and growing businesses.
Where does contingency pricing stop making sense?
Contingency pricing stops making sense when hiring becomes continuous rather than occasional. Every hire generates a new invoice, and every salary increase raises the fee. A company adding people every month is effectively paying full price for a recruitment department it never owns.
This is most visible in sectors with steady demand and built-in turnover, such as construction and healthcare. Individual invoices look reasonable. The annual total rarely does.
What does a flat monthly recruitment model include?
A flat monthly recruitment model includes the full recruitment function for one fixed price: all job postings, all interviews and all hires. The employer isn’t billed per placement, so filling a fifth or fifteenth role in a month doesn’t change the cost.
In practice, CPG’s done-for-you recruitment service operates as an embedded recruitment department:
• Postings — every open role is written, published and managed.
• Interviews — candidates are screened and interviewed through one consistent, documented process.
• Hires — offers and closing are handled without a per-hire charge.
The result is a recruitment department that exists from the first month, without the employer hiring and managing in-house recruiters.
How do the costs of each model compare over a year?
Over a year, contingency costs rise with every hire while a flat monthly rate stays the same, so the break-even point is reached quickly for any company hiring regularly. The simplest way to compare is to total the last twelve months of recruitment invoices and divide by the number of hires. That per-hire figure, set against a fixed monthly rate, usually settles the question.
The comparison should also include time. Fixed-rate recruitment teams run continuously, which removes the ramp-up at the start of each search. Using a consistent process, CPG has reduced average time-to-fill from 68 days to 37 — and every day a seat stays empty is a cost of its own.
Does a flat rate change the quality of candidates?
A flat rate tends to improve candidate quality, because the recruiter’s incentive shifts from closing placements quickly to filling roles correctly. Under contingency, revenue depends on a hire happening. Under a fixed rate, a poor hire simply creates more work, so there is every reason to get it right the first time.
Quality also depends on reach. When job postings don’t produce the right applicants, a standing recruitment team goes outbound to people already doing the work. We explain that approach in how outbound headhunting fills a role in another city.
Is a flat monthly model the same as RPO?
A flat monthly model is a form of recruitment process outsourcing: an external team owns part or all of the hiring function for a set fee. Traditional RPO is often associated with large enterprises and long contracts; a flat monthly model brings the same structure to small and mid-sized employers. Our explainer on what recruitment process outsourcing is covers the broader category.
Which companies are the best fit for a flat monthly model?
The best fit is any employer that hires every month or plans steady headcount growth. Companies filling one role every year or two are generally better served by a contingency fee, and we tell them so.
Useful signals that a company has outgrown per-hire pricing include: recruitment fees that approach the cost of an in-house recruiter, multiple searches open at once, and key roles being filled in a rush because no pipeline existed. For the founder’s perspective on why companies make this switch, read Christian Saab’s article why do smart companies stop paying recruiter finder’s fees?
Frequently Asked Questions
Is there a long-term contract with a flat monthly recruitment model?
Terms vary by provider and by the scope of hiring. The key comparison is the monthly rate against what the company currently spends on per-hire fees over the same period.
Can a flat-rate model cover both skilled trades and professional roles?
Yes. Because the fee isn’t tied to salary, one monthly rate can cover a mix of entry-level, trades and professional hires without the cost changing by role.
Who makes the final hiring decision under a flat-rate model?
The employer does. The recruitment team manages sourcing, screening and interviews, and hiring managers make the final call on every offer.
How quickly does a flat monthly recruitment team start work?
Work begins with a launch session to agree on the ideal candidate for each role. Once that profile is confirmed, postings and outbound sourcing start immediately.
How can your company compare the two models?
The fastest way to compare is to review your last year of recruitment spend with a specialist. Talk to CPG Recruitment about your hiring needs and we’ll show you what a flat monthly model would cost against your current fees. You can also learn more about CPG Recruitment’s services.