Is Our Recruitment Consultancy Overcharging? Seeking Market Rates for Service Fees

I would like to know what is the bare minimum Professional Service Fee for Permanent Positions if we go with the recruitment consultancy.

Our company is appointing a manpower consultancy who is charging Professional Service Fee equivalent to 8.33% of the annualized salary of the personnel. Annualized salary includes fixed monthly salary, PF contributions, Housing Rent Allowance, Fixed Conveyance or Lunch allowance, and any compensation that is fixed (example: fixed bonus salary) + service tax. It does not include any variable or indeterminable portion, (example like variable sales commissions or medical benefits).

My management has said to find what is the market rate as this consultancy is charging much. Please provide some rates.

Normal market charge is 8.33%. It only depends on the experience; the charges will increase up to 12%.

We are recruiting labor for the industry. According to our management, the labor class does not require such a degree, and the requirement is in bulk. Please suggest, can we negotiate with him.

Since you are recruiting in bulk and primarily concerned with laborers who are semi-skilled or less, consider opting for a public advertisement that outlines your requirements. This approach can lead to reduced costs, as you will only need to cover the expenses associated with arranging the interview venue. However, it is crucial to exercise caution when it comes to documentation and verifying the accuracy of the candidates' details.