Placement Fee

A placement fee is the one-time amount a staffing agency charges for a successful direct-hire placement — the compensation for sourcing and delivering a permanent hire.

Placement fees are common in direct-hire and executive search, where the worker joins the client's payroll rather than the agency's. The fee is frequently calculated as a percentage of the hire's first-year compensation, though flat fees also exist.

Many agencies pair a placement fee with a replacement guarantee: if the hire leaves within a defined window, the agency refills the role or refunds part of the fee. The specifics are set in the contract.

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