Why are recruitment fees non-refundable?

If you’ve ever used a recruitment agency, you’ve likely noticed that the fees are non-refundable. But why is this the case? Why would an agency charge a fee for their services that you can't get back, even if the candidate doesn’t work out?

These are questions that can concern you, especially when it’s the first time hiring a recruitment agency.

In this blog, we’ll answer these questions and break down why recruitment fees are non-refundable, what value agencies bring to the table, and how this system benefits both you and the agency in the long run.

What are recruitment fees?

When working with a recruitment agency, the fee is typically the cost for the agency’s time, effort, and expertise in finding the right candidate for your company. But these fees can vary depending on the service provided:

• Contingency fees: These are only paid if a candidate is successfully placed. Agencies are paid only if they make a hire. There are some types of hiring strategies that work out well with contingency fees.
  
  
• Retained fees: These are upfront fees, paid at the beginning of the recruitment process. Typically used for senior-level or hard-to-fill positions, these fees reflect the time and resources the agency invests in conducting a thorough search.

The whole process of hiring begins way before the candidate is admitted in your company. The reason these fees are often non-refundable is due to the significant investment agencies make in sourcing candidates, even before you’ve hired anyone. These fees cover everything from initial consultations and market research to sourcing, screening, and presenting candidates.

Why are recruitment fees non-refundable

One of the main reasons recruitment fees are non-refundable is the amount of time and resources that agencies invest in their search process. From the moment you sign up with an agency, they start dedicating time to researching candidates, networking, conducting interviews, and using tools that help vet potential hires.

Once an agency begins working on your role, they’re committing significant resources into the hiring process. In some cases, these searches can take weeks or even months to complete, especially for niche or senior-level roles. Recruitment is a big business that demands professionals, and the hours of these professionals cost money, it’s only natural.

These efforts involve not just advertising and job posting but actively headhunting, reaching out to passive candidates, and using a network built over years. Even if the process doesn’t result in a hire, the agency has already invested considerable time and expertise, which is why the fee is typically non-refundable. Consider it as an investment: you’re paying to get the best out of the job market.

How agencies add value through their fees

Recruitment agencies aren’t just middlemen—they bring a wealth of value to the hiring process. Here’s how:

1. Expert screening and vetting: Agencies don’t just sift through CVs. They interview candidates, conduct background checks, and often use psychometric tests or other tools to ensure the right fit for the role.

2. Access to passive talent: Many of the best candidates aren’t actively searching for jobs, but agencies can reach out to passive talent. This means you have access to a broader, often more qualified, pool of candidates than what you’d find on job boards or LinkedIn alone.

3. Market knowledge: Agencies have in-depth knowledge of the job market, including salary benchmarks, industry trends, and insights into what kind of candidates are available and where they’re located.

This is why the fee you pay is not just for the candidate you hire, but for all the hard work and value-added services that the agency delivers to streamline the recruitment process and ensure you find the right fit.

What happens if the candidate doesn't work out?

One common concern is: what if the candidate doesn’t work out? In that case, many agencies offer guarantee policies. These often include a replacement guarantee within a set time period—usually 30-90 days. If the candidate leaves or is terminated within that period, the agency will work to find a replacement at no extra cost.

However, the non-refundable fee remains in place because it covers the time and effort already invested by the agency in sourcing, screening, and presenting candidates. The guarantee covers the agency’s commitment to finding a suitable replacement, but it doesn’t mean that the original work done in the search process is refunded.

Client protections and agency accountability

It’s important to remember that recruitment agencies have accountability measures in place to protect clients. Before you engage with an agency, you’ll typically sign a clear contract that outlines the scope of the recruitment, the fee structure, and any guarantees regarding candidate replacements.

Additionally, agencies maintain transparency throughout the hiring process, keeping you informed every step of the way. This means you’ll always know how your investment is being spent and can trust that the agency is working diligently to deliver the best results for your business.

At the end of the day, recruitment agencies always want to provide your company with the best possible service. They know there's a lot at stake, that open roles can delay projects, slow down growth, and place extra pressure on your existing team.

A good agency doesn’t just want to fill vacancies; they want to build lasting partnerships, solve hiring challenges, and bring real value to your business. Fees reflect not just the work behind the scenes, but the accountability and results they aim to deliver.

Get the best recruitment service with Airswift

With Airswift, you can trust that the recruitment process is in capable hands. We work closely with you to understand your needs, ensuring that the candidates we present are the right fit for your business. Whether you're looking for permanent or contract staff, Airswift is committed to providing you with the best talent solutions, making the recruitment process seamless and efficient.

Reach out to us today and get the best recruitment for your business.