The Same 24 Hires, Priced Four Ways
Headhunter, temp agency, in-house recruiter, or flat fee. We took one client’s real year of hiring and ran the invoice through all four models.
TL;DR
One mechanical contractor made about 24 hires in 12 months. At typical contingency headhunter rates, that year costs roughly $312,000. Through a temp-to-hire agency, the markup alone runs into six figures, and the agency doesn’t want you hiring their people anyway. A full-time in-house recruiter runs around $100,000 a year whether you’re hiring that month or not. The client actually paid $39,600 on a flat monthly fee, with unlimited hires while the service was on. The right model depends on how many hires you make and how senior they are, and this post shows the math for each.
We’re the flat-fee option in this comparison, so don’t take our word for the numbers. The 24-hire year is a real client with a published case study, and the math for the other three models is shown on the page so you can rerun it with your own wages and salaries.
The year we’re pricing
Walker White Mechanical, a mechanical contractor, made about 24 hires in 12 months across office, field, service, and skilled-trade roles. Getting there took roughly 2,452 resumes reviewed, about 300 first-round screenings, and around 226 candidate no-shows absorbed along the way. That’s what a real year of hiring looks like for a growing contractor. Not one big executive search. A steady grind of service techs, project managers, office staff, and field leads, all year long.
So the question isn’t “what does a recruiter cost?” It’s “what does this year cost, depending on who runs it?” Here are the four ways to buy that year.
Model 1: The contingency headhunter
One fee per hire, percent of salaryThe default model. You pay nothing up front, then a percentage of first-year salary for each hire, typically 20 to 25 percent. On a $110,000 project manager, that’s a $27,500 invoice. On a $140,000 senior hire, $35,000. On a service tech, less per head, but the meter resets to full price on every single hire.
Run 24 hires through that model and the year lands around $312,000. That’s not a scare number we invented; it’s the client’s actual savings figure ($272K) added back to what they actually paid. We broke down the full headhunter math here, including the part owners find out the hard way: if the hire quits inside the guarantee window, you get a replacement, not a refund. Business owners have told us about paying $30,000 for a single placement and getting nothing back when it didn’t stick.
Model 2: The temp agency
Hourly markup on every workerFirst, the honest part: a temp agency is the right tool for a real problem. Six craftsmen for a three-week push? Call a staffing firm. That’s the model working as designed.
But run our 24 permanent hires through temp-to-hire and watch what happens. Take one $25-an-hour tech on a typical arrangement: a 50 percent markup through a 90-day evaluation period is about 520 hours at $12.50 of markup per hour, roughly $6,500 before that worker is yours. Multiply across 24 people and you’re around $156,000 in markup alone, and that assumes every agency lets you convert without a separate buyout fee. Many don’t, because their best workers are their income. The agency’s business model depends on you not hiring their people.
Model 3: The in-house recruiter
A full-time salary, hiring or notHire your own recruiter and the per-hire fees disappear. What replaces them is a salary, commonly $65,000 to $85,000 in most markets, plus payroll taxes, benefits, job board subscriptions, and sourcing tools. Call it roughly $100,000 a year all-in, and that’s for one person, with one network, who has probably never hired a pipefitter before.
Here’s the problem nobody prices: construction hiring isn’t steady. It surges in the spring, stalls when a project slips, and stops when the backlog thins. Your recruiter’s salary doesn’t stop with it. And when they take PTO, quit, or get poached, your entire hiring operation is a single empty chair. Now you’re recruiting a recruiter.
Model 4: The flat monthly fee
What the client actually paidThis is the model Edisto built for construction and the trades: one flat monthly fee, typically $3,000 to $5,000, with unlimited hires while the service is on. No placement fees, no percentage of salary, no contracts. The 24-hire year above cost this client $39,600 total. Hire number 24 cost the same as hire number one: nothing extra.
The on/off part matters just as much as the price. Another client, a general contractor, needed a Senior Superintendent and a Project Manager at the same time. They turned Edisto on for 60 days, hired both, and turned us off. Total cost: $6,000, against the $62,500 a headhunter would have quoted for those two roles. And every candidate either client met came with a recorded 15 to 30 minute interview first, so no manager burned an hour on someone who wasn’t worth it. Here’s how that process works.
The year, side by side
| Headhunter | Temp agency | In-house | Flat fee | |
|---|---|---|---|---|
| The 24-hire year | ~$312,000 | ~$156,000+ markup | ~$100,000 all-in | $39,600 actual |
| How you pay | % of salary, per hire | Hourly markup, every hour | Salary, hiring or not | Flat monthly, on/off |
| Cost of hire #24 | Full price again | Full markup again | Included | Included |
| If the hire leaves early | Replacement only | Send another temp | Recruiter re-runs search | Keep hiring, fee unchanged |
| Can you keep the people? | Yes, that’s the product | Usually a buyout fee | Yes | Yes, every one |
| Slow months cost | $0 | $0 | Full salary | $0, turn it off |
| Built for the trades | Sometimes | For temp labor, yes | Only if you hire for it | Yes |
How to actually choose
Match the model to your year, not to a sales pitch:
- Zero or one hire this year, and it’s senior: a contingency or retained headhunter is a legitimate call. Pay once, move on.
- A crew for a few weeks: temp agency. Full stop. That’s their job and they’re good at it.
- Hiring nonstop at real volume, 50-plus a year: build an in-house team. At that scale the salary math works.
- Several permanent hires a year, in waves, at a construction or trades company: this is where the flat fee wins the math by a distance, because every model that charges per hire or per hour punishes exactly the kind of year you’re having. That’s most of the contractors we work with.
And whichever direction you go, ask the two questions that expose every model fast: “What does my second hire cost?” and “What happens to my money if the hire doesn’t work out?” You’ll learn more from those answers than from any brochure.
Want your year priced this way?
Tell us what you’re hiring for and we’ll give you the straight math on your situation, including if another model on this page serves you better.
Talk With LoriFAQ
What’s the difference between a flat fee and a contingency recruiter?
A contingency recruiter charges a percentage of first-year salary for each hire, typically 20 to 25 percent, and the fee resets to full price on every hire. A flat-fee recruiter charges a fixed monthly amount that covers every hire made while the service is on. For one hire the difference is small. For several hires a year, the contingency model can cost five to eight times more for the same people.
Is hiring an in-house recruiter cheaper than a flat fee?
Only at high, steady volume. An in-house recruiter costs their full salary and benefits every month, including the months you’re not hiring. A flat monthly fee turns off when hiring stops. For a contractor making a handful to a couple dozen hires a year in seasonal waves, the flat fee is usually significantly cheaper and doesn’t depend on one employee.
Can’t a temp agency fill permanent roles too?
Some offer temp-to-hire, but the economics work against you: you pay an hourly markup during the evaluation period and often a conversion or buyout fee after it, because the agency earns money only while workers stay on its payroll. Temp agencies are the right tool for short-term labor, not for building your permanent team.
What if we only hire two or three people a year?
The flat fee still tends to win if those hires cluster together, because you can turn the service on for a month or two and then off. One client hired a Senior Superintendent and a Project Manager in 60 days for $6,000 total, then paused. A headhunter would have charged over $60,000 for the same two roles.
Leave a Reply