How Much Does a Headhunter Cost a Contractor?
A headhunter typically costs 20–25% of the new hire’s first-year salary, paid once per hire, which puts a $90,000 project manager at roughly $18,000–$22,500 in fees.
That fee comes with a guarantee that replaces the person if they leave early but almost never refunds your money.
This guide covers what contractors actually pay across headhunters, temp agencies and flat-fee recruiters, what the guarantee really means, the hidden cost most owners never see, and how to decide which model fits the hiring you do in a year.
What does a headhunter fee cost?
Headhunter: A recruiter paid a percentage of the hired candidate’s first-year salary, due when the person starts. No hire, no fee. Each hire is a new fee.
Contingency is the model most contractors run into. According to Indeed, the average fee is 20–25% of first-year salary, with a range from about 15% up to 40% depending on the firm and the role. Signing bonuses usually count toward the salary figure. Benefits usually don’t.
The fee buys you sourcing, screening, and an introduction. It does not buy exclusivity: contingency recruiters often send the same candidate to several companies at once, because they only get paid by whoever hires first.
Business owners we work with have told us they’ve paid $30,000 for a single placement. That isn’t an outlier for a senior estimator or a superintendent in a tight market.
Retained search: the other headhunter model
Retained search: An exclusive engagement where the company pays the recruiter in installments whether or not a hire is made. Typically 30–35% of projected first-year compensation, usually paid in thirds.
Retained search is built for executive roles. You pay a third up front to start, a third at the shortlist, and a third when the candidate starts. For a $200,000 operations executive, that’s $60,000–$70,000. For a contractor hiring a service tech and a project coordinator, it’s the wrong tool entirely.
What does the 90-day guarantee really mean?
Replacement guarantee: A promise that if the hire leaves within a set window, usually 30–90 days, the recruiter will run the search again at no charge. It is a replacement, not a refund.
This is the part of the contract owners misread most often. The guarantee sounds like insurance on the fee. It isn’t. If your $30,000 hire quits on day 60, the recruiter sends more candidates. Your $30,000 stays with the recruiter. If the hire quits on day 91, you’re on your own.
Some contracts also void the guarantee if you paid late, changed the job, or let the person go for reasons the recruiter considers yours. Read that clause before you sign, not after.
The hidden cost: a fee tied to salary
A percentage fee creates an incentive nobody puts on the invoice. The higher the salary, the higher the fee. So the recruiter is paid more when you pay the candidate more.
Here’s how that plays out. A candidate told us they were looking for $80,000. A headhunter presented that same candidate to a client at $100,000. Not a lie about the market, exactly. But the extra $20,000 raised the recruiter’s fee by $4,000–$5,000, and the client is paying that extra $20,000 every year the person stays.
Not every headhunter does this. But the structure rewards it, and you have no way to see it from the outside.
What does a temp or staffing agency cost instead?
Temp agency markup: A percentage added on top of the worker’s hourly wage. The agency is the employer of record; you pay the marked-up bill rate for every hour worked.
Temp agency markups typically run 25–75% on top of the worker’s pay, depending on the role and the market. A $25-an-hour worker at a 50% markup costs you $37.50 an hour. Part of that markup is real cost (payroll taxes, workers’ comp, insurance) and part is agency margin.
The catch for contractors: the agency’s business depends on you not hiring their people. If you want to bring a temp on to your own payroll, most agreements charge a conversion fee of roughly 15–25% of the worker’s first-year salary, sometimes prorated by how long they’ve been on assignment. It’s a headhunter fee by another name.
Temp staffing solves a crew-for-three-weeks problem. It does not solve a hiring problem.
Headhunter vs. temp agency vs. flat monthly fee
| Headhunter | Temp agency | Flat monthly fee | |
|---|---|---|---|
| How you pay | 20–25% of salary, once per hire | Hourly markup, 25–75% | One fixed amount per month |
| Hires per fee | One | None (they’re the agency’s employees) | Unlimited |
| If the hire leaves early | Replacement within 30–90 days, no refund | Send them back, keep paying markup | Keep hiring; the fee doesn’t change |
| Hiring their people | That’s the product | Conversion fee, 15–25% of salary | Every candidate is yours |
| Incentive on salary | Higher salary = higher fee | Higher wage = higher bill | None |
| Best for | One senior hire, once | Short-term labor | Several salaried hires a year |
How does a flat monthly recruiting fee work?
Flat monthly recruiting fee (subscription): A fixed monthly amount for an on-demand recruiting team that sources, screens and presents candidates for as many roles as you’re hiring. No placement fees, no per-hire charges.
The model flips the incentives. There is no percentage, so there is no reason to inflate a salary. There is no per-hire fee, so there is no guarantee window to argue about. You pay one amount per month, hire as many people as you need while the team is working for you, and stop when you’re done.
The way we explain it on calls: pay for twelve months and hire as many people as you want, for about what a headhunter charges to place two. And you don’t have to use all twelve.
The tradeoff is real and worth stating. If you make exactly one hire this year, a flat fee can cost more than a single contingency placement. The model wins when you’re filling several roles, when you don’t have anyone on staff whose job is hiring, or when you’re tired of paying the same fee again every time someone leaves.
Which model fits the hiring you actually do?
- One executive hire, and money isn’t the constraint: retained search is defensible.
- One mid-level hire this year and nothing else: contingency, and negotiate the percentage. It’s more negotiable than most owners assume.
- A crew for a few weeks: temp agency. Negotiate the conversion clause before the assignment starts, not after.
- Two or more salaried hires a year and no recruiter on staff: a flat monthly fee, almost every time. Do the math on your last twelve months of hires and it usually answers itself.
What to do with the quote in your hand
If a headhunter has quoted you, check three things: the percentage, what counts as first-year compensation, and exactly what the guarantee covers. Then add up every hire you made in the last twelve months and multiply by that fee. That number is what you’re comparing a flat fee against. If you want a second opinion on the math, send us the quote. We’ll tell you honestly which model comes out ahead for your situation, including when it isn’t us.
FAQ's
Is a headhunter fee negotiable?
Often, yes. The percentage is the most negotiable part, especially if you offer exclusivity or have several roles. The structure itself (one fee per hire, replacement-only guarantee) rarely changes. Ask for the fee to be calculated on base salary only, excluding bonuses.
Who pays the headhunter, the company or the candidate?
The company, in every legitimate arrangement. A recruiter who asks a candidate for a fee to place them in a permanent job is a red flag. The candidate never sees a bill, which is also why candidates don’t always know how the fee affects their salary negotiation.
How long is a typical recruiter guarantee?
Thirty to ninety days is standard, with ninety being common for salaried roles. It is almost always a replacement guarantee, not a refund. Some contracts add conditions that void it, such as changing the role or late payment, so read that section carefully before signing.
Does a flat monthly recruiting fee work outside construction?
Yes. The model is the same for any business that makes several hires a year and doesn’t have a dedicated recruiter. Construction is where Edisto started and where most of our clients are, but the math on fees is identical for a manufacturer or a service company.
What does Edisto charge?
One flat monthly fee with no placement fees and no long-term contract, quoted after a short call once we understand what you’re hiring for. 3k-5k month. The comparison we walk through is simple: twelve months of unlimited hiring, or two headhunter placements.
Sources:
Numbers in this guide come from the sources below and from Edisto’s own client engagements.
- Indeed: What Is a Headhunter Fee and How Much Does It Cost?
- contingency fee averages and range, what counts toward salary
- Engaged Headhunters: How Much Does a Headhunter Cost? — contingent vs. retained fee ranges, 2026
- LegalClarity: Who Pays the Headhunter Fee? — retained search installment structure, clawback clauses
- Leonar: How Much Do Recruitment Agencies Charge? — fee models compared, conversion fee proration
- The Resource Company: Average Staffing Agency Markup Report — temp markup ranges and what the markup covers
- USA Staffing Services: Temp-to-Perm Conversion Fee Guide — conversion fee ranges
- Client and candidate accounts are from Edisto Consulting Group’s own engagements; names withheld.
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