Most hiring leaders can quote their recruitment fee percentage without blinking. Far fewer can explain what that fee actually buys them, or why it is structured the way it is. That gap is worth closing, because the fee model shapes behaviour long before a shortlist ever lands on your desk.
There are two dominant models in the South African market, and each has a quiet flaw baked in.
The percentage-of-salary model
This is the most common setup: an agency charges a percentage of the placed candidate's annual guaranteed package, usually payable once the person starts.
The logic seems fair on the surface. Higher-value roles take more work, so a higher fee makes sense. But look closer and the incentive gets skewed:
- The agency is financially motivated to push the salary up, not negotiate it down on your behalf.
- There is little incentive to find the most efficient, well-matched candidate if a more expensive one earns a bigger fee.
- Because payment is contingent on placement, agencies often work several clients for the same role at once, spreading effort thin and prioritising speed over fit.
None of this makes the model dishonest. It simply means the fee structure and your interests are not always pointing in the same direction.
The retained model
Retained search flips the payment timing: you pay in stages, often a third upfront, a third on shortlist, and a third on placement, regardless of salary tied percentages or fixed fees.
This buys focus. A retained search firm is usually working exclusively for you on that role, which matters for senior or hard-to-fill appointments. But the model has its own quiet cost:
- You carry the financial risk upfront, before any candidate has been seen, let alone hired.
- Because the early payments are secured regardless of outcome, there is less pressure on the agency to keep momentum once the first instalment clears.
- Retained fees are often priced for the most senior, most complex searches, even when the actual role is more straightforward.
Retained search rewards commitment on paper. It does not always guarantee commitment in practice, and the client absorbs the risk either way.
What both models miss
Neither structure ties the fee to what actually matters: whether the search is being run properly, by someone accountable for the outcome, at a cost that reflects the real work involved rather than the size of the salary or the size of the risk you are asked to carry.
A candidate on a higher package is not automatically harder to place. A retained search is not automatically more diligent than a contingent one. The fee model tells you how you are being charged. It does not tell you how well the search will be run.
A blended, partner-led alternative
At The Appointment Firm, we structure fees to reflect commitment rather than salary size or upfront risk alone. Every search is run by a partner, not handed to a junior consultant working a volume desk. Every shortlist is interviewed in person before it reaches you.
Our blended model combines elements of both traditional structures without inheriting their worst habits: you get the focus and accountability of retained search, without paying a premium simply because a role carries a higher salary, and without carrying all the risk before any real work has been shown.
The aim is simple. The fee should reflect the effort, seniority and complexity of the search itself, not act as a proxy for the candidate's pay packet or a hedge against the agency's own workload.
Compare it against your next vacancy
The easiest way to understand the difference is to test it against a real role you are hiring for right now. Bring us the brief, and we will show you exactly how our fee compares to a standard retainer or percentage structure for that specific appointment, no generic quote, no guesswork.
If you would like to talk through your next key hire and see what a partner-led, blended fee actually looks like in practice, get in touch. It is a conversation, not a pitch, and we are happy to have it before you commit to anything.
