Direct Hire Fees Grew in 2014 With Pharma Paying Best

Note: A report for the staffing industry similar to those referenced here was released by Bullhorn earlier this year.

Direct hire fees are showing signs of stabilizing around the 21% of salary mark, while a tightening job market is growing the number of job orders yielding even higher fees.

A new report from BountyJobs says the average annual placement fee in 2014 was $22,113, a 6.3% increase over 2013, and 19.4% increase since 2010, when the recovery was just gaining steam.

Covering five years of data and some 35,000 job orders posted on the recruitment marketplace, the 2015 Direct Hire Agency Benchmarking Report provides the first look at some key placement trends among the mostly contingent search firms that are part of the BountyJobs network.

The report shows that at least on the network:

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  • The proportion of placements that paid fees of at least 25% of first first year salary rose from 20% in 2010 to 35% in 2014. This is strong evidence of a tightening of the market for certain in-demand jobs. “The pendulum is clearly swinging in favor of job candidates as
    employers are increasingly paying a premium for key talent,” says the report.
  • The pharmaceutical and biotech sector pays the heftiest fees, averaging $31,449 per placement last year.  That represents a one year increase of 10.8%, the largest of the tracked industry sectors.
  • Healthcare, one of the more common categories for agency placements, paid an average fee of $17,648 last year, the lowest of all the reported sectors. It was also one of the four sectors to show a year over year decline in fees.
  • Regionally, there is a wide variance in the average direct hire fee. Agencies in the West earned an average of about $24,000 per placement. In the Northeast, the average was closer to $21,000.

A report earlier this year from the Association of Executive Search Consultants estimated the retained search search and leadership consulting industry had worldwide revenue of $11.7 billion in 2014. That was a 10.7% increase over 2013.

“Annual revenue growth from 2013 to 2014 was supported by a 2.5% rise in the volume of new executive searches started in 2014 over the previous year as well as an increase in the value of individual search assignments, rising 2.9% in 2014 over 2013,” the AESC said in its annual report. “Similarly, the average revenue per consultant increased by 11% during 2014.”

North America accounted for 43% of the retained searches started last year, a decline of 1.3% from 2013, according to the AESC report.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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