Recruitment Fees - Why Top Design Firms rely on Recruiters?

Scenario:

A client approaches a recruitment agency, recognising their experience and expertise in the Middle East market.

Client: “We value your experience as a former Project Manager and your employment with top Middle East companies.”

Recruiter: “Thanks! This is where we add value to our clients.”

Client: “However, your fees are too high. We prefer to pay one month’s salary as the recruitment fee.”

Recruiter: “That rate is too low for us to provide our services.”

Client: “But agency XYZ agreed to our terms. If you want the job, you NEED to agree as well.”

Recruiter: “Unfortunately, these terms don’t work for us.”

So, why is the fee set at the rate it is, and what does it actually cover? Let’s break it down.

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Time Investment

On average, it takes around 3-6 months to fill a role in the Middle East market. Considering that most clients have already reached out to 90% of the local talent pool, the search process needs to be both extensive and thorough.

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Here’s a breakdown of the time commitment involved:

• 1 week for searching: Identifying potential candidates who not only match the job requirements but also fit the company culture.
• 1 week for internal interviewing: Conducting initial interviews to shortlist the most suitable candidates.
• 1 week for the client to review: Allowing the client time to review and assess the shortlisted candidates.
• 1 week for client interviews: Coordinating and scheduling interviews between the client and the candidates.
• 1 week for the offer process: Managing the offer, negotiation, and acceptance process.

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Additionally, candidates typically have a 1-2 month notice period, and terms are generally 30 days after the start date, including a rebate clause. It’s also worth noting that even after all this work, clients may put roles on hold or change their minds, leading to wasted effort and resources.

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Competition

In the competitive Middle East market, especially while hiring in Dubai, clients often assign the same role to 5-10 agencies, both locally and internationally. This practice significantly reduces the chances of filling the role, making the recruitment process even more challenging.

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Recruiter Costs

Recruitment firms in Dubai work on “contingent,” basis meaning agencies work “pro bono” until the position is filled. During this time, they still have to cover various expenses such as:

• CRM systems
• Salaries for recruiters and support staff
• LinkedIn subscriptions
• Other overhead costs

All these expenses are incurred with the understanding that there may be no revenue generated if the role isn’t filled.

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The Reality of Recruitment Fees

Let’s break down a typical market rate. For example, a 15% fee on a role with a salary of AED 25,000 would result in a fee of AED 45,000. When spread over a 6-month period, this amounts to AED 7,500 per month. After accounting for salaries, commissions, and other costs, it becomes clear that operating a business at an 8% fee is unsustainable—unless you’re a one-person operation.

Adding to the complexity, some clients may take up to 6 months to pay, further straining the agency’s resources. This delayed payment adds another layer of financial pressure, which is often overlooked when negotiating fees.

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The Bottom Line

Everyone wants a good deal, but it’s important to remember that quality work comes at a price. The expertise, time investment, and resources required to deliver high-quality recruitment services justify the fees charged. When agencies are forced to work at unsustainable rates, it can lead to rushed or subpar work, ultimately affecting the quality of candidates presented.

In the end, the adage holds true:

‍Quality work isn’t cheap, and cheap work isn’t quality.

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By understanding the true cost of recruitment and the value that experienced agencies bring, clients can make more informed decisions and build stronger, more effective partnerships.

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