Recruitment pricing in India is more standardised than most buyers expect, but the quote you receive depends on which of three models the agency works under. Contingency recruitment is paid only on a joining. Retained search is paid in instalments whether or not the role closes. Contract staffing is a monthly markup, not a one-off fee. Confusing them is how employers end up comparing a 10% quote with an 8% quote that are not measuring the same thing.
The contingency success fee
Most recruitment agencies in India work almost entirely on a success-fee basis: you pay only when a candidate you selected joins. The benchmark for junior and mid-level roles is one month’s gross salary, which is quoted as 8.33% of annual CTC — one twelfth of the year. That figure is so widely used that agencies rarely defend it; it is the floor of the market rather than a negotiated position.
The fee rises with difficulty. Senior or hard-to-fill roles typically run 12% to 20% of annual CTC. Where an agency quotes at the top of that band it is usually because the role needs headhunting from named competitors rather than sourcing from job portals, or because the candidate pool is small enough that the agency expects to work the mandate for months.
Placement consultancies working on high-volume, lower-salary hiring price differently again. The same 8.33% is common, but so is a flat amount per hire — commonly between ₹5,000 and ₹25,000 for lower salary bands — because a percentage of a small CTC does not cover the cost of the work.
Two things are true of every contingency quote. Fees are payable on joining, not on offer, and GST at 18% is added on top of the fee. A 10% quote on a ₹12 lakh CTC is ₹1.2 lakh plus ₹21,600 of GST. Budget for the gross figure.
Retained search for leadership roles
Executive search is retained rather than contingent, which changes the economics on both sides. Indian retained fees generally run 25% to 33% of first-year CTC, billed in three instalments: on signing the mandate, on presentation of the shortlist, and on offer acceptance. A minimum fee floor applies, often starting around ₹5 lakh, because the work of mapping a market and approaching passive candidates costs roughly the same whether the role pays ₹40 lakh or ₹1 crore.
You are buying process rather than résumés. The retainer commits the firm to a market map, a defined research effort and an exclusive mandate; it also means the first tranche is spent whether or not you hire. For a genuinely confidential replacement, or a role where you need to know who the market’s twenty candidates are rather than the four who applied, that is the right trade. For a role three agencies could fill from their databases, it is not.
Guarantees are longer here. Most retained firms offer a free re-search if the executive leaves within six to twelve months, charged at expenses only. Check whether it covers resignation as well as termination, and whether it lapses if you change the reporting line.
Replacement guarantees
The replacement clause is the part of the contract that decides what your fee actually bought, and it is the clause most worth reading before signing.
- Placement consultancies commonly offer a free replacement if the joiner leaves within 30 to 60 days. On flat-fee volume hiring, some instead credit the fee against your next placement rather than replacing the person.
- Recruitment agencies more often work to 60 to 90 days, which is the standard window across the market.
- Retained search firms run six to twelve months, on a re-search rather than a refund basis.
Three questions settle the clause. Does the guarantee cover one replacement or unlimited attempts? Does it apply only to resignation, or also to termination for performance? And does it survive a change in the role’s scope after joining? A 90-day guarantee limited to a single attempt for resignation only is a weaker promise than a 60-day guarantee with no such carve-outs.
Contract staffing and manpower supply
Contract staffing is priced as an ongoing markup, not a placement fee, because the worker sits on the staffing firm’s payroll. The firm’s service charge usually runs 6% to 12% of the worker’s gross salary, invoiced on top of the actual salary, employer provident fund, ESIC where applicable, and gratuity provisioning — all of which should appear as separate lines on the monthly invoice. GST at 18% applies to the whole invoice value, not just the service charge.
Within that band, service charges tend to sit at 5% to 8% for blue-collar manpower and 8% to 12% for skilled or professional contract staff, reflecting the recruitment effort behind each placement. Manpower consultancies supplying labour often quote differently again: either a fixed per-head monthly rate that bundles wages, PF, ESIC and bonus with their margin, or a service charge of 5% to 10% over the statutory wage cost. The bundled rate is easier to budget and harder to audit; the itemised one is the opposite.
If you later want to move a contract worker onto your own payroll, ask about conversion up front. Most agencies allow it after a notice period, sometimes with a one-time fee equal to a percentage of annual salary where the transfer happens within the first six to twelve months.
What moves the number
- Seniority and scarcity. The single biggest driver. A role that requires approaching people who are not looking is priced as search work, wherever it sits on the org chart.
- Niche skills and regulated roles. Specialist mandates carry their own premium — for example, hiring regulatory heads with international inspection experience in pharmaceuticals is quoted well above a general management rate.
- Location. Roles requiring relocation to a smaller city, or hiring into a location where the agency has no existing network, take longer and are quoted accordingly.
- Volume and exclusivity. An annual commitment or an exclusive mandate is the most reliable way to move a rate down. Briefing three agencies on the same role rarely lowers a fee; it just splits the effort.
- Payment terms. Whether the fee is due on joining or on offer, and whether you get a staged payment on completion of probation, is often more negotiable than the headline percentage.
One thing should never appear on either side of the transaction: a fee charged to the candidate. In legitimate recruitment the employer pays. Candidate fees are a common complaint against unregistered consultancies and should be treated as a warning sign about the agency, not a discount on your invoice.
This is general information, correct as at September 2026, and not legal or commercial advice. The ranges above are market norms rather than quotes; confirm terms in writing with the agency before you brief a role.
Find help
- Compare recruitment agencies in India by sector, hiring level and rate band.
- For leadership mandates: executive search firms in India.
- If the requirement is a monthly headcount rather than a hire: contract staffing companies.