How Agency Placement Fees Work, Explained Plainly

What you are actually paying for, how the fee is calculated, and what should be included.

Agency fees can seem opaque from the outside, but the structure is straightforward once explained, and understanding it helps you compare firms and know what you are getting.

Most reputable agencies work in two parts. First is a search fee, a sum paid up front to commence the search. It covers the work of opening and conducting the search itself, recruiting, screening, presenting candidates, and is typically modest and non-refundable, since the work is done whether or not you ultimately hire. The search begins once that fee and the signed agreement are in place.

Second, and larger, is the placement fee, due when you hire someone the agency referred. This is almost always calculated as a percentage of the candidate's gross annual salary package, not the base salary alone. The package generally includes the salary plus elements like a health insurance allowance, housing allowance, relocation, and bonuses where those are part of the offer. Because the fee scales with the package, a more senior, higher-paid placement carries a higher fee, which is logical: a bigger, more specialized search is more work to fill well.

A few norms are worth knowing. International placements typically carry a higher percentage than domestic ones, reflecting the added complexity of cross-border recruiting and logistics. Placement fees are generally non-refundable and due at the time of offer and acceptance. And critically, the candidate never pays; the fee is the family's, and a firm that charges the professionals it places should give you pause.

The most important thing to ask is what the fee includes, and the answer that matters most is the guarantee. A strong agency includes a meaningful guarantee within the placement fee, so that if the placement does not work out within the covered period, it conducts a replacement search without a new placement fee. A fee without a real guarantee behind it is far less valuable than it looks.

Our fees

We believe in being transparent about how we are compensated, the way an executive search firm is. The figures below are typical, and we tailor them to the particulars of each search; we will always walk you through your specific terms in full before anything is signed.

To begin a search, there is a one-time application fee of $500, which opens and commences the work. Upon a successful hire, a placement fee is due, calculated as a percentage of the candidate's gross annual compensation package. For domestic placements, the placement fee is typically 20 percent of the gross annual package, with a minimum of $10,000. For international placements, it is typically 25 percent, with a minimum of $15,000, reflecting the added complexity of a cross-border search. Temporary and seasonal placements, and newborn care placements, are typically 25 percent, with a minimum of $1,000.

Should you have already found a candidate on your own and simply wish for the assurance of our screening, we offer our comprehensive background investigation as a standalone service for a flat fee of $2,500.

Every full-time placement fee includes our full-year guarantee. The candidate never pays a fee of any kind; our compensation comes from the family, which keeps our interest aligned with serving you and the professional well.

Viewed plainly, the fee buys a properly conducted search, thorough vetting, a well-matched candidate, and recourse if it goes wrong. Judged against the cost and disruption of a bad hire, or the hours of doing it all yourself, that is usually money well spent. We are glad to walk any family through our own fee structure in detail before anything is signed. At Nannies + more…®, it is simply how we work.