How recruiting agency fees actually work

Most engineering recruiting runs on contingency: the agency charges a percent of the hire's first-year base salary, and you pay nothing unless someone you hire through them starts work. Typical rates land between 15 and 25 percent, with 20 percent common for software engineering roles. A retained search works differently, splitting that fee into upfront installments you pay whether or not a hire lands. This post breaks down both models, what a replacement guarantee actually covers, and exactly what the number means on a real offer.

The short version: with contingency you carry no cost and no risk until a hire starts, which is how roles.cc charges. With a retainer you pay in installments for dedicated, exclusive search effort. Knowing which one you are signing, and what the guarantee period buys you, is the difference between a clean invoice and an argument three months later.

What does a contingency recruiting fee cost?

A contingency fee is a percentage of the candidate's first-year base salary, billed once when they start. Base salary, not total compensation: equity, signing bonuses, and projected commission are normally excluded unless your agreement says otherwise. Get that definition in writing, because the gap between base and total comp can be large for senior engineers.

Here is the math on a senior software engineer offer in San Francisco or New York (illustrative, not advice):

That $38,000 is the whole cost. No upfront payment, no monthly retainer, no charge for the candidates who interviewed and passed. If the offer is $150,000, the same 20 percent is $30,000. If it is $240,000, it is $48,000. The fee scales with the salary because the salary is the proxy for how hard the role was to fill. For the going rate on engineering salaries by level and city, see senior software engineer salary in SF and NYC.

Contingency vs retained: which one are you signing?

The two structures answer different problems. Contingency spreads the agency's risk across many searches and pays out only on the ones that land. Retained search concentrates effort on one hard role and asks you to share the risk in exchange for exclusivity and priority.

For almost every engineering hire at a venture-backed startup, contingency is the right structure. You are not searching for a one-of-a-kind CTO. You are hiring strong software engineers, and you should not pay for that until one shows up and starts. Retainers earn their keep for genuinely scarce roles where the agency needs guaranteed compensation to justify weeks of dedicated work. For more on the trade-off, see contingency recruiter vs in-house startup hiring.

What are deposits and retainers actually for?

A deposit (sometimes called an engagement fee) is money paid before the search starts. On a retained search it is the first installment, often one third of the total, and it is usually non-refundable if you simply change your mind. A pure retainer goes further: you pay scheduled installments regardless of outcome, the classic structure being one third on signing, one third at a shortlist or interview milestone, and one third on hire.

What you are buying with that money is commitment and exclusivity. The agency works your role first, declines competing searches that would conflict, and is paid for the effort rather than only the result. That is reasonable for a rare hire. It is a poor trade for a role that several good recruiters could fill on contingency, because you have converted a no-risk arrangement into a guaranteed bill.

What does a replacement guarantee actually cover?

A replacement guarantee protects you if a hire does not work out early. If the engineer leaves or is let go within a defined window, the agency runs the search again at no additional fee. Guarantee periods commonly run 60 to 90 days, sometimes 6 months. Read three details before you trust it:

• Length of the window. 90 days is standard for engineering roles. Shorter than 60 is thin.
• Replacement or refund. Most guarantees promise a free re-search, not your money back. A few offer a prorated refund instead. Know which you have.
• The carve-outs. Guarantees typically void if you lay off the role, restructure the team, or miss payment. Layoffs are the one founders forget, and they are common in a downturn.

A worked example (illustrative, not advice). You hire an engineer at $190,000 base, pay the $38,000 fee, and they resign on day 70 of a 90-day guarantee. Under a replacement guarantee, the agency restarts the search and places a new engineer with no second fee. Without that clause, you would pay again. The guarantee is the part of the deal that protects you from paying twice for one seat, so it deserves as much attention as the headline percent.

What are you actually paying for?

It is fair to ask what a 20 percent fee buys when public job boards are free. The honest answer is sourcing and filtering, not access. A good agency spends its time on the work you do not have time for:

1. 01Sourcing engineers who are not applying. The strongest candidates are employed and not browsing. Reaching them is outbound work, not inbound applications.
2. 02Screening before you spend interview hours. A loop with five engineers, four of whom should not have reached you, is the real cost of a bad funnel. Filtering protects your team's calendar.
3. 03Closing the offer. Counteroffers, competing processes, and equity questions sink accepted offers. Getting a yes to stick is a skill, covered in how to make a startup offer candidates accept.
4. 04Carrying the risk. On contingency, every unfilled search and every candidate who passed costs the agency, not you.

That last point is the whole logic of contingency. The agency is betting its own time that it can fill your role, and it only collects if it wins the bet. You are paying for outcomes, not activity. For a fuller picture of timelines and what the process feels like from your side, see how a recruiting agency placement works for engineers.

How roles.cc charges

roles.cc is a contingency agency for software engineers at venture-backed startups. We charge a percent of first-year base salary, billed once when your hire starts, and the engagement carries a replacement guarantee. There is no deposit, no retainer, and no charge for candidates who interview and do not get an offer. If no one is hired, you owe nothing.

The public board is the front of that. It lists engineering roles pulled straight from each company's own job site, sorted by how recently the company raised, because a fresh round is the strongest signal that a team is hiring and can move. Engineers use it free and drop their CV into our pool. When you are hiring, we match against that pool and represent vetted candidates to you.

If you are deciding between an agency and building an in-house pipeline, the numbers in how recruiting agency fees compare to in-house cost are worth running against your own. The fee is real money. So is the cost of a senior seat sitting open for four months while you screen resumes yourself.