BountyJobs Research will release its annual analysis of direct hire agency fees later this month, but a preview of the highlights gives startling insight into the economic narrative emerging for 2015.
Beneath the widely reported, moderately strong, growth in jobs last year was a remarkable surge in demand for highly skilled candidates and the agencies that get paid to find them.
Direct hire agency fees are typically offered as a percentage of a candidate’s first year’s salary, and have long been an indication of where the high end of the job market is heading. These types of recruiting fees are only paid if the company hires the agency’s candidate. Jobs filled this way typically have an average salary of $100K and higher, with average fees of 20%.
BountyJobs itself is the industry leading SaaS platform that employers of all sizes use to consolidate and improve their recruiting agency activity. The company is used by brand name recruiting departments in every industry across the US to benchmark agency performance.
Agencies on the BountyJobs platform will earn well over $60m in fees in 2015, making it larger than all but six of the largest recruiting agencies in the US.
Amongst the key findings in the report:
- Record agency results were driven by strong fees, and even stronger salaries, in 2014. The average dollar agency fee collected in 2014 was $22,113, 6.3% higher than the average fee in 2013 ($20,793) and 29% higher than average fees during the depth of the recession in 2008. Agency fees as a percentage, however, stayed relatively flat at 21.2% of first year salary, as compared to 21.0% in 2013.
After a brief stumble in 2008 (when fees declined from 20.2% in 2007 to 19.7%), fees as a percentage have steadily risen every year. Fees as a dollar amount, however, surged in 2013 and 2014, reflecting the strength in salaries offered.
- The percentage of “premium fees”, offered at 25% or above, is at an all-time high. Although recruiting fees have leveled dramatically thanks to transparency and competition,the best recruiting agencies still command higher fees for premium candidates. Accepted wisdom (backed by data) in recruiting circles is that 20% is the “accepted average”, but premium fees of 25% or higher are considered the bellwether for the hottest industries, jobs and candidates.
Back in 2008, 26% of all fees were premium fees, a number that dipped even lower to 20% in 2010. In 2014, however, the percentage of premium fees jumped sharply to 35%. The trend has been evident for several months: premium fees were 31% of all fees on the marketplace in 2013.
- Pharma in the driver’s seat. Recruiting agencies in the pharmaceutical and biotech space commanded the strongest fees in 2014, topping all industries with an average fee of $32,347. Fees in Semiconductors ($31,507) were just a step off the pace, while fees in Financial Services ($25,627) and Information Technology ($25,463) were 3rd and 4th place, respectively.
Will fees in the Energy sector, the 5th strongest industry in 2014 (vs. $22,306 in 2013), drop back in early 2015 due to weakness in oil prices? Which jobs or industries are losing steam, and why? Which jobs are hot? Stay tuned for the full BountyJobs Research report and analysis coming out later this month!