The Truth About Recruitment Fees in the UK Charity Sector – What Are You Really Paying For?

Ask ten charities what they pay in recruitment fees and you’ll hear the same thing again and again:

“About 15–20% of salary… but we’re not totally sure what we’re actually paying for.”

In the UK, standard recruitment agency fees for permanent roles are usually charged as a percentage of first-year salary – most commonly 15–20%, and often higher for specialist or senior posts.

For a £40,000 hire, that’s £6,000–£8,000 out of your budget – money that could otherwise go into services, campaigns or front-line delivery.

In this article I’ll break down:

• How those fees are actually made up
• What percentage is typically pure profit
• Why rebate clauses and guarantees are often far murkier than they look
• And how my model – a simple £4,000 fixed fee with a 6-month free replacement guarantee – is designed to be transparent and charity-friendly.

1. How traditional UK recruitment fees work

Most agencies in the UK (including those specialising in charities and non-profits) follow the same basic model:

• Fee = X% of the candidate’s first-year salary
• X usually = 15–20% for standard roles; can reach 25–30% for senior or hard-to-fill posts.

Example – a common charity scenario

• Role: Fundraising Manager
• Salary: £40,000
• Agency fee at 18%: £7,200
• Agency fee at 20%: £8,000

Even when agencies advertise “charity rates”, the structure is usually the same – just a slightly lower percentage but still tied directly to salary rather than effort or outcome.

2. Where does your fee actually go?

This is the part most agencies never spell out.

Industry benchmarking and accountancy data for UK recruitment businesses shows a fairly consistent picture:

• A widely used model is the 60:20:20 split of Net Fee Income (your fees): ~60% to staff costs (consultants’ salaries and commission) ~20% to overheads (rent, tech, marketing, compliance, directors’ pay, etc.) ~20% retained as operating profit.
• Separate analysis of agency financials suggests a “good” net profit margin for a recruitment firm sits around 15–30%.

So, for every £1,000 you pay in fees, a typical breakdown on average looks something like:

• £550–£600 – recruiter salaries and commission
• £200–£250 – overheads (offices, tech, admin, marketing, director salaries)
• £150–£200 – profit to the agency

In other words, on a 15–20% fee, agencies are typically making around 15–20% net profit on the fee itself.

Putting real numbers on it

Take that £40,000 fundraising role again:

• At 15% fee → £6,000 invoice Rough profit slice (15–20%): £900–£1,200
• At 20% fee → £8,000 invoice Rough profit slice (15–20%): £1,200–£1,600

Multiply that across multiple hires in a year and you can see how agencies can generate very healthy profits from charity recruitment – even before you factor in that some agencies reuse the same talent pools and shortlists across multiple clients.

By contrast, the UK recruitment industry as a whole has historically reported strong gross profit levels (c.17% gross profit on turnover on nearly £39bn of activity in one REC report), showing that even in tougher years, this is a sector that knows how to monetise its model.

3. Why this hits charities particularly hard

Charities and non-profits often:

• Recruit for roles in fundraising, services, policy and operations where salaries are squeezed
• Operate with fixed or grant-based budgets
• Are accountable to donors, trustees and regulators about how money is spent

Yet, many charity-focused agencies still charge:

• Standard permanent fees of 15–20% of salary, just like commercial sectors – sometimes with a small “charity discount” but not a different underlying model.

So, for a charity, a typical year might look like this:

• 1 x Head of Fundraising @ £60k
• 2 x Fundraising Managers @ £40k
• 1 x Communications Manager @ £38k

If recruited at 18% fees, that’s:

• £60k → £10,800
• £40k → £7,200 (x2 = £14,400)
• £38k → £6,840

Total in recruitment fees: £32,040

Using the typical profit ranges above, somewhere in the region of £4,800–£6,000 of that could easily be net profit to the agencies – money not going into programmes, staff wellbeing, or service expansion.

4. The murky bit: rebate clauses and “guarantees”

Most agencies will tell you they “stand by their placements” and “offer a guarantee”. But the small print is where things get murky.

How rebates usually work

Common features in UK recruitment contracts:

• A rebate period of around 8–12 weeks (sometimes slightly longer for premium packages)
• A sliding scale refund – for example: 100% refund if the candidate leaves in the first 2–4 weeks Then dropping step by step (e.g. 80%, 50%, 20%, 10%) until week 8–12
• Strict conditions such as: You must pay the invoice on time You must notify the agency within 7 days of resignation The candidate must have left for specific reasons Sometimes an “admin fee” is deducted from the rebate

Real UK examples include sliding scales over 8–12 weeks, with full refunds only in the very early weeks, and partial rebates thereafter – often only if every contract clause has been met.

What this means in practice

For charities already stretched for time and resource, that often means:

• You don’t claim the rebate at all because the process is fiddly and time-bound
• You only get a small percentage back by the time the person leaves
• Or you’re offered a “replacement” that doesn’t really fix the underlying problem

The end result: risk sits with you, not the agency – even though you’ve paid a very high % fee up front.

5. A different approach: a simple, transparent, charity-first model

Here’s how my model is designed specifically to fix these problems.

1. A flat £4,000 fee, not a percentage

Whether the salary is £30k or £60k, the fee is:

£4,000 + VAT – clearly agreed upfront.

Let’s compare.

Example 1 – £30k salary

• Traditional 18% fee: £5,400
• Approx. agency profit slice (15–20% of fee): £810–£1,080
• My fee: £4,000
• Immediate saving for the charity: £1,400 (plus you know exactly what you’re paying for)

Example 2 – £40k salary

• Traditional 18% fee: £7,200
• Approx. profit slice at 15–20%: £1,080–£1,440
• My fee: £4,000
• Saving: £3,200

Example 3 – £60k salary

• Traditional 18% fee: £10,800
• Approx. profit slice at 15–20%: £1,620–£2,160
• My fee: £4,000
• Saving: £6,800

The work involved in running a robust, values-led process for a £40k and a £60k role is broadly similar – so why should your fee almost double just because the salary does?

2. A 6-month free replacement guarantee

Instead of complex rebate maths and sliding scales:

• If your new hire leaves or doesn’t pass probation within 6 months,
• I will run the process again and replace them at no additional fee.

No admin charge. No sliding percentages. No legal gymnastics. Just a clear commitment that I share the risk with you.

3. Radical transparency about where your money goes

I build all costs and a modest, sustainable profit into that £4,000 set fee. You know:

• Exactly what you’re paying
• Exactly what you’re getting
• That I’m not quietly increasing my earnings just because your salary band moved up or you’ve approved a market adjustment

6. Why this matters for charities

For the charity and not-for-profit sector, recruitment is not just a transaction – it’s a question of stewardship:

• Every pound you spend on fees is a pound you’re not spending on your mission
• Donors, funders and trustees increasingly expect clarity and value for money
• Staff and candidates care whether organisations are spending responsibly

Traditional percentage-based fees and opaque rebate structures were designed for a different world – one where margins mattered more than impact, and “that’s just how it’s done” was enough of an answer.

It doesn’t have to be that way.

7. The bottom line

To sum up:

• Typical UK agency fees are 15–20% of salary, often higher – even in the charity sector.
• On those fees, agencies commonly target 15–20% net profit after costs – so a noticeable chunk of your budget becomes pure profit.
• Rebate clauses and “guarantees” are usually short, conditional and complex – putting most of the risk back onto you.
• A flat £4,000 fee with a 6-month free replacement guarantee gives you: Predictable cost, a fair balance of risk, and a clear line of sight between what you pay and the value you receive.

If you’re a charity leader, HR manager or hiring manager, the next time you’re presented with a 15–20% fee and a dense rebate clause, you’re entirely within your rights to ask:

“How much of this is really paying for value – and how much is just feeding a model that doesn’t fit the charity sector anymore?”