Almost nobody publishes this. Ask three engineering recruitment agencies what they charge and you will get three answers, all of them delivered on a call rather than in writing, and none of them easy to compare. Here is the market, plainly, and the parts of a fee agreement that cost more than the percentage.
The three models, and what each actually costs
Almost every recruitment agency in Canada works one of three ways.
Contingency. The agency is paid only if you hire someone they introduced. Market rate runs roughly 15–25% of first-year base salary. On a $110,000 engineering role that is $16,500 to $27,500. Nothing is owed if you hire nobody, which is why it is the default for most mid-market hiring.
Retained. The fee is committed up front and paid in instalments — commonly a third to start, a third on shortlist, a third on placement. Rates run 20–35%, and the model is standard for executive search and genuinely scarce roles. You are buying dedicated capacity rather than a lottery ticket.
Contract and interim. Charged as an hourly or daily margin on top of the contractor’s rate, typically $50–$200 per hour all-in depending on discipline and seniority.
Rates move with scarcity and with geography. Agencies quote higher in Toronto and Vancouver than in London or Winnipeg, and higher for disciplines where the candidate pool is genuinely thin — structural, electrical power, environmental permitting — than for roles that attract applications.
What the percentage is calculated on
This is where quotes stop being comparable, and it is the first question to ask.
A fee quoted at 18% of base salary and a fee quoted at 18% of total first-year compensation are not the same fee. If the package includes a signing bonus, a car allowance, a guaranteed first-year bonus or a relocation payment, the second number can be several thousand dollars higher on the same hire.
Get the definition in writing before you compare anything. A recruiter quoting a lower percentage on a broader base can easily be the more expensive of two options.
The guarantee is where the real difference sits
Every agency offers a replacement guarantee. They are not equivalent, and the differences rarely come up unless you ask.
How long? Ninety days is common. Six months is better and exists. Twelve months is rare outside retained work.
Replacement or refund? Most guarantees promise a replacement search, not your money back. If the person leaves in month four and you no longer need the role filled, a replacement is worth nothing to you.
What voids it? Redundancy, restructuring, a change of manager and performance-based termination are all commonly excluded. Read that clause. It is where a guarantee quietly becomes conditional.
Is it capped? Some guarantees cover one replacement, then expire.
Why the lowest percentage is often the most expensive
Fee percentage is the visible cost of a hire. It is rarely the largest one.
An unfilled senior engineering seat costs the business every week it stays open — in deferred project revenue, in overtime absorbed by the people covering it, and in the delivery risk that builds while a role sits vacant. On most mid-market salaries that weekly figure is larger than people expect; you can put your own numbers through it here.
Which changes the arithmetic. A staffing agency charging 15% that takes four months to deliver is more expensive than one charging 22% that closes in six weeks. And a cheap hire that fails inside a year is the most expensive outcome available — the cost of a bad hire lands somewhere between one and three times salary once you count the lost time, the re-run search, and the damage to a project that changed hands twice. That range is not ours: the U.S. Department of Labor puts the floor at 30% of first-year earnings, and SHRM’s replacement-cost figures run from 100–150% of salary for mid-level technical and managerial roles, higher above that.
The percentage is the only number that appears on an invoice, which is why it gets all the attention. It is not the number that decides what the hire costs you.
What you are actually buying at each price
The question worth asking a headhunter is not what they charge. It is what they will do.
A large share of agency work at the lower end of the range is advertising and applicant handling: the role goes onto LinkedIn and the paid boards, applications arrive, someone screens them and forwards a few resumes. That reaches people who are actively looking — the same people who would have found your own posting. It is work most employers are capable of doing themselves.
The engineers worth hiring at a senior level are usually not applying to anything. They are employed, performing, and not reading job ads. Reaching them means direct approach, a real map of who is doing the work in your market, and a conversation with someone who understands the discipline well enough to be taken seriously. That is a different job, and it is what the upper half of the range should be paying for.
So the useful question is: will you be posting this role, or approaching people directly? The answer tells you which half of the range the quote belongs in.
Where exclusive contingency fits
There is a fourth arrangement that sits between the two main models and gets less airtime than it deserves.
Under exclusive contingency, one firm runs the search on an exclusive basis and is still paid on hire rather than up front. The employer keeps the risk profile of contingency — no fee if nobody is hired — while the recruiter, holding the role exclusively, can justify the direct approach and market mapping that a contingency free-for-all cannot.
The reason it matters is behavioural. When four agencies hold the same role, none of them can afford to invest in it, because any one of them is likely to lose. Everyone races to forward the fastest available applicant. Exclusivity is what makes considered work rational, and it is why a firm working exclusively can commit to a timeline at all.
It is how our engineering recruitment practice is structured, and it is the reason we can quote a fill rate at all. For genuinely confidential or board-level mandates, retained executive search remains the right instrument.
Six questions before you sign
- Is the fee on base salary or total first-year compensation? Get it in writing.
- How long is the guarantee, and is it replacement or refund?
- What voids it? Ask specifically about redundancy and performance termination.
- Will this role be advertised, or approached directly?
- Who actually runs the search? The person selling it is often not the person doing it.
- How many other firms hold this role? If the answer is three, expect three inboxes forwarded at you.
None of those questions are awkward, and any recruitment agency worth engaging will answer all six without hesitating. The ones that hedge are telling you something useful.
The short version
Contingency 15–25%. Retained 20–35%. Contract $50–200 an hour. Those ranges are broadly consistent across Canadian agencies, and within them the percentage tells you almost nothing on its own.
What the fee is calculated on, what the guarantee actually covers, whether the role gets advertised or worked, and how long the seat stays empty — those four decide what the hire costs. The number on the invoice is the one you will remember, and the least useful of the five.
