Agency fee structures in India vary more than most hiring managers expect - by model, by role seniority, and by whether the search is exclusive. Here's how the pricing actually breaks down, and what's typically included for that fee.
Three pricing models cover most of the Indian market. Contingency is the most common: the agency is paid only when its candidate joins. Retained search asks for payment up front, often in installments, win or lose, and is reserved for senior or hard-to-fill roles. Flat-fee and retainer arrangements are less common but show up for high-volume hiring or embedded-recruiter setups.
| Model | Typical range | Where it's used |
|---|---|---|
| Contingency - entry/bulk | ~8.33% of CTC (1 month) | Volume hiring, junior roles |
| Contingency - mid/specialized | ~12.5% of CTC (1.5 months) | Mid-level and niche-skill roles |
| Contingency - senior | ~16.67% of CTC (2 months) | Senior individual contributor / leadership |
| Retained search | 20–25% of CTC | C-suite, exclusive, hard-to-fill mandates |
| Flat fee | ₹15,000–50,000 (entry) to ₹1–3 lakh (senior) | Simpler, one-off placements |
| Monthly retainer | ₹50,000–2 lakh/month + success fee | Embedded or ongoing recruiter arrangements |
A standard contingency or retained fee typically covers sourcing, screening against the job description, interview coordination, and offer-stage negotiation support. Background verification is almost always a separate, optional line item billed on request, since not every role needs it and its cost varies by depth of check. A replacement guarantee is usually bundled in rather than charged separately, though its length and exclusions vary by agency.
A guarantee period (commonly 30 to 90 days from the candidate's joining date) protects the fee if that specific hire doesn't work out for reasons on the candidate's side - resignation, gross misconduct, or termination for non-performance. It typically excludes departures caused by the employer: layoffs, restructuring, delayed onboarding, or misrepresented role details. The replacement search itself is usually bounded by its own window (commonly 30 to 60 days); if no replacement joins within it, agencies generally issue a credit note valid against a future placement rather than a cash refund.
VelivoHR charges a percentage of the candidate's Gross Annual CTC, exclusive of GST, tiered by role seniority rather than a single flat number - entry and mid-level mandates sit at a lower rate than senior ones. The specific rate for a given search is set out in the Recruitment Services Agreement before work begins. The fee covers sourcing and screening through Velivo7, coordination, and offer-stage negotiation support, backed by a 90-day guarantee with one free replacement inside a 60-day search window. Background verification remains a separate, optional add-on at a cost agreed in advance.
Ask for the fee model (contingency, retained, flat, or retainer) before the percentage, since that changes what you're comparing. Ask whether the quoted rate is tiered by seniority or flat across all roles. Ask what the replacement guarantee excludes, not just its length. And ask what's bundled into the fee versus billed separately - background checks in particular are frequently not included by default.
Most contingency-model agencies charge a percentage of the candidate's annual CTC: roughly 8.33% (one month's CTC) for entry-level and bulk hiring, 12.5% (1.5 months) for mid-level and specialized roles, 16.67% (two months) for senior roles, and 20-25% for C-suite or retained executive search. Some agencies instead use a flat fee (roughly ₹15,000 to ₹50,000 for entry-level roles, ₹1-3 lakh for senior ones) or a monthly retainer (₹50,000 to ₹2 lakh) plus a success fee. A newer AI-driven pricing model has emerged at a flat fee closer to 7% of CTC. The exact figure for any specific agency depends on its fee structure, the role level, and the mandate terms, so it's worth asking directly rather than assuming a market-wide number applies.
The hiring employer pays. The candidate is never charged a recruitment-agency fee for being placed; the fee is billed to the company that engaged the agency and is typically due on the candidate's date of joining.
A replacement guarantee is a window after a candidate joins during which the agency will search for a free replacement if that candidate resigns, is terminated for cause or non-performance, or is found guilty of gross misconduct. Traditional agencies in India typically offer 30 to 90 days; AI-driven recruitment platforms often offer a shorter 30 to 60 day window. Guarantees usually exclude departures caused by layoffs, restructuring, or the employer's own conduct, and a replacement search itself is typically bounded by a further fixed window (commonly 30 to 60 days) after which the agency issues a credit note rather than continuing the search indefinitely.
Contingency recruitment means the agency is paid only if and when a candidate it sources actually joins, usually run alongside other agencies competing for the same mandate. Retained recruitment means the client pays the agency (often in installments tied to search milestones) to run an exclusive, usually more senior search, whether or not that specific search concludes in a hire. Retained fees sit at the higher end of the percentage range, commonly 20-25% of CTC for C-suite and specialist searches.
VelivoHR's placement fee is calculated as a percentage of the candidate's Gross Annual CTC, exclusive of GST, and is tiered by seniority rather than charged as one flat number - entry and mid-level roles sit at a lower rate than senior roles. The exact rate for a given mandate is set out in the Recruitment Services Agreement before work begins. The fee covers sourcing and AI-assisted screening through Velivo7, candidate coordination, offer negotiation support, and a 90-day guarantee with one free replacement within a 60-day search window. Background verification is a separate, optional add-on billed at a cost agreed in advance.
