A new cut price IT recruitment firm has launched a recruitment fee war, promising to chop around $7,000 off the fee for companies recruiting a permanent IT worker.

The existing business model for IT recruitment firms is based on charging a percentage commission – which is between 10% and 20% of a new hire’s annual salary. 

“It's outrageous that the IT industry has been putting up with percentage commissions that drive up costs” says Andrew Stuart MD of Flat Rate Recruitment.  “It really has to stop. It is hard to find another professional service with the same inefficient modes of operation.  In no other profession do clients brief many suppliers and watch them race to the finish line, and then reward the winner with huge sums of money.  Usually professional service firms are engaged on an exclusive basis.  Percentage commissions for recruitment simply can't be justified anymore. The best fee model is Flat Rate fee-for-service.  The right price for IT recruitment is $4,950.

“Savings are substantial. With the average IT salary pegging $75,000+ super, a 15% commission translates to more than $12,000. Flat Rate would save the client $7,000.”

We are not entirely sure how Flat Rate Recruitment arrived at the fee of $4,950 or whether that rate still holds for entry level jobs. However, $4,950 still seems like a lot of money compared to a $50 ad on Seek.