Why Smart Companies Are Demanding Competitive Bids — and Winning
Hiring the right people is one of the most important investments a company can make. But the process of finding recruiting support? That’s where many businesses quietly bleed thousands — sometimes tens of thousands — of dollars every year. If your organization is still working with the same recruiting firm on a handshake arrangement, or accepting their standard rate card without question, this article is for you.
The average contingency recruiting fee in the U.S. ranges from 15% to 30% of a candidate’s first-year salary. For a $90,000 hire, that’s up to $27,000 — per placement. Are you confident that rates are competitive?
The good news: the recruiting services market has never been more competitive, and employers who take the time to solicit comparison bids consistently get better pricing, better service terms, and better outcomes. Here’s what you need to know about going into 2026.
The Recruiting Fee Landscape Is Changing — Fast
The pandemic-era talent wars drove recruiting fees to all-time highs. Firms could name their price. But the landscape has shifted considerably. A more balanced labor market, the rise of AI-powered sourcing tools, and a surge in boutique and specialized recruiting agencies means that competition for your business is fierce — and we want you to know.
What hasn’t changed is the tendency of many HR leaders to stick with familiar vendors out of convenience or loyalty. That comfort is EXPENSIVE!
Here’s what we see at HRmango when companies finally go out for a competitive bid:
- → Fee reductions of 3–8 percentage points on contingency searches
- → Retained search firms offering hybrid or milestone-based billing instead of full upfront fees
- → Inclusion of replacement guarantees that previously weren’t on the table
- → Faster time-to-fill commitments written into service agreements
- → Reduced conversion hours for temp or seasonal staff
- → Recruiters on monthly demand with no contracts
Four Signs You’re Overpaying Right Now
Not sure if your current arrangement is competitive? Watch for these red flags:
- 1. You haven’t renegotiated your recruiting fees in more than 18 months.
- 2. Your firm’s fee is the same regardless of the role level, seniority, or difficulty of the search.
- 3. You have no written service-level agreement (SLA) defining timelines, candidate quality benchmarks, or replacement policies.
- 4. You’ve never been offered a volume discount, even though you make multiple hires per year.
- 5. You are doing what you have always done….
If two or more of these apply, there’s a meaningful chance you’re leaving money on the table — and not getting the service you deserve.
What a Comparison Bid Actually Looks Like
Requesting a comparison bid doesn’t have to be a formal procurement exercise. In fact, for most mid-sized companies, the process is refreshingly straightforward. Here’s a simple framework:
- Step 1. Define your hiring needs for the next month, or up to 12 months — roles, volume, seniority levels.
- Step 2. Identify 2–5 recruiting firms that serve your industry and geography, including your current provider.
- Step 3. Send a short E-mail or RFP (Request For Proposal) if you prefer, request a review call and fee schedule from each.
- Step 4. Compare not just price, but terms: guarantees, replacement periods, exclusivity requirements, and billing structure.
- Step 5. Use what you learn — even if you stay with your current provider — this allows you to negotiate improved terms for the rest of the year.
“We went through a competitive bid process last year expecting it to be a hassle. We ended up saving over $40,000 in fees across eight hires — and our new firm filled roles two weeks faster on average.” — HR Director, Manufacturing Company
What to Look for Beyond the Price Tag
The lowest fee isn’t always the best deal. When evaluating recruiting partners, consider the total value of the engagement:
- Guarantees Replacement guarantee length: 30–90 days is standard; top firms offer 6–12 months. But if you don’t want the guarantee, you should get a lower price.
- Quality Metrics Candidate quality: Ask for data on offer acceptance rates and 6-month retention figures.
- Industry Fit Specialization: A firm, or recruiter, that focuses on your industry will typically deliver stronger candidates faster.
- Tools & Tech Technology and sourcing: Do they use modern sourcing tools, or are they pulling from the same databases everyone else uses?
- Transparency Communication cadence: Will you get daily and weekly updates, or radio silence between submittals?
How HRmango Can Help
At HRmango, we work with companies of all sizes to evaluate their HR vendor relationships — including recruiting. Whether you need help drafting an RFP, benchmarking current fees against market rates, or simply want a second opinion on your existing contract, our team brings the market intelligence to help you make a confident, informed decision.
If we don’t offer the recruiting solution you are looking for, we may be able to introduce you to a company that does.
We’re not just a recruiting firm. That means our only agenda is helping you get the best outcome — with no conflict of interest.
Ready to see if you’re overpaying? Request a free Recruiting Fee Benchmarking Review from HRmango. We’ll compare your current arrangement against current market rates and give you a clear picture of where you stand — with zero obligation.
The Bottom Line
2026 is a smart time to pressure-test your recruiting relationships. The market has shifted in your favor; alternative options are plentiful, and the savings available through a simple competitive bid process can be substantial. Your current firm may still be the right choice — but you deserve to know that with confidence, not just assumption.
Don’t let habit cost you another year of inflated fees. Ask the questions. Request the bid. Make the decision to know all of your options.
