Ray Gibson
Feb 18, 2026 7:11:21 PM
You just closed a funding round. You need to hire fast. But when you start talking to recruiters, the pricing is confusing — percentages, retainers, success fees, minimum guarantees. How much should you actually expect to pay?
Here's a straightforward breakdown of every recruiting model available to startups in 2026, with real numbers.
The Four Recruiting Models (And What They Actually Cost)
1. Commission-Based (Contingency) Recruiters
How it works: You pay a percentage of the new hire's first-year salary. No hire, no fee.
Typical cost: 20-30% of annual salary
Example: Hiring a Senior Software Engineer at €90,000/year = €18,000-€27,000 in recruiter fees. For a VP of Sales at €150,000/year, you're looking at €30,000-€45,000.
Pros: No upfront cost. Only pay on success.
Cons: The more competitive the salary you offer, the more you pay. This creates a perverse incentive — your recruiter benefits when you overpay. Most startups can't afford €20K+ per hire when they're trying to stretch a funding round.
2. Retained Search Firms
How it works: You pay an upfront retainer (typically 1/3 of the total fee) before the search begins, with the remainder due at milestones or placement.
Typical cost: 25-35% of annual salary, with €30,000-€50,000 minimum engagement fees
Example: A retained search for a CTO at €180,000/year = €45,000-€63,000 total.
Pros: The firm is committed to your search (they've already been paid). Better for senior/executive roles.
Cons: Extremely expensive. You pay regardless of outcome. Designed for corporates, not startups burning runway.
3. Recruitment Process Outsourcing (RPO)
How it works: An external team acts as your in-house recruiting department, usually on a monthly retainer.
Typical cost: €5,000-€15,000/month + per-hire fees of €3,000-€8,000
Example: A 6-month RPO engagement = €30,000-€90,000 base + per-hire fees. If you make 5 hires, total cost could reach €60,000-€130,000.
Pros: Scales with your hiring volume. Good if you're making 10+ hires.
Cons: Expensive monthly commitment. Contracts are typically 6-12 months. Overkill for most startups making 2-5 hires after a funding round.
4. Fixed-Fee Recruiting
How it works: You pay a flat fee per hire, regardless of the candidate's salary.
Typical cost: $4,900-$21,900 per hire (varies by role seniority)
Example: Hiring that same Senior Software Engineer at €90,000/year costs $7,500 (roughly €7,000) instead of €18,000-€27,000 with commission. For a VP of Sales at €150,000/year, you pay $15,900 instead of €30,000-€45,000.
Pros: Predictable costs. No penalty for offering competitive salaries. Usually 60-70% cheaper than commission.
Cons: You pay whether the search takes 2 weeks or 8 weeks (though most fixed-fee firms offer guarantees).
Real Cost Comparison: 5 Common Startup Hires
Here's what you'd actually pay across all four models for a typical post-funding hiring sprint:
Role 1: Account Executive (€70,000 salary)
- Commission (25%): €17,500
- Retained: €20,000+
- RPO: €8,000-€12,000 (per-hire portion)
- Fixed-fee: $4,900 (≈€4,500)
Role 2: Senior Software Engineer (€90,000 salary)
- Commission (25%): €22,500
- Retained: €25,000+
- RPO: €8,000-€12,000
- Fixed-fee: $7,500 (≈€7,000)
Role 3: VP of Sales (€150,000 salary)
- Commission (25%): €37,500
- Retained: €40,000+
- RPO: €10,000-€15,000
- Fixed-fee: $15,900 (≈€14,800)
Role 4: CTO (€180,000 salary)
- Commission (25%): €45,000
- Retained: €50,000+
- RPO: €12,000-€18,000
- Fixed-fee: $21,900 (≈€20,400)
Role 5: Finance Manager (€65,000 salary)
- Commission (25%): €16,250
- Retained: €20,000+
- RPO: €6,000-€10,000
- Fixed-fee: $4,900 (≈€4,500)
Total for all 5 hires:
- Commission: €138,750
- Retained: €155,000+
- RPO: €44,000-€67,000 (plus monthly base)
- Fixed-fee: ≈€51,200
The difference is stark. A startup making 5 hires saves €87,000+ by choosing fixed-fee over commission.
Which Model Is Right for Your Startup?
Choose commission if: You're making a single, opportunistic hire and want zero upfront risk.
Choose retained if: You're hiring a C-level executive and need a dedicated, white-glove search (and have the budget).
Choose RPO if: You're scaling rapidly (10+ hires in 6 months) and need embedded recruiting support.
Choose fixed-fee if: You're a startup making 2-8 hires after a funding round, you want predictable costs, and you need speed. This is what most funded startups between Seed and Series C actually need.
What About Internal Recruiting?
Hiring an in-house recruiter costs €50,000-€80,000/year in salary alone, plus tools (LinkedIn Recruiter: €10,000+/year, ATS: €3,000-€10,000/year), benefits, and management overhead. That makes sense when you're hiring 15+ people per year. For most post-funding hiring sprints of 3-8 people, an external fixed-fee recruiter is significantly cheaper.
Hidden Costs to Watch For
Regardless of which model you choose, watch out for:
- Exclusivity clauses: Some retained firms demand exclusive mandates. If they don't perform, you're stuck.
- Minimum fees: Commission firms often have minimum fees of €10,000-€15,000, even for junior roles.
- Replacement guarantees: Always confirm the guarantee period (3-6 months is standard). Some firms charge for replacements.
- Speed: The hidden cost of slow hiring is real. Every week a critical role sits empty costs your startup in missed revenue, slower product development, and founder time spent interviewing instead of building.
How Funded.club Compares
Full disclosure: we're a fixed-fee startup recruiter. We built Funded.club because we were founders who couldn't afford traditional recruiters after raising funding.
Our pricing:
- Growth tier: $4,900-$11,500 per hire (IC to senior roles)
- Premium tier: $15,900-$21,900 per hire (leadership and C-level)
- First candidates in 7 days, shortlist in 14
- Replacement guarantee on every hire
- 67% of placed candidates still in role after 24 months
We've served 400+ startups across six continents and saved clients like Digital Science €511,000 over three years compared to traditional agencies.
Want to see how much you'd save? Try our free Growth Planner calculator or book a call to discuss your hiring plan.
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