Be careful. Some recruiters deliberately blur the picture, so you do not see what actually drives the fee behind the scenes.
Your third-party recruitment agency and executive search firm calculate their service fee as a percentage of the successful candidate’s first year’s annual income.
The percentage will typically range from 15% to 35%.
What annual income actually means
Annual income is not limited to base salary. The standard definition starts with gross monthly salary before tax multiplied by twelve. But it rarely stops there.
The candidate’s annual income often also includes:
- Fixed monthly allowances, such as transport, mobile phone, or housing
- Fixed or guaranteed bonuses
- Variable incentives attributable to the first year
- Sign-on bonuses
- The monetary value of a company car
A fixed allowance is a recurring monthly payment shown on the pay slip and treated as taxable personal income.
In Thailand, we come across fixed allowances for a company car, which is sometimes called transport. This could be 20,000 baht per month for a new car below one million in purchase price. A mobile phone allowance is typically 1,000 or 2,000 baht per month.
Housing allowance could be a fixed monthly amount or a percentage of the monthly salary.
- If the candidate receives a sign-on bonus, this amount is also included in the fee calculation.
- In the event that the candidate is provided with a company car, the monetary value of the car is added. Example: a Toyota Camry is calculated as 30,000 baht x 12 months.
Finally, as part of the annual income definition, incentives, bonuses or commissions attributable to that period are calculated as an amount based on the candidate achieving 100% of key performance indicators, objectives, targets or similar.
The fee equals 3 months or 4 months’ salary
A fee of 33% of the annual income equals four months’ compensation, whereas a fee of 25% is equal to three months.
But as they say, the devil is in the details. Attention must be paid to all the facts that may not be clear at first.
Don’t jump to conclusions; don’t judge the quotation from the recruiter without enough information, because you may reach the wrong conclusion.
Time-to-fill reality! Contingent recruitment often optimizes speed. Retained search optimizes accuracy. These objectives rarely align.
In other words, the difference in fee when comparing three and four months may not be the full one-month salary, it looks like.
A contingent recruitment fee usually reflects:
- No exclusivity
- No guaranteed delivery effort
- Limited candidate research depth
- High dependence on active job seekers
- Minimal replacement protection (if any at all)
A retained executive search fee reflects:
- Exclusivity
- Dedicated research and mapping
- Access to passive candidates
- Structured assessment and referencing
- Replacement warranties measured in months, not weeks
Senior passive candidates respond differently to retained search approaches than to contingent recruiter outreach. Engagement quality affects acceptance and retention.
Why headline fee comparisons fail
These two models operate under entirely different economics, incentives, and risk allocation.
Both sides of the comparison have their own merits, unique business models, and value propositions.
And so do the business models and value propositions between recruitment agencies that sell contingent on hiring and executive search firms that offer unbeatable complementary benefits and years of warranty.
Comparing a 25 percent contingent fee to a 33 percent retained search fee as if they were equivalent services leads to flawed conclusions.
What you should evaluate before judging a recruitment fee
What you should consider instead of headline percentages, and what you should ask before judging a recruitment fee:
- Who carries the hiring risk if the placement fails
- How candidates are identified and approached
- Whether the recruiter works exclusively for you and for how long
- What replacement coverage exists and for how long
- How candidate motivation and confidentiality are managed
Without these answers, a lower fee does not represent savings. It represents uncertainty.
Price comparisons without context distort decision-making. Recruitment fees only make sense when viewed alongside effort, accountability, and risk ownership.
The percentage is visible. But the real cost sits in what happens after the hire.
If you are planning a senior hire in Thailand or across Asia and want to understand what you are actually paying for, reach out.
I am happy to walk you through the economics, risks, and outcomes before any decision is made.
