You know the dance when it comes to negotiating contingency recruiting fees:
Recruiter: "We're a retained search firm, and our normal fee is 25 to 30%."
Company: "We can't pay a dime over 15%. And I need you to take it on contingency".
Recruiter: "Wow. I can't do 15%. Let me check on what I can do and get back to you."
<a day of silence>
Recruiter: "I pushed for an exception. Can you do 20% contingency?"
Company: "Done. 20% it is."
I've been on the record for more than 8 years saying that this consistent dance of negotiation in the recruiting world proves the right fee is 20%. I've observed that as a VP of HR, and now as a leader at a recruiting firm (Kinetix). If you get more as a recruiter, congrats. If you paid more as a company, I hope you got great value.
The 20% sweet spot was recently confirmed by Bounty Jobs, who conducts an analysis of all the searches that go through their ecosystem (more than $60 million in headhunter fees). More from Bounty Jobs:
Record agency results were driven by strong fees, and even stronger salaries, in 2014. The average dollar agency fee collected in 2014 was $22,113, 6.3% higher than the average fee in 2013 ($20,793) and 29% higher than average fees during the depth of the recession in 2008. Agency fees as a percentage, however, stayed relatively flat at 21.2% of first year salary, as compared to 21.0% in 2013. After a brief stumble in 2008 (when fees declined from 20.2% in 2007 to 19.7%), fees as a percentage have steadily risen every year. Fees as a dollar amount, however, surged in 2013 and 2014, reflecting the strength in salaries offered.
21%. Of course, you don't negotiate in single percentages, so my conversation outline above holds true. You do 20% and occasionally give in and do something larger for that "special position".
Good luck with the negotiation!