Recruitment without a placement commission

An open role costs money every day it stays open, and it costs money again on the day you fill it. Owners and managing directors of small and medium-sized companies know how this usually goes. Published Swiss commission examples in our cited sample range from 18 to 30 per cent of annual salary, depending on model and salary. This is an observed sample, not a universal market standard.

This article sets out how a conventional placement commission is calculated, what it costs a Swiss SME, and how an hourly model works. No sales pressure. Just the figures, so you can decide for yourself.

What a placement commission actually costs

In our cited sample, published Swiss commission rates range from 18 to 30 per cent of gross annual salary, depending on model and salary. Providers may price differently; the range describes only the examples linked below.

Take an example. You hire a specialist on an annual salary of CHF 100'000:

• At 18 per cent commission: CHF 18'000
• At 25 per cent commission: CHF 25'000
• At 30 per cent commission: CHF 30'000

That is the price of one hire. At a management salary of CHF 150'000, 18 to 30 per cent is CHF 27'000 to 45'000. When the fee falls due and which guarantee applies depend on the provider's contract.

Here is the point that matters. The commission is tied to the salary. A well-paid role can be just as straightforward to fill as a modest one, and the invoice still climbs with every franc of the package. The fee follows the salary. The hours worked play no part in the total.

The incentives inside the commission model

A success-based fee sounds client-friendly at first. No hire, no cost. A look at the incentives shows what deserves your attention.

The model pays for speed. When payment hangs on the signature alone, the model rewards pace, and the time spent testing fit falls outside it. A hire that does not work out is expensive for you. Studies from German-speaking Europe put the total cost of a failed hire at several times the annual salary, depending on the role. The exact figure is hard to pin down. The cost is always high.

The fee grows with the salary. Because the commission hangs on the package, it rises with every franc you add at the negotiating table. That lands straight on your budget.

Parallel processes. Candidates in demand are usually in several recruitment processes at the same time. The first company to say yes gets the person and pays the fee. That puts you under time pressure.

These three points describe the logic of the model. They say nothing about how any individual provider works. What they show is that a commission creates incentives that can work against your own goal, which is a hire that lasts. Costs are easy to follow when the invoice reflects the hours worked.

Recruitment billed by the hour

The other way to price this work is simple. You pay for the hours actually spent. Recruitment billed by the hour means we search, screen, interview and manage the process in your name and on your behalf. Applications come to you, the hiring decision stays yours, and you see exactly what you are paying for.

At clever hr, recruitment costs CHF 175 per hour, with no placement commission. A short comparison for our example role at CHF 100'000 a year shows what that means in practice:

• Conventional placement at 25 per cent: CHF 25'000
• Recruitment by the hour, assuming 40 to 60 hours for a full search: around CHF 7'000 to CHF 10'500

The hours needed depend on the role. A hard-to-find specialist takes more searching than a role with a broad candidate pool. Even on demanding mandates the total usually stays well below a percentage commission. And the key point: you know in advance what to budget.

For an SME with 20 to 100 employees, that predictability is worth real money. You budget a hire like any other project, with a figure that is fixed from the start. Our recruitment services are described in full on the services page, and the recruitment rate of CHF 175 per hour is published on the pricing page.

What RPO is and when it pays off

RPO stands for Recruitment Process Outsourcing. You hand part or all of your recruitment process to an external partner who works as an extension of your own HR function. That covers workforce planning, the job advert, active sourcing, the shortlist, the interviews and the support that runs through to onboarding.

When does RPO pay off for an SME?

• When you have no HR function of your own, or your HR team is already at capacity.
• When you are filling several roles at once or spread across the year.
• When you want recruitment expertise without creating a permanent in-house role for it.

The difference lies in the model. With RPO billed by the hour you pay for the process and the work behind it. You keep control of your brand, your tone of voice and your decisions. The partner brings structure, tools and pace. At clever hr, AI handles part of the screening and the first outreach in the background. That speeds the search up and keeps your bill down. Data protection follows Swiss law, in particular the revised Swiss Federal Act on Data Protection (revFADP), known in Switzerland as the DSG.

For companies hiring into a Swiss entity for the first time, the administrative side comes before the search. Six registrations stand between an employment contract and the first payslip. They start with an AHV compensation office, which covers the state pension (AHV), disability insurance (IV), income compensation (EO) and unemployment insurance (ALV). They end with withholding tax (Quellensteuer), which the employer deducts from the monthly salary of every employee without a permanent residence permit. Our guide to hiring in Switzerland walks through all six.

Active sourcing: approaching suitable people directly

Active sourcing is central to modern recruitment. It means approaching suitable people directly.

The reason is simple. The strongest specialists are usually not looking. They have a job, they are broadly content, and a standard job advert never reaches them. Active sourcing does. Through professional networks and targeted outreach you can start a conversation with people who would have scrolled past your advert.

For an SME this matters a great deal. In many industries candidates are scarce, and an advert on its own shows you a fraction of the people who could do the job. Active sourcing widens the field. It takes time and care, which is exactly why it fits an hourly model so well: the hours behind each direct approach are visible and billed fairly.

The legal framework in Switzerland

A word on the law, because this is where the confusion usually starts. Private employment placement in Switzerland is governed by the Employment Services Act (Arbeitsvermittlungsgesetz or AVG, official text in German). Anyone who brings job seekers and employers together commercially and for a fee needs a licence from the canton. Cross-border placement requires an additional licence from SECO, the State Secretariat for Economic Affairs, which is the federal body responsible for labour market matters.

The part that matters for fees: the Act mainly caps what may be charged to a job seeker. The fee ordinance that goes with the Act, the Gebührenverordnung zum AVG (GebV-AVG, German text), sets clear upper limits there to protect employees. The commission paid by the employer carries no cap of that kind. It is a matter of negotiation. That is why market rates vary so widely, and why the model is worth questioning before you sign anything.

Our own work is on the employer side of that line. We provide recruitment support in your name and on your behalf, as your outsourced HR function. Applications arrive with you, the shortlist is yours to approve, and you sign the employment contract.

This section is a general overview and does not replace legal advice. The authoritative texts are the AVG and its ordinances, published by the federal authorities.

How to decide as an SME

Ask three questions before you appoint anyone:

• Am I paying for hours or for a share of the salary? A commission tied to the package rises with the pay, while the search behind it can be the same either way.
• Do I know the cost in advance? An hourly model can be planned from day one, and a percentage fee is often only clear at the very end.
• Who carries the risk on fit? A good partner thinks past the signature and stays with you through the induction.

Recruitment can stay affordable and easy to follow. With an hourly model you know what you are paying for, and you keep control over your own hires. How AI speeds up the search is covered in our article on AI in HR, and our guide shows when it makes sense to outsource the whole HR function. If you want to know what a concrete mandate would look like for your company, talk to us through the contact page. We work out the likely number of hours with you in advance, openly and with no placement commission.