Choose your model · Lesson 2 of 18 · 7 min

Running a permanent placement desk

No payroll, no float, low capital — and a business that starts every month at zero. Here is how a perm desk actually runs, and the two things that decide whether it produces a living.

A permanent desk is a simple business with an unforgiving structure. You introduce a candidate, the client employs them, you invoice a fee on their start date. Nothing recurs. Whatever you billed last month tells you nothing about this month.

That structure has two consequences that shape everything else: you need enough live searches running that the ones which fail do not sink the month, and you need the terms of engagement settled before you start work rather than after.

Four ways to be engaged

These are not tiers of prestige — they are different distributions of risk between you and the client. Knowing which one you are in changes how much time the role deserves.

  1. 1

    Contingent

    You are paid only if your candidate is hired. No money changes hands until someone starts, the client is usually working with several agencies at once, and you are competing on speed and quality of shortlist. This is where nearly every new agency begins, because it asks nothing of the client.

  2. 2

    Engaged or container

    A portion of the fee is paid up front, the rest on placement. It is a middle ground that filters out clients who are not serious, and it is a realistic ask once you have delivered for someone before. The upfront portion is not really about the money — it is about the client committing to a process.

  3. 3

    Retained

    The client pays in instalments across the search regardless of outcome, and you work the role exclusively. Normal for senior and hard-to-fill roles, and it requires a reputation you will not have on day one. Worth knowing about as a destination rather than a starting point.

  4. 4

    Exclusive contingent

    Still paid on placement, but you are the only agency working the role for an agreed period. It costs the client nothing and gives you a much better economic position, which makes it the most underused ask in perm recruitment. Many clients will agree if you ask and explain why it produces a better shortlist.

Coverage is the number that matters

Contingent placement is a probability business. Some proportion of your live searches will produce nothing at all — the client hired internally, the role was cancelled, a competitor was faster, the budget moved. None of those are failures of effort.

The mistake this produces is predictable: a new recruiter works three roles with total dedication, two evaporate for reasons outside their control, and they conclude they need to work harder. What they needed was more live searches.

So track two things from the first month. How many searches you are actively working, and what proportion of them end in a placement. Those two numbers, multiplied by your average fee, are your income — and only one of them responds to working longer hours.

Check yourself

You are working three contingent searches with total dedication and filling roughly one in three. A fourth comes in. What is the usual mistake?

A client asks you to work a role contingently alongside three other agencies. What is the most useful thing you can ask for that costs them nothing?

Settle the commercial terms before you work a role

The fee basis, what counts as compensation, the guarantee, when you invoice, how long you own an introduced candidate, and what happens if a contract placement converts. Every one of those is ordinary to raise at the start and a fight to raise at invoice time.

They get their own lesson in the next module, together with the pricing models and the paperwork chain: perm fees, agreements and getting paid.

Where perm placements actually fall apart

Rarely in sourcing. Almost always at the end, in the two weeks between a verbal yes and a first day. Three things account for most of it:

  • The counter-offer. A candidate who has not thought through what they will say when their employer improves the deal is a candidate who will accept it. The conversation to have is before the offer, not after the resignation.
  • An offer that was never really aligned. If you did not know the candidate’s actual number and the client’s actual ceiling before the offer was made, you were guessing. Both parties will tell you if you ask early; neither volunteers it late.
  • The notice period. Weeks between resignation and start date are weeks in which somebody can change their mind. Stay in contact through it. This is unglamorous and it is the difference between a fee and a near miss.

The screening and offer mechanics get a lesson of their own later: screening, submitting and closing the offer.

What the perm model does to your cash

No payroll to finance is a genuine advantage, and it is not the same as having no cash gap. You work a search for weeks, place someone, invoice on their start date — which may be a month or two after they accept — and then wait out your payment terms.

The gap between doing the work and holding the money is routinely several months on a perm desk. It is why understanding what you actually keep matters even in a model with no burden and no float.

Key takeaways

  • A perm fee is earned once. Every month starts at zero, so coverage is the number to manage.
  • Track live searches and fill rate from month one — income is those two multiplied by average fee.
  • Know which engagement you are in: contingent, engaged, exclusive contingent or retained.
  • Asking for exclusivity costs the client nothing and is granted more often than it is asked for.
  • Settle fee basis, guarantee, invoicing point and candidate ownership before you work the role — module two covers how.
  • Placements die at offer stage. Counter-offers and notice periods, not sourcing, are where fees are lost.

Common questions

How does a permanent placement agency make money?+

By charging a fee when a candidate you introduced starts a permanent job with your client, normally calculated as a percentage of the candidate’s first-year compensation and invoiced on their start date. There is no payroll to fund and no ongoing revenue from that placement — the fee is earned once, is close to gross profit, and the month resets to zero afterwards. What varies enormously is the percentage, which depends on seniority, vertical and how contested the role is.

What is the difference between contingent and retained recruitment?+

Contingent means you are paid only if your candidate is hired, usually while competing with other agencies. Retained means the client pays in instalments across the search regardless of outcome, and you work the role exclusively. Retained is normal for senior or genuinely scarce roles and requires a track record; contingent is where almost every new agency starts because it asks nothing of the client. Between them sit engaged searches, where part of the fee is paid up front.

What is a guarantee period in recruitment?+

A period after the candidate starts during which you will replace them at no cost, or refund part or all of the fee, if the placement does not work out. The two things worth settling in the contract are whether it is a replacement or a refund, and what happens if the client ends the employment for their own reasons — a redundancy is not a failed placement, and your terms should say so.

How many roles should a perm recruiter work at once?+

More than most new recruiters think, because contingent placement is a probability business and some proportion of live searches will produce nothing through no fault of yours. The useful framing is not a fixed number but coverage: track how many of your searches actually convert, and carry enough live roles that your expected placements match the income you need. Working very few roles with total dedication feels productive and is the most common way a new perm desk starves.

Is permanent recruitment easier to start than contract staffing?+

To start, yes — considerably. There is no payroll to finance, no employer-of-record obligation and a much lower capital requirement, which is why many agencies begin here. It is harder to build, though: income is lumpy, every month starts at zero, and there is no accumulating revenue base. A common route is starting perm to generate cash and adding contract once the business can fund the payroll gap.

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Next: Running a contract staffing desk

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